New Mexico has a shortage of affordable housing.
You know it, I know it and your co-worker who’s looking for a new apartment certainly knows it.
But it’s still helpful to have data that shows the scope of the problem, and a recent report commissioned by a new coalition of housing experts helps shed some new light on the issue.
The long and short of it? New Mexico is 32,000 units short of what it needs to house its poorest residents, due to supply issues up and down the housing spectrum.
“I think a lot of people don’t understand how connective the housing spectrum is,” said Rebecca Velarde, senior director of policy and planning for the New Mexico Mortgage Finance Authority.
Velarde said the MFA is spearheading the newly formed Housing New Mexico Advisory Committee, a collection of organizations doing work across the housing spectrum in New Mexico, from home builders to groups working to combat homelessness. Velarde described the coalition as a renewed effort to get a diverse set of people who are all working to address problems within New Mexico’s housing ecosystem all singing off the same hymn sheet.
“There’s a huge group of people who are all trying to solve the problem, but are not coordinating as well as they should,” Velarde said.
Velarde said the report, assembled for internal use by the committee but shared with the Journal by a member, was a first step toward determining how big New Mexico’s issues with affordable housing actually are, and thus how much money they will take to solve.
The short answer: quite a bit.
Among the report’s findings are that New Mexico has a statewide shortage of 32,000 units that are affordable to the poorest New Mexicans, as defined as those making less than 30 percent of area median income. Statewide, 218,471 households are considered “cost burdened,” following the federal definition of spending more than 30 percent of their income on housing costs. Of those, 100,858 are considered severely cost-burdened, meaning they spend more than half of their income on housing.
In broad strokes, the report shows that New Mexico, which added 48,800 renting households between 2000 and 2019, did not add enough units at affordable price points during that same period. Velarde noted that the problem has gotten worse in the past decade, when building decreased significantly coming out of the Great Recession.
“The supply has not kept with household formation for many years, and that’s creating a supply problem,” she said.
The report notes that one of the big issues is that the state’s available rental units are largely concentrated in the $625 to $1,250 per month range, much of which is unaffordable to many poor New Mexicans. The problem is exacerbated by a lack of supply at higher income levels, which prompts higher-income New Mexicans to “rent down,” competing for housing at lower price points.
“If we provided more units at all the price points, it would probably have the effect of (freeing up) some of the affordable housing units for some of the lowest-income New Mexicans,” Velarde said.
Of course, doing so would be very expensive for the state. Velarde estimated that building enough affordable units to meet the needs of currently underserved populations would cost more than $1 billion between now and 2025.
Given that expense, Velarde said it makes sense to take a coalition-based approach. Hank Hughes, executive director of the New Mexico Coalition to End Homelessness, one of the stakeholders in the Housing New Mexico committee, said he believes that New Mexico lawmakers are coming around to the idea that housing is a statewide issue, and the committee can play a role in spearheading that change.
“New Mexico’s state government has never really addressed housing head-on,” Hughes said.
Velarde said the report is just a starting point, and the committee will continue to meet and conduct focus groups and stakeholder interviews about housing in New Mexico over the coming months. The plan is to complete a statewide housing strategy over the summer that could guide policy going forward.
In the meantime, the MFA is supporting a couple of bills being considered during the 2022 legislative session, including Senate Bill 134, which would create recurring funding for the New Mexico Housing Trust Fund using severance tax bonding capacity. Velarde said the proposal could produce between $15 million and $20 million annually to help the state make headway on affordable housing.
“It would really go a long way toward allowing us to start tackling the problem,” she said.
(Stephen Hamway covers economic development for the Journal. He can be reached at email@example.com.)