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Oct 27, 2017

As Affordable Housing Challenge in Santa Fe Grows, Industry Officials Seek Solutions

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For those who live in New Mexico’s capitol city, it’s a stubbornly persistent question: what can be done to increase the affordable housing stock in a part of the state where the average price of a home is more than $300,000? 

“There are some affordable housing projects in the pipeline here, and a lot of good intentions,” says Kim Shanahan. “But there is still not enough to completely fill the void.”

Estimates vary regarding the exact number of new units needed to close the shortfall, with some reports saying that around 3,000 new units are needed and others saying it’s more like 7,000.

But Shanahan, who is the executive director of the Santa Fe Area Homebuilders, says talk centered on those estimates tends to obscure how to solve the problem.

“In the last 20 years, the programs that we have had in Santa Fe have been primarily focused on home ownership, trying to create affordable home programs that were focused on ownership,” says Shanahan.

“We also had some low income housing tax credits that came along,” he adds.

“But,” Shanahan continues, “there has never been enough to really fill the need that we have.”

All of that could change if a movement to create an affordable housing trust fund that would be financed through general obligation bonds becomes reality.

That fund would in many ways be modeled on a similar effort approved by Albuquerque voters in 2007 which ended up seeing $30 million in bonded funds leveraged to eventually finance some $230 million in projects.

The push for a proactive solution to Santa Fe’s affordable housing challenge has been joined not only by the Santa Fe Area Homebuilders, but the Santa Fe Chamber of Commerce, as well as the Santa Fe Association of Realtors.

“This is an issue whose time has come,” said the Santa Fe New Mexican in an editorial earlier this month lauding the idea of an affordable housing trust fund, adding its praise for an initiative that is uniquely coming from the private sector.

A different approach to the issue in Santa Fe has come through the Housing Trust, which was established in 1992 and has to date spearheaded the development of over 800 homes, the vast majority of which are single-family.

“The market in Santa Fe remains very tight,” observes Zach Thomas, land use and development director for the Trust. “The vacancy rate in multi-families is almost zero.”

The Trust is currently developing the 87-unit Soleras Station inside the larger Las Soleras subdivision east of Cerrillos Road.

The project, which will include six 3-story buildings and five 2-story buildings, as well as a community building, is expected to see construction start early next year with a likely December 2018 completion date.

Like all of the Trust’s projects, Soleras Station has come about painstakingly and after years of planning and thinking.

“So much of this sort of thing is a matter of getting the tax credits, which means the process usually starts a year before any work on the site can actually begin,” says Thompson.

“That means you are working on the tax incentive part and submitting it, and then the project has to work its way through to the Mortgage Finance Authority, and depending on if you get an award, you can proceed to the next step.”

“The tax credits,” Thompson adds, “are highly competitive. And you are competing against other equally good projects.”

Despite such challenges, the Housing Trust has become an affordable housing engine in Santa Fe, with officials with the group constantly coming up with new approaches to the problem.

This summer, working with the Santa Fe Association of Realtors and the Santa Fe County Housing Authority, the Trust announced a program making it easier for homeless veterans in Santa Fe to buy their own homes.

The Santa Fe Area Homes for Vets Program, among other things, walks veterans through the Veterans Administration loan process, and provides money for closing costs, inspections, and title work.

Such efforts, say housing experts, show that innovative policymaking can confront the challenge from many directions.

But many of those experts say the creation of a permanent affordable housing trust fund, as has been seen in other cities across the country, could prove the most encompassing.

Noting a growing consensus in Santa Fe in favor of that approach, Shanahan remarks: “The fact that we are talking about these ideas is the first step to recognizing that a problem exists and trying to figure out ways to get in front of it. That, at the least, is a good start.”

 

 

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