Federal Court Rejects California City’s Natural Gas Ban

A federal court of appeals struck down a California city’s ban on natural gas hookups in new buildings. The decision could deflate a growing trend around the country among municipalities trying to ban gas appliances because of environmental and public health concerns.

San Francisco’s Ninth Circuit Court of Appeals ruled that Berkeley’s 2019 ban is preempted by the 1975 Energy Policy and Conservation Act in an opinion delivered by Judge Patrick Bumatay.

The California Restaurant Association had sued the city over the decision, arguing the ban would prevent its members from moving into new buildings.

“Natural gas appliances are crucial for restaurants to operate effectively and efficiently, as they allow for a wide variety of cuisines and innovations in the restaurant,” Jot Condie, the association’s CEO, said in a statement after the ruling. “Cities and states cannot ignore federal law in an effort to constrain consumer choice, and it is encouraging that the Ninth Circuit upheld this standard.”

San Francisco, New York state, San Jose and Seattle have natural gas bans in the works. New York, for example, is trying to ban fossil fuel furnaces, water heaters, clothes dryers and gas stoves in buildings as well as single-family homes.

The Ninth Circuit’s decision could set up a legal clash that only is resolved at the Supreme Court. In a concurring opinion, Judge Diarmuid O’Scannlain wrote that he agreed that federal law preempted Berkeley’s ordinance but primarily because its precedent set by the Ninth Circuit. O’Scannlain noted differing decisions among other federal courts and seemingly conflicting Supreme Court rulings, suggesting further guidance is needed.

Mortgage Applications Fall

An uptick in mortgage rates reduced the number of applications for new loans and refinancing last week.

The Mortgage Bankers Association reported Wednesday that loan applications to buy new homes fell 10% and is 36% lower than the same week a year ago. Refinancing applications dipped 6% and is 56% lower than a year ago.

Joel Kan, MBA’s deputy chief economist, said in a statement that mortgage rates are a full percentage above the same week last year. “This leaves very little refinance incentive for most homeowners,” Kan said.

The Federal Reserve Board’s rapid increase in interest rates sent mortgage rates soaring last year. Rates for 30-year fixed-rate mortgages ranging from 6.27% to 6.75% are more than double than those of early last year, which prompted a slowdown in home sales.

“Affordability challenges persist and there is limited for-sale inventory in many markets across the country, so buyers remain selective on when they act,” Kan said.

Truckload Shipping Rates Fall

The price to ship goods on trucks continues to trend lower, signaling an easing of supply chain costs.

The FreightWaves National Truckload Index shows that prices for hauling goods by truck have declined through the first quarter of the year to seven-day average of $2.23 per mile. On Jan. 2, the price was at $2.83.

FreightWaves, an industry price reporting firm for the freight market, reported last week that the downward trend is stronger than would be considered normal. Taking the cost of fuel out of the pricing, the industry’s rates are 7% higher than in April 2019.

The downward trend affected earnings for Marten Transport’s truckload segment showed an operating income of $10 million in the first three months of the year compared to $15.6 million in 2022’s first quarter.

But the company drove more miles, increasing from 35.3 million to 38.3 million. That helped increase revenues from $95.1 million to $102.3 million.