Your math relies on a fundamental misunderstanding.
Assuming the Bay Area won't construct a significant number of new homes we only need to look at existing homes. The rule only covers new installations, which will be mostly people replacing broken systems and a few upgrades. How much more will it cost to replace your furnace when it has to be electric compared to when you could replace with gas?
That turns out to be the wrong question too, though. Per Angie's list the averages heat pump install costs $1,514 less than the averages gas furnace install [1]. Gas vs electric boilers costs around the same, so let's say the savings from the heat pump install and the loss from needing to upgrade your electrical system even out and the unit replacements cost about the same.
But you lose money on the routine operating costs. A rough estimate [2] based on Bay Area Dec 2022 energy prices [3] estimates that a 60,000 btu gas furnace would cost $579 less annually to operate than an analogous 5 ton heat pump with a good HSPF rating (10).
Is this a crazy amount to spend every year per household on saving that many people?
(Interestingly the the Bay Area spends around the same on cops per household[4], but there's no good data on how many lives that saves.)
Edit: Even if you disagree that the replacement costs about the same, remember to divide the delta by the 10-15 year lifespan of the unit so that your cost and lives saved are in the same unit.
[1] https://www.angi.com/articles/how-much-does-heat-pump-cost.h...
[2] https://www.angi.com/articles/how-much-does-it-cost-install-...
[2] https://www.pickhvac.com/hvac/furnace-vs-heat-pump-cost/
[3] https://www.bls.gov/regions/west/news-release/averageenergyp...
[4] SF + San Jose + Oakland police, not counting state troopers, was 1.079B in 2021 per https://cities.bythenumbers.sco.ca.gov/#!/year/2021/operatin...