After January 1, 2027, gas-fired water heaters will no longer be available for sale or installation in the nine-county San Francisco Bay Area. After January 1, 2029, the same will apply to gas furnaces. After those dates, only zero-NOx emissions electric water heaters and furnaces will be available for sale. However, the rule does not compel replacement of existing gas water heaters and furnaces, as long as they continue working safely. Nor does it prohibit repairing them, but future availability of replacement parts could be an issue.
Many manufacturers are now offering “low-amperage” heat-pump systems that run on existing 120V/200A service. There are also new low-voltage “all-in-one” heat-pump space heating/cooling products that obviate the need for rooftop condensers and long refrigerant runs. But as with almost any solution, these products come with trade-offs, and with few installed to date, there is little real-world information available. For purposes of this article, we will focus on the more conventional low-amperage systems in wide use.
Gas dryers and stoves are exempt — for now. The shift away from gas focuses on the “biggest gas users” (furnaces and water heaters) for maximum impact, while leaving gas stoves and dryers up to individual choice. Future regulations could expand to include them, but politically their phasing out is far more contentious, especially given that opposition even to the 2027/2029 mandate is mounting as the phase-out dates approach.
San Francisco Requirements
New construction must be all-electric. The same is true for a major renovation or building systems overhaul. But as mentioned above, pre-1979 buildings can continue
using their existing safely-functioning gas furnaces and water heaters. Why 1979? That was the year California adopted Title 24, its first state energy efficiency code that began the move to an electric future in earnest.
Why Retrofitting Older SF Buildings Can be Very Challenging
Electrification advocates tout the benefits and affordability (with incentives) of retrofitting with low-amperage heat pump systems, but in reality there are significant issues in electrifying older San Francisco buildings, challenges that can make the process a nightmare.
Even with a low-amp heat pump system and incentives, converting older San Francisco multi-unit buildings can be especially costly.
Electrical and Infrastructure Challenges
Limited service capacity: 50A/unit (typical of 200A total) leaves almost no headroom for new 240V loads without load-management or major panel upgrades.
- Underground service laterals: if upgrading from 200 to 400A is needed, it often requires costly PG&E coordination and civil/trenching work — even when wiring is already undergrounded
- Knob-and-tube wiring: still common in Victorians and Edwardians; brittle insulation and shared neutrals may not handle added branch circuits. New dedicated runs for heat pumps/water heaters are often needed
- Outdated grounding: must be modernized for new 240V appliances and GFCI requirements
Building Envelope and Layout Challenges
- Minimal insulation and air sealing increases heating load, forcing larger-tonnage or less-efficient operation
- Lack of wall cavities and chases make it more difficult to fish new electrical runs or refrigerant lines from basement to roof
- Shared walls and stacked flats constrain placement of indoor air handlers and condensate drains
- Limited attic or crawlspace access makes routing ducts, wiring, or condensate lines labor-intensive
Mechanical and Structural Challenges
- Existing gravity-to-forced-air ducting: oversized or poorly sealed ducts cause airflow and efficiency losses when reused for heat pumps
- Long refrigerant-line runs up to the roof add cost, complexity, and refrigerant charge considerations
- Roof loading limits: 1910-era framing may need reinforcement or an engineer’s letter before placing heavy multiple condensers on the roof
- Noise and vibration concerns: light wood structures transmit rooftop compressor noise to top-floor units
Multi-Unit Configuration Challenges
- Tight utility spaces: four separate furnaces and water heaters in one basement, customary in most fourplexes, compete for clearance and venting pathways
- Metering and load segregation: each unit’s new circuits must stay on its own meter; panel labeling and conduit routing can be confusing in old multi-service basements
Regulatory Challenges and Cost Hurdles
- Permit layering: Each unit triggers separate mechanical, plumbing, and electrical permits (and sometimes seismic review)
- Historic-resource oversight: Exterior condenser racks, roof penetrations, or line hides may require design review in historic conservation districts
- Asbestos or lead paint exposure: Cutting new chases or duct openings can trigger costly abatement protocols
- Cost escalation: Cumulative small-scope trades (electrical, plumbing, HVAC, and roofing) raise total labor charges far above single-family averages
The Rooftop Multi-Unit Condenser Module
Unlike a gas furnace, a heat pump system is actually two separate units, the “air handler,” similar in size to a gas furnace, and the condenser, essentially a rooftop air conditioner. One is required for each heat pump, along with refrigeration and electrical connections. Aside from their bulk and ongoing maintenance requirements, should you ever need to replace your roof, the entire module must be removed — a costly and disruptive procedure.
“Minimum-to-Comply” Conversion Cost for Older San Francisco Buildings
“Minimum to comply” means replacing gas furnaces and water heaters with heat-pump HVAC and water heaters, but keeping gas ranges and dryers. The dollar figures cited below do not include state, regional, or local incentives.
Original building specifications:
- 2- and 4-unit building, 1912 construction
- Each unit is about 1,000 square feet
- Water heaters and furnaces located in the basement
- 50 Amps per unit service
- Mostly old knob-and-tube wiring
- Limited wall insulation
- External wiring above-ground poles
Upgrade assumptions:
40-gal, low-amp heat pump water heaters (120V/plug-in class)
- Ducted heat pumps with basement air handlers and rooftop condensers tied into existing ducts
- Condensers roof mounting & penetrations (stand/seismic hardware, flashing/waterproofing). No additional seismic bracing is required
- Refrigerant and condensate runs from basement to roof (lineset, insulation, supports, condensate pump, and drain tie-in)
- Permits/inspections: mechanical/electric permits, simple drawings, Title-24 paperwork, etc.
- Electrical, low-amp strategy (to avoid panel/service upgrades at 50A/unit): two to four new dedicated circuits from each unit’s subpanel to basement heat-pump water heaters and furnaces, and from there to rooftop condensers
- PG&E service change not included (we’re sticking with load management, i.e., balancing supply and demand)
- Possible knob-and-tube replacement: full building rewiring can be very costly, but minimum compliance can often be met by fishing only the new dedicated circuits
- However, an insurer or scope could force a full rewire
2-unit estimated total: $67,600
4-unit estimated total: $135,200
The Question of System Load and Upgrading of the Main Panel
The dollar figures cited above assume that standard 50A/unit service with low-amp heat-pump water and space heating will handle the load. Load calculations and other factors, however, may indicate that a main panel upgrade is required, or the owner may want more capacity for future electric dryers, stoves, and other electrical appliances. A main panel upgrade may run another $30K or more.
The Downsides of Low-Amp Heat-Pump Systems
Low-amp systems are touted as a way to avoid a main panel upgrade in older multi-unit buildings. In reality, however, they come with significant trade-offs:
- Lower heat output: results in slower heat delivery and longer recovery times, especially during cold snaps or simultaneous multi-tenant demand
- Slower hot-water recovery: larger households may notice delays between showers or laundry loads
- Dependence on longer duty cycles: results in higher compressor wear over years, and more frequent noise and vibration issues at higher-speed operation
- Limited model availability: heat pump systems are newer niche products. Fewer contractors are familiar with them, there is a limited choice of brands, sizes, and parts, and lead times for replacements or service are longer. They’re also more expensive than gas furnaces
- Shared-circuit constraints: with the main service remaining at 200 Amps, per-unit subpanels may need optimization to avoid circuit overloads during peak winter heating, cooking, and laundry use
- Lower efficiency than full-sized heat-pump systems
- AC in SF? The cooling ability of heat pumps may be invaluable in Arizona, but negligible in San Francisco. Of course, with a warming climate that could change
Is There an Alternative to Electrification?
No law requires you to ditch your gas water heaters and furnaces if they’re in good working order. So here’s a medium-term alternative to replacement: keep them
running. With regular inspection and conscientious maintenance, quality gas water heaters can last 15–20 years (vs. 8–12 standard), and furnaces 25–30 years (vs. 15–20).
How to keep your gas water heaters running longer:
- Install a powered anode rod: prevents tank corrosion and adds years of life to the unit. If not powered, replace the sacrificial anode every 3–5 years
- Flush the tank annually: removes sediment and improves efficiency. Use the water for your garden
- Check and replace the temperature and pressure relief valve every few years for safety
- Inspect and clean burner/pilot assembly to ensure efficient combustion
- Keep venting and intake clear for proper airflow to prevent overheating
How to keep your gas furnaces running longer:
- Replace air filters regularly to keep airflow balanced and heat exchanger cool
- Clean burner, flame sensor, and blower annually
- Lubricate fan motor (if applicable) to reduce wear
- Seal duct leaks and insulate ducts to lower runtime and stress on components
- Install surge protection to protect the control board
- Use a smart thermostat; reduce unnecessary cycling
- Check the heat exchanger for cracks yearly
Conclusion
While there are sound reasons to support electrification in new construction and major remodels, the prohibitive cost and complexity of upgrading the many thousands of Victorians and Edwardians in San Francisco, especially historic buildings, makes the conventional approach discussed in this article untenable for most small property owners. An exemption for older buildings or an alternative approach to electrification
is needed. New “all-in-one” heat pump systems briefly mentioned earlier may provide a workable solution, but this brand-new technology has not yet been tested by wide usage in multi-unit buildings.
Reprinted with permission of the Small Property Owners of San Francisco Institute (SPOSFI) News. For more information on becoming a member of SPOSFI or to send a tax-deductible donation, please visit their website at www.smallprop.org or call (415) 647-2419.