Santa Fe is an expensive place to live. But it’s also an expensive place to build. Affordable housing and the bottom line of developers often clash.
An old neighborhood just east of where Cerrillos Road meets St. Michael’s Drive is about two and a half miles from Santa Fe’s historic plaza. It’s a mix of new pueblo-style houses and old, modest homes that have been here for decades. Living here, says low-income housing advocate Sonya Maria Martinez, is getting more and more expensive with each year that goes by.
"There’s a few families in this area that have lived here for three or four generations. But as you can see this one is relatively new, and there’s a Mercedes Benz parked right in front of it," she said.
Martinez is with the Chainbreaker Collective, a nonprofit that advocates for affordable housing. She says new houses and apartments like these have an impact on property values throughout the neighborhood.
To make her point, she motioned towards a new two-story house where an old family home used to be.
"The price goes up when you take down your grandma and grandpa’s old little casita and you put up something like this," she said.
And when the price goes up, low-income residents get pushed out. And where are they supposed to go then, Martinez asks?
Until this year, apartments had to offer a percentage of their units at a price low-income renters could afford. But not anymore. Now, the city is giving developers the option of paying a fee instead. Martinez is skeptical.
"How much money is that that they’re asking for from the developers, and the contractors? How is that amount going to create affordable housing, and where is that affordable housing going to be?" she asked.
Here’s how it works: the city calculates how much assistance low-income renters would need to afford to live in a proposed new development. The developer can then choose to pay the city that amount as a fee upfront, instead of offering rental units that low-income folks could afford on their own. The city can use the fee money as rental assistance for low income residents.
The city hopes that will make Santa Fe more attractive for developers, and keep help available for renters. Question is, will that be enough to get more housing built here?
"It’s a very tricky puzzle, said Peter Aberg, a developer out of Dallas who is trying to build a new apartment complex in Santa Fe’s rail yard. "In Santa Fe you have about a 97 percent occupancy city-wide, for apartment units."
With so few rentals available in the city, prices tend to stay high, so making housing affordable in the current environment is tough. But with higher costs than other states and fewer places to build, developers can have trouble getting new housing projects off the ground.
"It’s harder in the sense of, number one it’s harder to find sites, number two, your construction costs are anywhere from 25 to 35 percent higher than they would be in Texas," Aberg said.
Building low-income housing in those market conditions can be a money loser for developers like Aberg. So his firm decided to pay the fee instead of building affordable affordable apartments.
"Our rents are going to start around $900 and go up from there," he said. "I don’t think we’re going to be that much above the market."
But for people working in hotels and washing dishes in restaurants, the market itself is just too high. Even $900 a month won’t work for someone making minimum wage.
"Trying to make it on daily terms and trying to save up for a place is just getting ridiculous," said Dom Toledo. He and his girlfriend Dionna Tyndall moved from Albuquerque to Santa Fe to make a fresh start. They’ve been looking for jobs and an affordable place to live for months. So far, nothing.
"We even went and applied for section eight housing, and the waiting list is two years," Tyndall said. "We can’t wait two years. We need a house of our own, or at least a little studio would work."
If the affordable housing fee plan works out like the city hopes, people like Toledo and Tyndall will be able to find a place and get rental assistance if they need it. But that doesn't help them, or others in their position, get into an affordable place right now. And with the fee program still in its pilot phase, it could be years before Santa Fe’s low income renters are able to find a home they can pay for.
KUNM’s Public Health New Mexico project is funded by the WK Kellogg Foundation, the Con Alma Health Foundation and the McCune Charitable Foundation. Find out more online at publichealthnm.org.