What SoCalGas’s Win Says About the Future of U.S. Building Electrification

• Got gas?: What a Southern California utility’s win over a state ban on natural gas appliances says about the future of building electrification.

• Pay or go broker: A new judgement clears the way for a law that forces NYC’s landlords to pay broker fees.

• Rocket watch: The CEOs of Redfin and Rocket Companies explain the strategy behind the recent merger.

• Parking webinar: Join our not-boring look at how smart tech can eliminate friction and wasted space from outdated parking while cutting costs and increasing revenue. Sign up

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What SoCalGas’s Win Says About the Future of U.S. Building Electrification

Critics saw billions lost, advocates saw billions saved

A long-debated plan to phase out gas-powered furnaces and water heaters in Southern California has been voted down, marking a significant setback for building electrification efforts in the region and possibly nationwide.

The rules, meant to reduce nitrogen oxide emissions from residential appliances, would not have banned gas heaters or forced homeowners to electrify. Instead, they would have required manufacturers to ramp up sales of electric alternatives, from 30% by 2027 to 90% by 2036.

On Friday, the South Coast Air Quality Management District (SCAQMD) rejected a proposal that would have gradually shifted the market toward electric heat pumps, a decision shaped by an aggressive opposition campaign led by SoCalGas and affiliated industry groups.

The rules, meant to reduce nitrogen oxide emissions from residential appliances, would not have banned gas heaters or forced homeowners to electrify. Instead, they would have required manufacturers to ramp up sales of electric alternatives, from 30% by 2027 to 90% by 2036.

A mitigation fee of $50–$500 would have applied to gas appliance sales, far less than the projected public health costs they cause. Misinformation claiming the proposal was a ban on gas appliances dominated the discourse.

The vote, 7 to 5 against, came after two years of regulatory development, a six-hour public hearing, and mounting political pressure. One day before the vote, the Trump administration threatened legal action if the regulations were to pass.

Critics of the plan, including the Orange County Business Council and the California Business Roundtable (with ties to SoCalGas parent Sempra), argued the rules would burden homeowners with costs as high as $8.9 billion annually. SCAQMD staff rebuffed these claims during Friday’s hearing, citing flawed economic modeling and asserting the net financial impact would range from $174 million in added costs to $191 million in savings per year.

The health benefits were equally significant. Estimates showed the rules could prevent nearly 2,500 premature deaths and save $25 billion in public health costs over the next three decades.

While heat pump installation costs can vary, SCAQMD data suggests single-family homeowners often save about $1,000 compared to installing both a gas furnace and an air conditioner. Yet the potential economic and health benefits failed to outweigh political resistance. The rules, which would have updated regulatory codes 1111 and 1121, are now stalled indefinitely, having been sent back to the committee with no chance of revival this year.

This loss in the nation's most polluted air basin sends a warning to other jurisdictions considering similar zero-emission appliance rules. Environmental advocates, such as Dylan Plummer of the Sierra Club, say the campaign against these regulations was filled with “falsehoods about costs and consumer choice,” signaling a growing challenge for building electrification advocates as they seek to counter disinformation from fossil fuel interests.

The setback could have ripple effects well beyond Southern California. The Bay Area, which adopted a zero-emissions standard for heaters in 2023, and states like Maryland and potentially California as a whole, are watching closely.

What was poised to be the SCAQMD’s strongest regulation in decades has become a case study in how misinformation, industry influence, and political headwinds can stall climate action, even in progressive strongholds.

Overheard

Judge Clears NYC Broker Fee Law, Forcing Landlords to Cover Costs

A federal judge has cleared the way for New York City’s controversial broker fee law to take effect, rejecting an attempt by real estate groups to delay its implementation. Starting June 11th, landlords, rather than their tenants, will be required to cover the cost of hiring listing brokers under the Fairness in Apartment Rental Expenses (FARE) Act.

The Real Estate Board of New York and other industry groups had argued the law would upend the city’s rental market, lead to higher rents, and violate constitutional protections for private contracts and free speech. But Judge Ronnie Abrams dismissed most of their claims, stating the measure addresses a legitimate harm: the impact of hefty broker fees on housing mobility.

Under the previous system, tenants often paid thousands in broker commissions, even when they hadn’t hired a broker. An analysis by StreetEasy found average upfront costs for rentals with broker fees neared $13,000.

While the industry warns of negative repercussions—including fewer listings and higher rents—the City Council frames the shift as a step toward affordability and fairness. With median Manhattan rents at $4,500 and rising, the ruling may alter leasing dynamics in one of the country’s most expensive housing markets.

The legal battle, however, is far from over. James Whelan, the president of the Real Estate Board of New York, said REBNY will continue to litigate the case and explore avenues for appeal.

CEOs of Redfin and Rocket Companies Explain the Recent Merger

Rocket Companies, parent company of Rocket Mortgages, made the surprise move of acquiring the online listing platform Redfin for $1.17 billion earlier this year. Now the CEOs of both companies have gotten together to answer a Q&A about why the two companies thought they were better together.

One of the main reasons for the merger was to help bring more transparency to the home buying process. "Our fundamental ethos is exactly that consumers deserve better," said Varun Krishna, CEO of Rocket Companies. "They deserve a system that is more transparent, they deserve to have better rates, they deserve to pay lower fees, they deserve to be able to get into a home faster or sell a home faster."

Redfin's CEO Glenn Kelman also admitted that, despite all of the investment in technology, the real estate industry hasn't changed much and maybe never will. "And in most of the industry, if you build a better gadget, you sell leads to a traditional agent or to a traditional loan officer," he said. "For us, it just seems hard to build a better mousetrap, have the world beat a path to your door, and then give people the same old service at the same old fee."

Both companies have been hurt by high interest rates and historically low real estate transactions. If transaction volume does come back the merger between the two could make them a powerhouse in the industry. If interest rates stay elevated, though, this expensive acquisition could prove to be nothing more than a highly trafficked but minimally profitable website inside Rocket's portfolio of companies.

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