Bay Area Air District Proposes One-Year Delay to Water Heater Rule

Rental housing providers may have additional time to prepare for the transition to cleaner water heating technology.

The Bay Area Air Quality Management District (BAAQMD) is proposing a one-year delay to its upcoming water heater ban.  This would provide homeowners and rental housing providers with additional time to plan for future equipment replacements.

If approved by the Air District Board later this year, the proposal would postpone the residential implementation date from January 1, 2027, to January 1, 2028. The proposal would also delay compliance for larger commercial and multifamily water heaters from 2031 to 2033.

The proposed rule applies throughout the Bay Area, including Alameda and Contra Costa counties, making it particularly relevant for EBRHA members.

Why the Delay?

Since the rule was adopted, housing providers, contractors, local governments, and other stakeholders have raised concerns about the practical challenges of replacing traditional natural gas water heaters with heat pump models.

Among the issues identified are:

• Higher upfront equipment and installation costs.
• Limited contractor availability as demand increases.
• Electrical panel upgrades that may be required at many existing properties.
• Space and ventilation limitations, particularly in older buildings.
• Challenges replacing failed water heaters during emergency situations.

In response, Air District staff are recommending additional time to allow the market, contractors, and property owners to better prepare for the transition while expanding flexibility for situations where immediate compliance may not be practical.

Expanded Exemptions Proposed

Along with the delayed implementation date, BAAQMD is proposing broader exemptions for certain properties and circumstances.

These include situations involving:

• Emergency water heater replacements.
• Buildings that require significant electrical upgrades.
• Properties with physical space constraints that prevent heat pump installation.
• Certain low-income property owners.

The goal is to reduce unintended hardships while continuing to move toward cleaner building technologies.

What This Means for Rental Housing Providers

While the proposal provides welcome breathing room, it does not eliminate the eventual transition away from traditional gas-fired water heaters.

Rental housing providers should continue planning ahead by:

• Evaluating the age and remaining lifespan of existing water heaters.
• Identifying properties that may require electrical upgrades.
• Budgeting for future capital improvements.
• Consulting qualified contractors before emergency replacements become necessary.
• Monitoring regulatory updates as the proposal moves through the approval process.

Planning ahead can help avoid unexpected costs and minimize disruption when replacement becomes necessary.

The Rule Has Not Yet Changed

It is important to note that the delay has not yet been approved. The proposal is currently a staff recommendation and must still be considered by the Bay Area Air Quality Management District Board. A vote is expected later this year.

EBRHA will continue monitoring the proposal and provide updates as additional information becomes available.

As always, our goal is to ensure rental housing providers have the information they need to remain compliant while protecting their investments and providing quality housing throughout the East Bay.