All-Electric Rule – Developers’ Worst NIGHTMARE!
San Francisco’s proposed ordinance mandating all-electric systems in major building renovations could raise housing costs, drawing concern from developers and residents despite its climate benefits.
At a Glance
• All-electric systems would be required for major renovations starting Jan. 1, 2026
• Exceptions for affordable housing and restaurants would phase out by 2031
• Developers warn the policy could increase rents due to compliance costs
• Supporters cite reduced emissions and improved air quality as benefits
San Francisco’s Bold All-Electric Expansion
In July 2025, San Francisco introduced legislation to extend its all-electric requirement beyond new construction to major renovation projects. The measure seeks to eliminate natural gas infrastructure as part of the city’s aggressive climate strategy. City officials say the change will improve air quality and reduce greenhouse gas emissions in alignment with public health goals.
Watch now: San Francisco’s All-Electric Mandate Explained · YouTube
If adopted, the ordinance will take effect on January 1, 2026. Temporary exemptions will be granted to certain categories, including affordable housing developments and restaurants, but these will expire between 2027 and 2031. The proposal builds on an earlier policy that applied only to new buildings, marking a significant escalation in the city’s decarbonization efforts.
Environmental advocates, such as the San Francisco Department of the Environment, argue that the measure will contribute to long-term emissions reduction and healthier indoor air quality, while also setting a precedent for similar rules in other jurisdictions.
Stakeholder Concerns and Implications
Building owners and developers have voiced concerns over increased construction and renovation costs, as well as planning complexities created by the all-electric requirement. Compliance will involve technical feasibility assessments and exception management, potentially delaying projects during the transition period.
Housing policy researchers at the Terner Center for Housing Innovation caution that developers could pass on these costs to renters, contributing to higher housing prices in an already expensive market. The restaurant sector, which heavily depends on gas cooking, values the temporary exemptions but remains uneasy about the looming phase-out date.
Proponents from organizations like the Rocky Mountain Institute point to case studies where building electrification reduced emissions and energy costs over time. They believe San Francisco’s approach could influence future state and federal building standards.
Political and Economic Repercussions
San Francisco’s move reinforces its reputation as a leader in climate policy but raises questions about balancing environmental ambitions with economic realities. Legal analysts note that the ordinance could face court challenges similar to those encountered by Berkeley’s natural gas ban.
A 2025 policy analysis by Reuben Law highlights the tension between immediate costs and long-term savings, especially for small businesses and affordable housing projects. While electrification may lower operational expenses over decades, the upfront investment is significant, and supply chain readiness for all-electric components remains a concern.
Public health advocates, including the American Lung Association, strongly support the transition for its air quality benefits. Meanwhile, the Building Owners and Managers Association of San Francisco emphasizes the importance of phased implementation and financial assistance to prevent disruption in housing production.
As the Board of Supervisors prepares to vote, San Francisco’s decision will be closely watched by other municipalities considering similar electrification mandates—potentially shaping the future of urban energy infrastructure across the United States.
Sources
San Francisco Planning Department
San Francisco Department of Building Inspection