Electrification of Housing

At C.A.R. last month, many potential and existing issues were discussed and what it means to the REALTOR® community. REALTORS® are preparing for possible policy regarding requiring electrification of housing. Since 2006, California has adopted aggressive and far-reaching goals regarding greenhouse gas emissions and how to drastically reduce them. The goal for entire electrification of housing seems to be 2045. At the January C.A.R. Board of Directors Meetings, Directors voted to oppose any legislation requiring electrification of existing housing.

Buildings account for 25% of statewide end-use greenhouse gas (GHG) emissions, however, residential housing only contributes to 6% of greenhouse gas emissions in Sacramento. It has also been proven that if there were to be a change in policy implemented for residential housing, the result would only be a 2% decrease in GHG emissions. This statistic indicates that policy should be targeting other areas of pollution prior to residential housing as we will witness little change in greenhouse gas emissions by focusing on a far less impactful area.

Likely policy to emerge from GHG reduction goals could be mandated point of sale retrofits, requiring homeowners to make energy efficient upgrades before they can sell their home. This is highly ineffective and inefficient as only an estimated 22% of homes change hands over a 25-year period. This also adds significant financial stress to the seller and delays the sale of the home, hurting everyone involved.

The state has already committed to doubling energy efficiency and recognizes the implementation challenges. Switching to all electric appliances has been estimated to cost homeowners an average of $7,200, making it prohibitively expensive if home owners are forced to purchase them. In addition to the $7,200, there are additional infrastructure costs to upgrade the local and statewide electricity grid to accommodate the additional load on the system, while converting to all-electric would increase household electric bills an average of $388 per year.

There are no solidified policy proposals on the possible required electrification of housing at this time, stay tuned to this column as we keep you up to date on this important developing policy.

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