New Jersey officials are tired of your old furnavce and boiler.
This month, they joined those from eight other states in setting a shared goal to have electric heat pumps provide roughly two-thirds of all residential-scale heating, air conditioning and water heating by 2030. By 2040, the goal is 90%.
The aim is to “reduce the carbon footprint of buildings,” which generate tens of millions of metric tons of CO2e greenhouse gases a year, said New Jersey Environmental Protection Commissioner Shawn M. LaTourette.
Buildings are the second-largest source of greenhouse gas emissions in New Jersey. They rank only behind vehicles, state reports say. In New York State, they are the largest.
“Implementing zero-emission concepts such as these into our homes and daily lives is integral to addressing the worsening effects of climate change,” LaTourette said. “This effort will benefit our economy, create jobs and contribute to healthy air.”
Heat pumps have already surpassed gas furnaces in sales in the U.S. Unlike gas furnaces, which burn natural gas and contribute to climate change, heat pumps operate by transferring heat from outdoor air into indoor spaces.
Advanced heat pumps can efficiently extract warmth from the air to heat homes even in freezing temperatures. Some can be used to provide hot water and cool buildings by reversing the process.
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As electric systems, heat pumps can run off renewable energy sources, such as wind and solar power. When running off the power grid, they can still offer significant cost savings for consumers.
A 2022 report from Acadia Center found that electrification of heating systems could bring reductions of 20% or more to the average New Jersey homeowner’s utility bills. The report, commissioned by the New Jersey Conservation Foundation, found that adding electric appliances and winterization strategies along with heat pumps could cut bills in half.
New Jersey and the eight other states pushing heat pumps — California, Colorado, Maine, Maryland, Massachusetts, New York, Oregon, and Rhode Island — plan to collaborate on various initiatives, including pursuing federal funding for incentives and promoting the installation of zero-emission, grid-interactive technologies in existing state buildings.
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The states agreed in a memorandum of understanding that at least 40% of efficiency and electrification investments should benefit “low-income households facing high energy burdens and communities historically burdened with elevated air pollution levels,” said a press release issued Feb. 7.
The states’ efforts coincide with recent federal commitments to support heat pump adoption. Last November, federal officials allocated $169 million for domestic heat pump production. Rebates and tax credits have also been offered to households making the switch to thermally efficient heat pumps and heat pump water heaters.
By tracking sales and collaborating with heat pump manufacturers, the states aim to stimulate production to meet the increasing demand. However, challenges remain, particularly in training enough technicians to install and maintain heat pump systems, said officials from the Building Decarbonization Coalition. The memorandum emphasizes the importance of workforce development and contractor training to ensure a skilled workforce capable of meeting installation demands.
A statement from the Building Decarbonization Coalition said a greater focus on workforce development, consumer education and affordability will be critical to the success of the transition. The memorandum nonetheless sends an “unmistakable signal to the marketplace that zero-emission homes are the future,” added Matt Rusteika, the coalition’s director of market transformation.
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To address vehicle emissions, state officials have been setting other deadlines. Last November, officials announced a new rule that will prohibit the sale of new gasoline-powered vehicles by 2035. Other states in the heat pump union — California, Maryland, New York, Oregon and Rhode Island — have adopted similar rules.
New Jersey’s rule, which went into effect on Jan. 1, will not prohibit the ownership or use of gasoline-powered cars come 2035. Consumers will also be able to drive new gasoline-powered light-duty vehicles purchased out of state, emissions standards aside.
Family members, lower income bidders, tenants and community development corporations will have an easier time purchasing foreclosed homes after Gov. Phil Murphy signed a bill Friday that overhauls the sheriff’s sale process.
Under the Community Wealth Preservation Program (A5664/S4240), New Jersey homeowners experiencing foreclosure, their next of kin, or tenants living in a foreclosed property would have “the right of first refusal” — or first shot when the property goes up for auction — at the upset price, which is the minimum price a seller would accept. That typically includes the outstanding mortgage, interest, fees and other costs.
The law aims to give lower-income families a leg up against large investment companies buying and flipping single-family homes at a growing rate. It lets a foreclosed-upon family, their family members, or tenants of the property to put down 3.5% at the auction, as opposed to the 20% deposit usually required.
“Black and brown wealth is hemorrhaging through the loss of foreclosed property, and the people who live in the community often do not have deep enough pockets to even participate in the foreclosure process,” said state Sen. Britnee Timberlake, D-Essex, the lead sponsor of the bill.
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“This bill is a creative opportunity for families to save their wealth at the time of a foreclosure sale by using financing,” Timberlake said. “This legislation also levels the playing field for renters, affordable housing nonprofit developers and people who want to purchase an abandoned home to restore and live in or to create affordability. This is what equity in systems look like.”
In September 2022, Murphy conditionally vetoed a similar bill (A793/S1427), writing he “wholeheartedly” supported the overarching objectives of the bill, but that he had “serious reservations regarding the legality, practicality, and unintended consequences of several of the proposed mechanisms for achieving these goals.”
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In the conditional veto, he asked lawmakers to rework language dealing with caps to auction prices, and properties that don’t sell at sheriff’s sales, among other things. He struck out a section of the bill that said the upset price — or minimum price accepted by a bank — must be capped at no higher than 50% of the outstanding mortgage, interest, fees or other costs owed.
Lawmakers reintroduced a new version of the bill, as opposed to voting to accept the language, or overriding the veto, and took out the 50% cap language.
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“That’s the key difference and that’s the reason our opposition was redrawn and we’re neutral on it,” said Michael Affuso, head of the New Jersey Bankers Association. “That was clearly problematic, that everyone could decide to default so they could get their principal reduced.
“When something like that could happen, government-sponsored entities like Fannie Mae and Freddie Mac could look and say, ‘Wait a second, every mortgage that we own in New Jersey is potentially worth significantly less than we think it’s worth, so we’re just not going to buy mortgages in New Jersey,'” Affuso said.
The bill Murphy signed on Friday also gave the right of first refusal to tenants of foreclosed-upon properties, which was not included in the previous bill, and required upset prices be made public at least four weeks before the sheriff’s sale, among other small changes.
How it works
For those who put down a 3.5% deposit at the auction, the rest would be owed within 90 days by cash, certified or cashier’s check, or wire transfer. They can pay with financing if they plan to use the home as their primary residence for at least seven years, and provide proof they have been pre-approved by a financial institution.
They must live in the home for at least seven years, though there are a handful of hardship exemptions for homeowners, like if the bidder or their spouse or child dies, the bidder becomes disabled or loses income.
A nonprofit community development corporation would have the second right of refusal if it agrees in writing to buy the property for the foreclosed upon family, their next of kin, or the tenant. The organization must negotiate an affordable lease for the family and give them the option to buy the property back from the organization.
“For too many, the dream of homeownership feels far out of reach,” Murphy said. “We are creating a new avenue to homeownership for individuals and families throughout New Jersey, giving many the opportunity to remain in the homes and communities they cherish while also protecting our neighborhoods from rapid investor-driven homebuying.”