The Demon Tattler

Will a Tax Increase Make Santa Fe Housing More Affordable?

Miranda Archuleta, Author

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Housing in Santa Fe is considerably more expensive than other New Mexico cities. As a result, many people are unable to settle in Santa Fe as it is simply too expensive. The city then stagnates because without urbanization, little development can happen.

The Santa Fe Home Builders Association is working toward changing this situation. They’ve proposed a plan to support a bond that would raise $2.5 million every year to create more affordable housing and rental-unit housing. The association’s proposition for the bond might be a part of the March municipal election ballot if endorsed by the City Council.

If it were to be endorsed and put into effect, this bond would be paid for through bonds supported by property taxes. The tax increase would amount to a few extra dollars a month for property owners.

The Santa Fe Home Builders Association hopes that, if supported by the community, this tax would allow more affordable housing to be developed in Santa Fe, thus allowing the city to become more diverse and dynamic, instead of stagnant.

Currently affordable housing in Santa Fe is handled under the Consolidated Plan, a five-year plan that analyzes the needs for housing in the community and allots funding to meet goals. These projects are then re-evaluated through CAPER, the Consolidated Annual Performance Evaluation Report. This draft document is prepared for the NM Mortgage Finance Authority to ensure the city’s compliance with the NM Affordable Housing Act.

The plan contains a housing needs analysis, land use review, and recommendations for increasing access to affordable housing. However, the logistics of building the housing is left to the builders and is not determined by the city.

On Oct. 19, the Santa Fe Home Builders Association held a panel to discuss the ways that Albuquerque handled its issue of an apartment shortage and to propose a similar course of action to fix Santa Fe’s lack of affordable housing. Overall, the attendees were in support of the city’s general obligation bonds to create more affordable housing projects in Santa Fe.

However, they also concluded that if the tax were to make the ballot, Santa Fe residents would have to be educated on its implications to ensure that they would make an informed decision whether to support the tax or not.

But not everyone agrees with the new tax. Paul J. Gessing writes in The Santa Fe New Mexican that creating more affordable housing in Santa Fe would be beneficial but argues that taxation alone will not fix the the problem.

Gessing identifies land use and zoning regulations as the main cause of high housing costs, specifically zoning ordinances that limit density, arguing that these regulations permit only a small number of people to receive the economic benefits of living in certan areas, which limits diversity and mobility.

He also argues that residents who oppose proposals for new developments to be built near them — the not-in-my-back-yard mentality better known as “NIMBY” — also reduces the possibility of constructing affordable housing. He writes, “No tax-and-spend transfer scheme is going to paper over the fact that if special interests oppose them, new apartments and rental units will just not be available.”

On the other hand, Kim Shannon, executive officer of the Santa Fe Area Home Builders Association, believes that the tax is a great idea and could prove to be benefical to Santa Fe. He stated, “Asking the community to contribute to an affordable housing trust fund is not a radical idea. Albuquerque citizens have voted to tax themselves to support their affordable housing trust fund for over a decade. It has been supported by both their conservative Chamber of Commerce and former Republican mayor Raymond Barry.

“The money does not relieve builders and developers from providing affordable housing,” Shanahan continued. “It simply helps projects get over financing hurdles.”

One Santa Fe High student has experienced the issue of unaffordable housing firsthand. Living with their grandparents and stuck with an abusive father, the family is unable to leave the situation because it is simply too expensive for them to move into their own place. The student stated, “It is impossible to live here [Santa Fe] if you are not rich.” One apartment they had looked into cost $1,600 without utilities or additional pet fees, a price that was simply not possible for them to pay.

Although it may not be readily apparent, these issues affect many people at Santa Fe High. For example, the food and clothing bank reflects the larger issue of the high cost of living for both students and staff. Some students here have been evicted from their homes, they have to commute long distances, and some have no home at all. Some are forced to live in shelters or with relatives.

It is difficult to imagine how Santa Fe would not benefit from more affordable housing. Many people leave Santa Fe due to the high cost of living and others commute to avoid these issues. Many who work in Santa Fe commute every day from Albuquerque or Rio Rancho because they find Santa Fe’s rent and house prices to be too high. Approximately 51 percent of the workforce in Santa Fe commute from other areas, according to a 2014 report by the state Department of Workforce Solutions.

This also poses a problem for young adults as many don’t have the means to support themselves in a city where the lowest rent for a one-bedroom apartment is approximately $675. If a person works 40 hours a week at Santa Fe’s minimum wage ($11.09 per hour), rent would claim 38 percent of their monthly gross income; after taxes it would be closer to 45 percent. For a person working part-time, rent would account for a much higher percentage of their paycheck. Taking into account that a young adult might also be attending school and paying tuition and fees, living in this city becomes impractical at best and impossible at worst.

 

Ask any Santa Fe resident about how Santa Fe has changed through the decades and they will tell you how it went from a small, prodominately Spanish town to a larger retiree town. Homes downtown and on the east side that used to be owned by local families are now owned by people from other areas due to the increasing cost of living in the city. Often only wealthy transplants can afford these homes, leaving most middle- or lower-class Santa Fe families to live elsewhere — namely on the other side of town.

 

For these reasons, Santa Fe remains primitive in terms of its urbanization. The city doesn’t have much to offer in terms of opportunity as it is too small for many small businesses to thrive in. Also, many major corporations refrain from bringing new businesses here as there are simply not enough people for a customer base. Reducing housing costs in Santa Fe could help increase the population, which could also increase urbanization, which would bring more jobs and more opportunity to the city.

 

However, it is probable that even if this tax increase were implemented, the construction of affordable housing would be halted by other factors.

 

Consider last year’s proposed soda tax which, if approved, would have added a two-cent-per-ounce tax on sweetened drinks that would have supported free preschool for all children in Santa Fe. It was defeated in the polls.

 

If the Santa Fe Area Homeowners Association tax were to gain support from the City Council and get the initiative onto the March municipal ballot, who’s to say that the same thing wouldn’t occur? If education wasn’t important enough to the residents of Santa Fe, would affordable housing be important enough?

 

 

 

 

 

 

 

 

 

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Will a Tax Increase Make Santa Fe Housing More Affordable?