A 4o gallon water heater is, typically, about 30 to 40,000 btu. So, at the standard calculation method of 50 cu ft per 1,000 btu, your room appears too small without outside air.
Your room = 8x7x9 = 504 cu ft
water heater @ 30,000 btu= 30 x 50 cu ft = 1,500 cu ft
@reknney gave you code information. He gave you good cause, so I deleted my post after his.
But here it is again, from another angle:
You have a small room. You have an exhaust fan in that room. In your case you have an atmosphere vented water heater. ANSI depressurization limit for that water heater is -5 pascals. Close the door, turn on the ceiling fan, and you exceed that depressurization limit. Now turn on the hot water and the water heater fires up. You now have CO and other combustion gasses entering the room. CO is toxic and kills people.
That condition very likely will occur with a power vented water heater. It may even happen with a closed combustion instant water heater!
I’ve tested these conditions (Combustion Appliance Zone Test - do a search) and have seen -45pa, close to the -50pa limit of the closed combustion unit, and definitely well beyond that of the atmosphere vented and the power vented unit.
Your choice if you want to call it or not… Are you an inspector, or are we wasting our time with a homeowner??
How would you perform your calculations and do you account for de rating the appliance for your elevation. Any calculations you see in the IRC are done at sea level.
I thought the reason was the code said so on fuel fired appliances.
If you smell “fuel”, you have a gas leak.