Santa Fe is not alone in its troubles finding housing for lower- and middle-income earners. Across the state, and especially in Northern New Mexico, the housing divide is growing wider. Increasingly, the chasm between renting and owning is harder to cross.
According to a new report from the New Mexico Mortgage Finance Authority, just 14 percent of Santa Fe County renters can afford to buy a median-priced home. That's second only to Taos County's 10 percent mark. Affordability increases only slightly when considering the homebuying power of all households: 30 percent theoretically earn enough to buy a home in Santa Fe compared to a paltry 22 percent in Taos. The state agency warns that other factors mean even fewer people can afford a mortgage.
Among New Mexico's urban counties—Santa Fe, Bernalillo, Sandoval, Valencia, Doña Ana and San Juan—Santa Fe stands alone in having poor housing affordability. Its struggles are similar to those found not only in tourist towns like Taos and Ruidoso, but to oil patch counties like Eddy and Lea.
"Maintaining a healthy affordable market is really important," the Mortgage Finance Authority's Monica Abeita told a legislative committee Monday. She directs policy and planning for the agency. "When prices go up, you don't have anywhere to house your service workers unless your rents are fixed."
That's a familiar theme to state Sen. Nancy Rodriguez, D-Santa Fe, who chairs the New Mexico Mortgage Finance Authority Act Oversight Committee that Abeita spoke to this week. Aside from being a mouthful even for bureaucratic nomenclature, the group of legislators is in charge of monitoring the state's effort to put roofs over the heads of its residents. Much of that work happens through the finance authority—but it also happens at the local level.
At the meeting, Alexandra Ladd, the city of Santa Fe's affordable housing director, gave lawmakers a glimpse of how cities and counties can find ways to use a patchwork of state laws and federal programs to leverage construction of affordable housing, while still giving private developers the bottom line they demand.
Santa Fe is one of the relatively few communities around the country that has what's called inclusionary zoning. If developers want to build homes or apartments, they have to build and sell a percentage of them to income-certified residents. For single-family homes, it's 20 percent of the development.
At Las Soleras, the city's largest current development, builder Pulte Homes would have been required to build 60 affordable houses. That's a big ask; big enough that Pulte's stockholders wouldn't tolerate eating into profit margins that deeply. So, Ladd explained, the city leveraged a 2004 state law that lets the government donate resources to private companies if the donation addresses affordable housing needs.
So instead of building 60 houses for low-income owners, Pulte proposed buying 4.5 acres zoned for multifamily housing and donating it, along with infrastructure for the site. Instead of giving it directly to the nonprofit Santa Fe Housing Trust to build a planned apartment complex with 73 affordable rental units, it donated the land to the city of Santa Fe, which acted as a pass-through. Pulte got a 50 percent state tax credit for its charity and, because the land was then donated to the Housing Trust by the city, it meant the Soleras Station project scored higher on its application for a federal Low Income Housing Tax Credit, which it won. Construction on the apartments began this fall.
Impressive though the Soleras Station solution might be, Santa Fe faces major challenges to home affordability. While owning a home is affordable for just three of every 10 households in the county, 71 percent of households in the county own a home. What that means is that a lot of people who have managed to buy a home in Santa Fe County spend more of their income on housing than is recommended—something that comes as no surprises to owners or renters. That number is generally considered to be around a third of household income.
The Mortgage Finance Authority says second homes like those in Santa Fe's market play a huge role in pricing the market away from the middle class. "It really alters the housing market quite a bit," Rodriguez said.
The need for help is growing more evident, not less. Last year, 2,500 families used mortgage products from the group. "And this year it's going to be far more than that," the authority's executive director, Jay Czar, told lawmakers Monday.
Consider that prediction in light of the fact that, in most of New Mexico, population growth lags the rest of the US. In fact, all but two counties (Los Alamos and Sandoval) trail the rest of the country's five-year growth rate. Coupled with low average income, New Mexico lands among the Mississippis and West Virginias when it comes to household poverty. In the last year, the state's population has ticked up ever-so-slightly, but with more people comes more need for places to live.
New Mexico's way out won't come quickly and, in the eyes of many who are looking for solutions, not without some creative thinking.
