NEW MEXICO’S AFFORDABLE HOUSING CRISIS: CAUSES, SOLUTIONS AND WHAT THE STATE IS DOING TO SOLVE IT
On May 22, the Legislative Finance Committee (LFC) held one of its regularly scheduled meetings. A report on homelessness and affordable housing was delivered to the committee.
The 4 key take aways of the LFC report on affordable housing are:
- Since 2017, rent in New Mexico has increased by 70%, while wages have grown by 15%.
- Almost half of all renters are cost-burdened, paying more than 30% of their income for housing.
- According to the U.S. Department of Housing and Urban Development standards, virtually all renters with household incomes under $20,000 are cost-burdened.
- New Mexico stands to lose 5% of its 29,000 publicly assisted rental units over the next 5 years and double that in 10 years as affordability commitments expire or the condition of units deteriorates.
The housing shortage is related to economics, market cost of home, the development community’s inability to keep up with supply and demand and the public’s inability to purchase housing or qualify for housing mortgage loans.
In April 2023, the median listing home price was $375,000 in New Mexico, trending up 13.6% year-over-year. The median listing home price per square foot was $200. The median home sold price was $349,500.
The Governor signed an executive order that proclaimed in part as follows:
“New Mexico does not have enough affordable housing to meet the need, which is driving up rates of homeless. Reports show a need for 15,500 affordable units to house the number of people living at 30% or below the local median income and a shortage of 3,000 vouchers for permanent supportive housing and rapid rehousing.
Rapid costs of rents and mortgages are increasing the number of homeless in New Mexico, and the cost of homelessness is great and inextricably link with the costs of health care and other supportive services in our State.
There are large homeownership disparities among Black/African American and Indigenous households, reaching greater rates than existed when the Fair Housing Act was put into place and we see these disparities reflected in rates of homelessness among minorities.
Development of housing in New Mexico is slowed down by barriers in zoning, inefficiencies in inspections and permitting, workforce shortages, and lack of public resources.
Local governments and tribes have limited resources and capacity to boost community revitalization without supplemental assistance from state resources.”
CAUSE OF HOUSING SHORTAGE
In response to the spike in the number of homeless in the state and the unavailability of low-income housing, Governor Michelle Lujan Grisham has now created an all-volunteer Housing and Community Revitalization Investment Council.
According to the Governors Executive Order, the Statewide Investment Plan is to provide recommendations to address the following identified areas:
- Gaps in available housing resources
- Priority focus areas for meeting the State’s housing shortages
- Inefficiencies in regulatory and zoning that impact housing development and zoning that impact housing development
- Investments in housing development
- Guidelines and standards for homeless services
- Investments and programs to improve disparities in home ownership
- Creation and facilitation private partnerships to address housing
- Lack of infrastructure related to housing,
- Lack of creative housing options that move from assistance to ownership’
- Service programs to address housing stability.
- Workforce and business shortages in the housing development industries
- The facilitation of public-private partnerships.
Just about every state in the union is facing a housing crisis of limited supply and rising costs. New Mexico, like many other states, is trying to do something about this seemingly intractable problem. The proposed solutions to date are mere Band-Aids. It will take a “Marshall Plan” type effort to make serious inroads into this situation. Neither the will nor the way appears to exist for this happen in the Land of Enchantment.
Excerpted from Pete Dinelli’s Blog of June 26, 2023