New York Kills the “100-Foot Rule.” Real Estate Just Lost a Quiet Gas Discount.
New York quietly rewrote a line of development math that has shaped residential construction for decades: the state is ending the so-called “100-foot rule,” a policy that effectively spread the cost of many new gas hookups across existing utility customers.
Governor Kathy Hochul signed the bill December 19th, and her office says the change will take effect in 12 months and applies to residential buildings. Utilities will still be required to provide gas service, but new applicants — in practice, developers and homebuilders — will have to pay the full material and installation cost of connecting to the gas system instead of pushing that cost onto everyone else’s gas bills.
For commercial real estate owners, investors and planners, this is not just an Albany fairness story. It is a development-economics story — and a signal about where utility policy is headed as states try to balance affordability, electrification and grid readiness.
What the “100-foot rule” did — in plain English
Under the old structure, if a new home (or residential building) was within 100 feet of an existing gas main, the utility would typically cover the cost to extend service — and then recover those costs from the broader customer base through rates. Hochul’s office framed it bluntly: existing customers were subsidizing new hookups “at a brand new house that is not their own.”
The new law flips that. The Assembly bill language shows the direction clearly: applicants for new gas service must pay (or agree in writing to pay) the material and installation costs for the pipe or facilities needed to enable service.
Supporters argue the rule had become an expensive, outdated incentive to expand gas infrastructure. An estimate frequently cited by sponsors and advocates is about $600 million a year in costs borne by ratepayers.
Why this matters to building owners and developers
For the real estate audience, the most important shift is where the cost lands.
When a gas hookup is treated as “free” to the project, it can make mixed-fuel designs feel like the default: gas for space heat and domestic hot water, electric for everything else, and EV charging as an add-on. When the hookup cost becomes a line item the project must carry, the comparison changes — especially for multifamily and mixed-use where you’re making long-term decisions about central plants, venting, shaft space, rooftop equipment and electrical capacity.
That does not mean every project goes all-electric tomorrow. It does mean developers now have to do the math with fewer hidden subsidies — and that tends to push teams toward options where costs and control are clearer: heat pumps, electric domestic hot water strategies, better envelopes, and behind-the-meter tools like load management and storage.
This repeal also lands in a state that is already wrestling with the “future of gas” through formal planning and regulatory proceedings. New York’s Department of Public Service has an active gas planning case (20-G-0131), and the Public Service Commission has issued orders aimed at improving gas system planning and transparency.
Mixed-use developers: this is a pro forma and design meeting, not a press release
If you’re building apartments over retail, the headline question becomes: Do you still want gas in the residential portion, and if so, what is the total installed cost now that the hookup isn’t “socialized”?
A few practical implications to expect:
Upfront costs may rise for gas-forward projects. That’s the point of the policy shift. Builders and some utilities warned it could raise construction costs, and National Grid said it was disappointed, while also signaling it may seek consumer protections during the one-year runway.
Electrification can get easier to justify — but only if electrical planning is early. Many “all-electric is cheaper” debates fall apart when teams discover late in design that they need a bigger service, a longer utility timeline, or a more complex distribution plan.
Your permitting and community narrative matters more now. If you choose gas, you will be writing a larger check for the privilege — and in some jurisdictions you may face more scrutiny about long-term emissions and future retrofit risk.
Here’s the nuance: New York’s broader all-electric new-build policy environment has been messy. The state agreed to delay implementation of its All-Electric Buildings Act rules while litigation proceeds, which reduced near-term certainty for some developers. Ending the 100-foot rule doesn’t resolve that uncertainty — but it does change the cost baseline in a way that nudges projects toward electric-ready designs even in a “mixed policy” moment.
The hidden CRE takeaway: this is about rate design and stranded-asset risk
From an investor standpoint, the 100-foot rule wasn’t only about individual hookups. It was about system expansion — adding new customers to gas infrastructure at a time when many states are trying to cut emissions and avoid saddling remaining gas customers with rising costs over time.
That “who pays” debate is becoming central to utility regulation nationally. A Rocky Mountain Institute analysis of New York’s gas line extension subsidies estimated roughly $1 billion in added costs to ratepayers over five years (2017-2021) and noted the financial risk of expanding gas assets amid expected demand declines.
Translated for CRE: Policy is starting to price the transition risk. If the market expects less gas demand long term, regulators become less willing to hide expansion costs in everyone’s bill.
What to do next: a simple checklist for owners and planners
You don’t need to become an energy expert to respond well. You just need your project team asking the right questions early:
What’s our true cost of gas service now — including the connection, not just the equipment? (Push the utility and your engineer for a clear estimate and schedule.)
If we go all-electric (or mostly electric), what electrical upgrades are required — service size, transformer work, switchgear lead times — and who owns each scope?
What’s our load shape? Multifamily EV charging, heat pumps and amenities don’t just add kilowatts — they add peaks. Peaks drive costs.
Can we reduce peaks instead of buying more grid? Load management, staged EV charging, thermal strategies, and (in the right cases) batteries can avoid expensive demand spikes.
How do we keep options open? Conduit, panel space, electrical rooms and roof layouts are cheap to plan early and painful to retrofit later.
The bottom line for CRE
New York’s repeal does not ban gas. It does not instantly make every building all-electric. What it does is remove a long-running subsidy that made gas expansion feel frictionless — and replaces it with a more transparent price signal developers can’t ignore.
For owners and investors, the smart posture is neither panic nor politics. It’s disciplined planning: treat energy as a core development variable (like parking, stormwater and telecom), run scenarios, and choose the mix that best fits the asset’s tenant profile, local utility realities and long-term operating risk.
Every building, property and campus is still a custom situation. But the direction of travel is getting clearer: states are increasingly pushing projects to “show their work” on energy — and to use every tool available, not just the default fuel choice.
