HomeMy WebLinkAboutcc - Hatcher (Reach Code) 8-12-2019M
_�
ilde.s Association
Os iriE4Er�'sitALCdRST
August 9, 2019
Chris Reed
Sustainability Manager
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Dear Chris,
AUG 2 c0'9
_,_RK
The Home Builders Association of the Central Coast (HBACC) supports all sustainable energy measures used for
housing but opposes single -source energy mandates. While we appreciate the city's efforts on the new energy reach
codes and working with Monterey Bay who guarantees all power from renewable sources, we ask that you slow the
process and consider that an "all electric" program will add to the direct cost of housing. Increasing the cost of
housing is counterproductive to the city's efforts to provide more housing that is affordable. The HBACC would like
to meet with the city regarding the following industry concerns and help alleviate some unintended consequences:
1) Additional Expense. We are just coming off $10,000 per home solar mandates in 2019 and roughly $18,000
over the past 10 years. New mandates would add undefined additional costs to new home construction and
renovation while much focus is on making housing more affordable. Adding a mandate for electric water
heating, clothes drying, and cooking would require additional expense during peak usage. It could cost as
much as 2.5 times nonpeak load periods, while the price of gas remains consistent throughout the day.
2) Simplify the code. Currently the city requires gas tankless water heaters with a flow rate of 8 GPM.
Commercially available electric tankless water heaters have a flow rate of 5.5 GPM (under California
Building Code, using the kitchen sink, shower, and washing machine at the same time uses 5.6 GPM). We
will be unable to meet city requirements and provide a usable home without being forced to dual plumb the
homes, potentially adding over $10,000 to the cost of a home.
3) We favor incentives or "carrots" over sticks. Promoting incentives for voluntary increased electrification in
new homes and apartments while studying outcomes of building electrification allows gradual
transformation and affords the market time to evolve. Currently, according to CBIA, the current market
penetration of electrical heat pump water heater technology is less than I%. That means it will be
expensive for the industry to adapt and is still in the early production stages. We recognize that financial
and regulatory incentives are a proven way to promote market transformation. We suggest the city consider
offering a combination of the following to help offset expenses: fee credits, up -zoning and diversity
bonuses, parking restrictions, and a decrease in strict building percentages of KS/Hour, or offset property
taxes.
4) Prohibitive to new homeowners. Houses are financed. The cost to borrow $6,000 extra for building
electrification tankless water heater is amortized and ends up costing an additional $30/month to their
housing finance expense.
Expenses and risks need to be quantified and taken into consideration prior to moving forward with mandates for
building electrification. While the intent is honorable, the potential outcomes and unintended consequences will be
expensive to renters, homeowners, builders, and developers.
Thank you for hearing, and more importantly, considering our concerns. We look forward to meeting with you and
Michael Codron to discuss resolution on the above issues.
RIM AD
Home Builders Association
Of Tf* e t P++ RA L eco.: i
Respectfully,
�+.r�xj X ewc
Lindy Hatcher
Executive Director
cc: San Luis Obispo Mayor Heidi Harmon
San Luis Obispo City Council Members