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Home My WebLink About12/5/2023 Item 7a, Brennan Jocelyn Brennan < To:CityClerk Cc:Read, Chris Subject:Item 7a Attachments:Item 7a SLO Coastal Association of Realtors®.pdf; SCC Home Electrification Potential Costs.pdf Importance:High This message is from an External Source. Use caution when deciding to open attachments, click links, or respond. Council Members, Please see the attached letter regarding item 7a on your agenda and the attached home electrification cost study. Please let me know if you have any questions. Thank you. Sincerely, Jocelyn Brennan cell/text (805) 748-7630 Jocelyn@thehrmcorp.com 1 City of San Luis Obispo Re: Item 7a December 5,2023 Dear Mayor Stewart and Council Members, I am writing on behalf of the San Luis Obispo Coastal Association of Realtors®, representing more than 1200 real estate professionals, to express our strong opposition to any proposed Point of Sale Retrofit Program as outlined in the staff report for Agenda Item 7a. We advocate for the production of new housing stock and the preservation of property rights, in order to help more Californians achieve the American dream of homeownership. Residential buildings account for only 12 percent of statewide greenhouse gas emissions. The transportation sector and industrial and commercial buildings account for 40 percent, 21 percent, and 12 percent, respectively. There is widespread agreement that the most promising opportunities in the next decade for greenhouse gas (GHG) reductions are in all-electric new construction of residential housing and low-rise commercial buildings. The California Energy Commission will assess the potential to reduce GHG emissions in residential and commercial buildings by 40 percent below 1990 levels by 2030. California’s staggering housing costs have become the most significant driver of inequality in the state. Government must take steps to reduce the cost of housing, not increase it further for those who can least afford it. Point of sale mandates are costly to homeowners and can cause delays in closings for real estate transactions. Moreover, residential electricity is far costlier than natural gas. When measured on an energy - equivalent basis, residential electricity in California costs four times as much as natural gas. Each year many San Luis Obispo homeowners are retrofitting their homes to all electric appliances and systems without any government-imposed requirement. They receive utility rebates that range from several hundred to several thousand dollars. The Realtors® have a Green Committee and receive training from energy efficiency organizations and share what they’ve learned with fellow Realtors® to assist in the dialogues with their clients expressing interest in energy efficient retrofits. It is important to note that the cost to retrofit a home to all electric appliances and systems is highly regressive. For well-to-do homeowners, the cost is 3-4% of the home’s total value. But for the thousands of people who own a median-priced home, the cost is two to three times greater (11-14% of the home’s total value). While we fully support the City’s efforts towards sustainability and energy efficiency, we believe a Point of Sale Retrofit requirement would place an undue burden on property owners and could have unintended negative consequences on the real estate market in San Luis Obispo and the Central Coast housing crisis. The San Luis Obispo Coastal Association of Realtors® commitment extends beyond mere transactions; we are deeply invested in fostering sustainable development and prosperity across our communities. A Point of Sale Retrofit requirement would impose significant financial burdens on homeowners, especially those who may already be facing financial constraints, seniors on fixed incomes, and those who are moving for time sensitive work, health or family reasons. Implementing such a requirement would add complexity and potential delays to the real estate transaction process. This could lead to longer closing times, increased costs, and greater uncertainty for both buyers and sellers. The one-size-fits-all approach of the Point of Sale Retrofit Program does not consider the diverse nature of buildings and their occupants in the city. Such a policy could disproportionately affect older properties and those in lower-income areas, exacerbating equity issues. We believe that there are more effective ways to achieve the City’s sustainability goals without adversely impacting the real estate market. Including voluntary incentives for energy-efficient upgrades, broader community education programs, and partnerships with local businesses and stakeholders. Appliances, vehicles and homes are becoming more sustainable all the time. We commend the City’s commitment to reducing emissions and improving energy efficiency, we urge the Council to alternatives to any Point of Sale Retrofit requirement. We are open to collaborating with the City to explore alternative solutions that balance environmental goals with the economic realities of homeowners. Please see the attached 2022 electrification cost study done by the Santa Clara Association of Realtors ®. Thank you for considering our position on this critical issue. Sincerely, Jocelyn Brennan Government Affairs Director San Luis Obispo Coastal Association of Realtors® STRUCTURAL COSTS Low End*High End* APPLIANCES Air/Heating System $4,500 $40,000 Range Cooktop $800 $6,500 Water Heater $1,000 $7,500 Clothes Dryer $1,000 $3,000 SERVICES Rewiring & New 220 Amp Outlets $3,650 $22,000 Construction Access to Electrical $2,000 $9,000 Abatement of Asbestos & Lead $4,000 $36,000 Replacement Housing During Asbestos Removal & Construction Upgrades $5,000 $10,000 Electric Panel Upgrade from 50/100 to 200 amp $3,000 $15,000 Undergrounding of Lines $3,500 $15,000 Replacment of 2 inch pipe with 3 inch pipe to accommodate 200 amp service $5,000 $30,000 PG&E Capping-Off Gas Lines $9,500 $25,000 Permitting $1,000 $5,000 SUBTOTAL APPLIANCES & SERVICES $43,950 $224,000 ADDITIONAL FACTORS Solar Panels + Structural Upgrades $25,000 $50,000 New Roof $20,000 $75,000 Backup Battery $7,500 $30,000 Swimming Pool/Spa Conversion**$10,000 $35,000 Trigger for Fire Sprinklers $10,000 $35,000 Trigger for Sewer Lateral $9,000 $30,000 *Cost of Labor is the Most Significant Unknown Factor ** Conversion to Electric is Discouraged by Pool Companies due to Inefficiency TOTAL STRUCTURAL COST $125,450 $479,000 Potential Cost Range of All-Electric Conversion Building Electrification Cost Study Published: June 27, 2022 Sources: Based upon a study conducted by the Santa Clara County Association of REALTORS® (SCCAOR) with estimates from 7 Electrical Contractors in Santa Clara County. The appliances, services, and additional factors are a "menu" of options and range of costs. Some newer homes will require fewer of the options and older homes will require most of the listed services and additional factors. 1651 North First Street, San Jose, CA 95112 • (408) 445-8500 • sccaor.com