Locally
AHJ's do not consider newer water heaters, which are required to be FVIR type since 2003, to be an "ignition source" that needs to be elevated in a garage (or adjacent spaces considered part of the garage). I agree with that. So from a safety point of view I dont see a problem.
Now what your local code requires is another story. The code is what the inspector says the book requires ... not whats actually written in the book ...
Robert O'Connor, PE
Consulting Engineer & Inspector
LIU CW Post Adjunct Professor
NACHI Education Committee
www.reporthost.com/-rjo
I am absolutely amazed sometimes by how much thought goes into doing things wrong ...