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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 1 Section Name: STUDY SESSION Account Number: 10-1311 File ID: 25-10589 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: November 03, 2025
SUBJECT:
Reach Codes for Cooling Upgrades and Planned Home Renovations, 2025 Code Cycle — Informational RECOMMENDATION:
Provide direction on reach codes options for cooling upgrades and planned home renovations for the 2025 Code Cycle.
BACKGROUND:
Every three years, California updates its Building Standards Code, known as Title 24, to incorporate the latest technology, best practices, and policy goals for safe, efficient, and sustainable buildings. Title 24 includes requirements for building safety, energy efficiency, and green building practices. The California Green Building Standards Code (CALGreen) sets the statewide baseline for sustainable design, such as water efficiency and waste reduction, while the California Energy Code establishes minimum energy efficiency standards, such as for insulation, heating and cooling systems, lighting, and solar.
The City of San Mateo updates its building codes every three years in alignment with the state’s code cycle and often adopts local amendments that bolster the state’s minimum requirements. In 2015, San Mateo established its first reach code, and since then has regularly explored and adopted reach codes to advance San Mateo’s Climate Action Plan priorities. At the June 16, 2025 City Council meeting discussion of the Electrify San Mateo Sustainable Building Strategy, City Council directed staff to further explore reach codes during planned equipment upgrades and home renovations and conduct broad community engagement on potential reach code approaches to adopt.
Peninsula Clean Energy (PCE) is a joint powers agency established in 2016 to provide clean electricity in San Mateo County.
PCE supports jurisdictions in the adoption of reach codes to advance local and regional climate goals. Through the Bay Area Reach Codes effort, PCE, in partnership with Silicon Valley Clean Energy (SVCE), is providing model ordinances and technical support to city staff. The Bay Area Reach Codes team developed model codes for the following four reach code options:
1) Cooling upgrade requirements for single family homes, duplexes and townhomes 2) Cooling upgrade requirements for non-residential buildings 3) FlexPath for single family homes, duplexes and townhomes 4) Electric-readiness requirements for single family homes, duplexes and townhomes This report provides background on reach codes, details the four reach code options, and summarizes contractor and community engagement and feedback, and feedback from the Sustainability and Infrastructure Commission.
REACH CODE BACKGROUND
The City of San Mateo has a strong history of adopting reach codes and being a leader in sustainability. In the last five years, more than 70 cities adopted local regulations requiring new construction to be all electric, including the City of San Mateo. The City of Berkeley was notably one of the first to adopt such a requirement in August 2019. On April 17, 2023,
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the Ninth Circuit Court of Appeals in California Restaurant Association v. City of Berkeley determined that a local ordinance that generally prohibited the installation of natural gas infrastructure was preempted by federal law, namely the Energy and Conservation Act (EPCA). Because of this litigation, in 2024 the City had to pause enforcement of the City’s reach codes that required new all-electric construction and required heat pump installation during air conditioner replacements in single family homes, duplexes, and townhomes.
On January 21, 2025, the City Council adopted a reach code that requires energy performance margins for new construction to replace the City’s unenforceable new construction reach code. This reach code was needed to bridge a gap and will expire at the end of the current code cycle on December 31, 2025. The Bay Area Reach Codes partnership developed four model reach code options for the 2025 code cycle, which is the cycle for the next three years. None of the reach code options prohibit the installation of gas infrastructure or gas equipment to ensure EPCA conformance.
California Assembly Bill 130 (AB 130) restricts cities and counties from adopting local amendments to the California Building Standards Code applicable to residential units until June 1, 2031, with certain exceptions. The reach code options discussed in this report are within the exceptions provided in AB 130 and California Health and Safety Code Sections 17958.5, and 17958.7. Specifically, these reach code options are excepted from AB 130 because they “align with a general plan approved on or before June 10, 2025, and that permits mixed-fuel residential construction consistent with federal law while also incentivizing all-electric construction as part of an adopted greenhouse gas emissions reduction strategy.”
REACH CODE OPTIONS
These reach code options do not require whole home electrification, nor do they necessitate a property owner to initiate a project for the sole purpose of meeting the reach code requirements. In contrast to the Electrify San Mateo Sustainable Building Strategy effort that reviewed broad policy areas to electrify existing buildings and whole home electrification costs, the reach code options hone in on specific project opportunities to encourage building electrification and energy efficiency when work is already voluntarily being completed. Planning for major renovations and cooling upgrades involves planning for the financing and assembling the contractor or contractor team to go through this change. These are major investments and are the ideal time to consider additional measures that benefit the environment and living spaces through improved comfort, health, and safety.
This section of the report reviews four reach code options and includes an overview of reach code requirements, estimated greenhouse gas emission reductions, permit data analysis, and cost impacts. State law requires that local amendments to the Energy Code be both energy-saving and cost effective relative to the base codes. To make these findings, the City relies on cost-effectiveness studies provided by the California Energy Codes and Standards Statewide Utility Program working group, which include the technical basis to justify higher standards. The cost-effectiveness studies are lengthy technical documents that include energy modeling and utility rate analysis to demonstrate life cycle system cost-effectiveness. Cost impacts are briefly summarized below and a link to the cost-effectiveness analysis is also provided.
It should be noted that all of the options are associated with work that is already being done on existing buildings and would not require the initiation of work solely for the purpose of implementing the reach codes. 1) REACH CODE OPTION 1: COOLING UPGRADE REQUIREMENTS FOR SINGLE FAMILY HOMES, DUPLEXES, AND
TOWNHOMES
When a property owner opts to install a new or replacement air conditioner unit in a single family home, duplex or townhome, this reach code would require more stringent energy standards for the new and replacement air conditioning installations and maintain state minimum requirements for new heat pump installations for space cooling. The more stringent energy standards are related to attic insulation, duct insulation, air sealing, fan efficacy, and refrigerant charge verification. This reach code would not apply to gas furnace replacements or repairs. As mentioned above in 2023, the City had a similar reach code in place that required the installation for heat pumps during air conditioner new or replaced air conditioner installation. This reach code’s enforcement was paused in response to the federal court case. Reach Code Option 1 differs from the prior policy because it allows multiple pathways for compliance.
Staff reviewed the past three years of the City’s mechanical permit data which includes gas furnace replacements, air
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conditioner installations, and heat pump installations for residential and non-residential buildings. On average there were 328 permits per year and on average there were 216 heat pumps installed per year. Though our reliance on applicant reporting renders the data collection imperfect, staff feels confident stating that these numbers demonstrate growth in voluntary heat pump installations since the previous building code cycle. The data set cannot be easily filtered to compare building types (single family homes, multifamily buildings, nonresidential buildings) but staff estimates that the vast majority of permits, about 85%, are for single family homes, duplexes and townhomes. Although a large number of projects are already voluntarily installing heat pumps, the reach code policy would ensure that property owners consider a heat pump at the time of air conditioning installation. This is also an important future proofing opportunity because in 2029 the Bay Area Air District Rule 9-4 will require zero NOx equipment for all furnace replacements. If property owners miss the opportunity to install a heat pump now, it may be more costly and burdensome to transition to a heat pump once the Air District rules are in effect.
In terms of greenhouse gas emissions, heat pumps can provide significant reductions because they are far more efficient than gas furnaces (and electric resistance heat) and electricity in California is derived from low-carbon energy sources. PCE estimates this reach code would avoid approximately ~257 metric tons of carbon dioxide equivalent per year.
Detailed life cycle system cost analysis can be found 2025 Cost-Effectiveness Study: Single Family AC to Heat Pump Replacement1. To summarize, there is an upfront cost difference between heat pump and air conditioner installation. The cost-effectiveness study, review of California TECH rebate data, and PCE’s recent research shows that the installation of a heat pump on average costs between $12,400 and$ 14,700 and the installation of an air conditioner on average costs between $10,400 to $12,500. Note, San Mateo homeowners are eligible for a $1,500 rebate for heat pump systems and $10,000 zero percent interest loan from PCE. While there could be a small up-front installation cost difference, the heat pump saves property owners over $10,000 over 30 years due to on-bill savings compared to an air conditioner. If a homeowner is a CARE or FERA customer, then they are eligible for additional PCE rebate of $1,000 for a heat pump. If a homeowner is below 80% median income, they are eligible for Peninsula Clean Energy's Full Service Program, which offers no-cost electrification upgrades; including heat pump space heaters, heat pump water heaters, and whole-home electrification.
This reach code has been adopted by Palo Alto, Menlo Park, Mountain View, and Sunnyvale and more Bay Area cities are currently exploring adoption of this reach code approach. 2) REACH CODE OPTION 2: COOLING UPGRADE REQUIREMENTS FOR NONRESIDENTIAL BUILDINGS When a property owner opts to install a new or replacement air conditioner unit between 5 and 20 tons in a nonresidential building, this reach code would require more stringent energy standards for the air conditioner system installation and maintain state minimum requirements for heat pump installations for space cooling. Property owners can either install a single zone heat pump or a single zone air conditioner system with a furnace plus a heat recovery ventilator.
Staff estimates this would capture approximately less than 50 permits per year based on the permit data analysis described above and avoid approximately ~426 metric tons of carbon dioxide equivalent per year.
Detailed life cycle system cost analysis can be found in the 2025 Nonresidential Alterations: Reach Code Study2.Considering a range of building types of different ages, the single zone air conditioner pathway costs an average of $86,600. The single zone heat pump pathway costs an average of $85,500. The model reach code and cost-effectiveness study for this option was just recently made available and no cities have adopted this reach code to date. 3) REACH CODE OPTION 3: FLEXPATH FOR SINGLE FAMILY HOMES, DUPLEXES, TOWNHOMES When a property opts to do a major home renovation of a certain size or dollar valuation in a single-family home, duplex or townhome, this reach code would require the project to incorporate energy efficiency measures or electrification upgrades selected from a menu to achieve a target score. This reach code is named “FlexPath” because of the flexible 1 https://localenergycodes.com/download/2034/file_path/fieldList/2025%20Single%20Family%20AC%20to%20HP%20Cost- eff%20Study.pdf
2 https://localenergycodes.com/download/2049/file_path/fieldList/2025%20NR%20Alterations%20CostEff%20Report.pdf
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nature of the policy. The types of projects that would be applicable to the FlexPath would be elective major residential addition/renovation projects that may include plumbing, electrical and appliance or fixture upgrades. Applicants of these types of projects typically already have an architect, engineer, and energy code compliance expert on their design team who could help facilitate compliance with the FlexPath reach code. This reach code would not apply to routine repairs and maintenance, hazard mitigation, roof or windows projects, or ADUs. The ordinance language would also include economic hardship and technical infeasibility exceptions. This reach code approach is estimated to avoid approximately 730 metric tons of carbon dioxide equivalent per year by 2030.
Qualifying projects would be required to complete any combination of energy-related measures from the table below.
Project applicants would receive points for measures that were already installed prior to the project. The menu of measures and point values are determined by the Single-Family Cost-Effectiveness Study analysis:
FlexPath Menu of Measures
Measure Point Value
Induction Cooktop 1
Heat Pump Clothes Dryer 1
Water Heating Package 2
Air Sealing 2
Duct Sealing 3
R-49 Attic Insulation 4
Windows 4
R-15 Wall Insulation 5
New Ducts + Duct Sealing 6
R-19 Floor Insulation 9
R-30 Floor Insulation 10
Heat Pump Water Heater 12
Solar PV + Electric Readiness 13
Heat Pump Space Conditioner 18
The local FlexPath ordinance would need to establish a covered project definition and a target score. Staff is seeking Council direction on whether to pursue this reach code approach. If Council is interested in pursuing a FlexPath reach code, staff need direction on establishing the covered project definition and a target score.
FlexPath Covered Project Definition
If the City Council lands on this option, staff recommends establishing a square footage threshold instead of a project valuation to define the covered projects. The dollar valuation of a project is self-reported and could result in challenging compliance issues. Cities that have adopted a FlexPath ordinance vary greatly in their covered project definition. Menlo Park’s FlexPath ordinance applies to renovations valued at $100,000 or more and projects are required to select two measures from the list. Santa Cruz’s FlexPath ordinance applies to renovations of 350 square feet or greater and projects are required to achieve a target score of 9 points. Palo Alto’s FlexPath ordinance applies to renovations of 1,000 square feet and greater and projects are required to achieve a target score of 12 points.
To provide clearer outreach to the community, staff used 1,000 square feet or greater as an example FlexPath threshold.
Staff arrived at 1,000 square feet as an example threshold because it is a very significant home renovation. Note, the median house size in San Mateo County is 1,600 square feet. Through a preliminary scan of the permit data, setting the threshold at 1,000 square feet or greater appeared to capture 80-100 projects per year. Lowering the square footage threshold results in capturing a greater number of projects.
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FlexPath Target Score
If the City Council directs pursuing this option, staff need City Council feedback on establishing a FlexPath target score. The following describes an example project and possible measure packages that would achieve different target scores. In this example project, the property owner seeks to renovate 1,000 square feet of their home including the kitchen and living room. At $500/square foot, the example project construction is estimated at ~$500,000. The following describes compliance pathways for a target score of 12, 18, or 30:
To meet a target score of 12, the project includes a heat pump water heater (12 points), which costs an estimated $8,200 or roughly 2% of total project costs.
To meet a target score of 18, the project includes a heat pump space conditioner (18 points), which costs an estimated $12,500 or roughly 2.5% of total project costs. To meet a target score of 30, the project includes a heat pump water heater (12 points) and a heat pump space conditioner (18 points); these measures cost an estimated $20,700 or roughly 4% of total project costs.
For each of these scenarios, there is a parallel efficiency pathway that can be met using different combinations of insulation, air sealing, and window measures. The costs of the efficiency measures range from 4-7% of the total project costs. Some of these measures are likely included in the original project scope due to the scale of projects impacted by this reach code. Detailed cost information can be found in the 2022 Cost-Effectiveness Existing Study: Single Family Building Upgrades5 and the Application of the 2022 Studies to 2025 Energy Code6. 4) REACH CODE OPTION 4: ELECTRIC-READINESS REQUIREMENTS FOR SINGLE FAMILY HOMES, DUPLEXES, AND
TOWNHOMES
The electric-readiness reach code would require specific additions and alterations to include electric readiness as part of their project. The policy is focused on pre-wiring for gas cooking, water heating, clothes drying and outdoor appliances to reduce future retrofit costs. This policy does not guarantee the installation of electric equipment and GHG reductions cannot be quantified with this policy. In the long term, this reach code will save homeowners money on installing electrical infrastructure to support future electric equipment. The policy will also prepare homes for compliance Bay Area Air District’s Rules 9-4 and 9-6, which limit the sale of natural gas-fueled building appliances. This reach code mirrors electric-readiness requirements that are base code for new construction.
Beginning January 1, 2022, the City of San Mateo began implementation of electric-readiness requirements for laundry area and kitchen area requirements. This reach code option would expand on the City’s adopted reach code and apply to water heaters and outdoor appliances such as pool heating equipment, outdoor cooking appliances and outdoor heating appliances.
Typical electric infrastructure costs include reserving breaker space estimated for $0-$50, and running a new dedicated circuit, or conduit, which is estimated at up to $1,000 per appliance. Intervening when electrical work is already happening at or near or an appliance saves residents time and money as compared to needing to add the electric infrastructure separately in the future. Menlo Park, Mountain View and Sunnyvale adopted similar electric-readiness reach codes.
OUTREACH AND ENGAGEMENT
Per City Council’s direction, staff prioritized broad community engagement and hosted three community meetings, one virtual and two in-person. To promote the community events, staff reached out to the Daily Journal, posted flyers in the libraries and recreation centers, and posted through the City’s online social media channels and eNews. In effort to reach a broader audience staff also rebranded reach codes communications and messaging. Recognizing that community members might not be familiar with reach code terminology and verbiage, messaging was revised in effort to boost engagement. Participation in the meetings is summarized below.
Staff hosted an in-person community meeting on October 1 at the Main Library and 8 people attended. A majority of the attendees expressed support in the City pursuing reach codes and asked very specific questions about the policy details, 5 https://localenergycodes.com/download/1222/file_path/fieldList/Single%20Family%20Retrofits%20CostEff%20Report.pdf 6 https://localenergycodes.com/download/2081/file_path/fieldList/2022+to+2025+FlexPath+Memo.pdf
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implementation, and GHG impact. Staff hosted a virtual community meeting on October 21 at 6:30 pm over Zoom with four people attending and two participants in an exit poll showing mixed support, neutral, and no support across the reach code options. Staff hosted a second in-person meeting on October 23 at the Bayside Academy and 4 people attended. In the exit poll, all attendees supported Options 2 and 3. For Options 1 and 4, three attendees marked support and one neutral.
In addition, staff reached out to HVAC contractors, general contractors, architects, and engineers. Staff reached out to 50 HVAC contractors that had recently pulled a mechanical permit with the City and worked with PCE staff to email the ~100 HVAC contractors in their network to ask for feedback on Reach Code Options 1 and 2, cooling upgrade requirements and to invite them to a contractor-focused virtual webinar. On September 25 at 12:00 pm, staff hosted one virtual webinar for contractors regarding the cooling upgrade reach code and four people attended. In general, attendees understood the proposed reach code requirements and shared that they’ve seen an increase in the installation of heat pump HVAC systems in recent years. One contractor provided written feedback and shared that customers are motivated to purchase heat pumps now with the federal incentives and that the contractor does not see the need for the increase in requirements beyond the state.
Staff reviewed an interior remodel permit report for 2025 and found no duplicate names listed within project contacts.
This permit data reflects the diversity in contractors that are doing work throughout the City, as well as the tendency of this type of permit to be pulled by the property owner themselves. This made gathering contractor feedback on the FlexPath challenging. Staff did reach out by email to general contractors, engineers, and contractors but did not hear any responses.
SUSTAINABILITY AND INFRASTRUCTURE COMMISSION FEEDBACK
At the October 8 Sustainability and Infrastructure Commission, staff presented a similar report requesting Commission feedback on the four reach code options. Commissioners were supportive of Reach Code Options 1 and 2 for cooling upgrades, emphasizing the importance of rebate availability to support residential heat pump installation. Commissioners were also supportive of City Council adoption of Reach Code Option 3 FlexPath. Commissioners recommended the FlexPath ordinance impact projects that are 1,000 square feet or greater. Commissioners recommended starting with 1,000 square feet as pilot threshold and that the City could consider revising the square footage threshold in the future after evaluating implementation of the reach code. For the FlexPath target score, Commissioners were concerned that the target score of 30 would be too high and rigid for project applicants to comply with. Some Commissioners thought that 12 was too low and 18 or higher was the most appropriate target score. Commissioners in favor of a 12-point target score shared that starting with a more conservative target score would allow staff to gather lessons learned with this new reach code policy. Commissioners were also in favor of Reach Code Option 4 because it builds on the City’s existing electric- readiness reach code and is a sensible future-proofing requirement.
NEXT STEPS
Staff seek City Council direction on the four reach code options for cooling upgrades and planned home renovations.
Specifically, does the City Council direct staff to develop an ordinance for any of the four reach code options listed below:
1)Reach Code Option 1: Cooling upgrade requirements for single family homes, duplexes and townhomes 2)Reach Code Option 2: Cooling upgrade requirements for non-residential buildings 3)Reach Code Option 3: FlexPath for single family homes, duplexes and townhomes a. Defining covered projects
b. Selection of a target score
4)Reach Code Option 4: Electric-readiness requirements for single-family homes, duplexes and townhomes If the City Council directs staff to pursue any of the four reach code options, staff would develop a reach code Ordinance.
After Ordinance introduction and adoption, reach codes need to be filed and approved by the California Energy Commission (CEC) and filed and accepted by the Building Standards Commission (BSC) before they can be enforced. CEC approval can take roughly four months.
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Reach codes for new construction cannot be evaluated at this time because cost-effectiveness studies are not yet available. Cost-effectiveness studies are anticipated for Spring 2026. Staff will return to the Sustainability and Infrastructure Commission and City Council when these studies and model reach codes are made available.
BUDGET IMPACT:
Implementation and enforcement of reach codes is integrated into the existing plan check and building permit procedures.
ENVIRONMENTAL DETERMINATION:
This informational report is not a project subject to CEQA, because it consists of feasibility or planning studies for possible future actions which the City Council has not approved, adopted or funded. (CEQA Guidelines Section 15262.)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Public Comment
STAFF CONTACT
Andrea Chow, Sustainability Analyst
[email protected]
(650) 522-7007