Of all the ballot items decided in the recent election, one of the most intriguing was Santa Fe’s proposal to tax the sale of mansions to pay for affordable housing. The City Different, like many resort towns, is not only out of range for the army of service workers, who keep hotels and restaurants ticking, but also for teachers, cops and young professionals. It passed easily.
It’s one of those only-in-Santa-Fe initiatives. No other place in New Mexico has enough mansions to entertain such a tax.
But we need affordable housing across the state. How do small communities pay for it? Programs exist, but in the past year the state has begun looking at gaps and spending more.
Since December, the governor has announced two rounds of funding, some $19 million from the Casa Connection Grant Program, allocated to local governments and nonprofits to buy and/or renovate properties to house homeless people. The projects are required to provide services.
Four of the grants, to the cities of Albuquerque, Deming and Santa Fe, along with Española Pathways, involve renovating hotels. This is encouraging. Most towns in New Mexico have derelict motels that could be rehabbed to ease the housing crisis.
Last year, when the Albuquerque mayor made that part of his “Housing Forward” plan to add 5,000 housing units, it was a little controversial. One project ran into neighborhood resistance. Some critics scoffed at the idea as expensive and impractical.
At the time, I thought it would be useful for Albuquerque, which has more resources, to sort out the problems before smaller communities jump in.
Realtor Clay Azar supports the conversion of motels and office buildings. In an op ed last spring, he wrote, “This approach can be done at about one-third the cost of building a new unit from the ground up.” A city spokesperson has said the typical hotel purchase would be around $5 million and need about $3 million in work, mostly for adding kitchenettes.
It’s not a new idea. Ten years ago, private developers converted the Luna Lodge and the Sundowner, both on old Route 66, into 140 apartments using the federal low-income housing credits awarded by the state Mortgage Finance Authority (MFA), along with funding from the city and loans from the state Housing Trust Fund. The developer called it “neighborhood revitalization.”
In Santa Fe, the Lamplighter and Santa Fe Suites were also converted.
These and future units aren’t swank. They will have a small kitchen but probably not a full kitchen. Some apartments will be subsidized and some will receive rent. Azar doesn’t minimize the challenges of bringing properties up to code. The bigger challenge for the Casa Connection program will be to provide services that include connecting residents to healthcare, jobs or education.
We don’t have the option to do nothing. The state’s unhoused population jumped by half in the last year, and rents have spiraled 70% since 2017 while average wages grew just 15%, according to a report from the Legislative Finance Committee.
There’s movement on other fronts.
Recently, members of the legislative MFA Act Oversight Committee voted unanimously to allow the MFA to change the rules about how much money a household can make and still qualify. That means the MFA can help more people. The new threshold is calculated for each county, and the MFA can adjust the income limit in high-cost areas.
And the governor created a new housing council of legislators, homebuilders and nonprofit leaders to draft recommendations on how to spend the $84 million appropriated this year for housing and homeless programs. They will also look at inefficiencies in regulation and zoning rules and whether federal, state and local governments work together.
For people living in their cars, results won’t be swift, but the landscape should look better in a year.
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