The debate is becoming more common at Rio Rancho Governing Body meetings: Is it good to rezone undeveloped residential land to create smaller lots?
With a booming housing market and a demand for smaller lots, developers have been asking city government for land-use zoning changes to allow creation of neighborhoods with more homes on lots smaller than originally designed. Nearby residents with larger lots have expressed concerns about how that move could affect their property values and lives.
In the 1960s and ’70s, developer AMREP zoned 90,000 acres into more than 85,000 residential lots, said City Councilor Bob Tyler in an email.
Most of that land was what the city now calls R-1, requiring lots of at least 7,000 square feet and 60-foot widths.
In the last 20 years, said Homebuilders Association of Central New Mexico Executive Vice President John Garcia, Rio Rancho officials decided to re-engineer the city to accommodate economic development and attract jobs. It’s the fastest-growing city in the state, he said.
The housing market
“We’re in a very hot market right now,” Garcia said.
He expects the housing demand to stay strong through 2021. Builders “can only sell what buyers want,” he said.
Developers have requested a number of zone changes to R-4, which mandates lots of at least 4,000 square feet and 40-foot widths. They sometimes ask for changes to R-2, lots at least 5,000 square feet and 50-foot widths.
“I don’t see this as unusual,” Garcia said of the shift to development of medium-density housing.
He said Millennials are moving to more suburban areas like Rio Rancho and have less money for houses than Baby Boomers do. Plus, he said the price of land has increased sharply in the last two years.
He hadn’t heard of problems arising with more medium-density housing and believes Rio Rancho has a good mix of lot sizes.
In 2020, Mayor Gregg Hull said, 62 percent of Rio Rancho residential development happened in R-2 or R-4 zoning. About 70 percent of R-4 homes built were on lots 45-55 feet wide, bigger than required.
Hull said 19 percent of 2020 housing development in Rio Rancho was in R-1 or E-1 zoning. E-1, estate zoning, requires a minimum lot area of 21,780 square feet.
Rio Rancho still has almost 31,600 vacant, unplatted R-1 lots, he said.
Hull said houses on smaller lots are necessary affordable starter homes for young professionals and service-industry workers. They also attract retirees who don’t want to maintain large lots.
“If Rio Rancho is to be an inclusive community, we have to make available housing for the youngest families to retirees on fixed incomes and everyone in between, because they’re all looking for a high quality of life,” Hull said.
Tyler has voted against rezoning R-1 land to R-4 at times, but he said he doesn’t oppose R-4 zoning in the right place.
“We need to ensure that as Rio Rancho grows, we can continue to provide the services that folks have come to enjoy and expect from the city,” he said in an email. “I do believe that there is a balanced approach to the residential development and we all have to be willing to work together to reach a compromise.”
Will medium-density housing lead to lower property values for existing homes on larger lots?
“No, I don’t believe so,” said Realtor Matt DeAveiro of Coldwell Banker Legacy, who has worked in real estate for 28 years, often in subdivisions, and lived in Rio Rancho for 40 years.
He said lot size has minimal or no effect.
“The real question you want to ask is, ‘What price range are the homes going in on the smaller lots?’” he said.
As long as the prices are close to those of existing homes on larger lots, he continued, values of existing homes will be OK.
Lot size doesn’t necessarily determine the value of the house. For example, manufactured homes are allowed on R-1 property, and other residential designations, in Rio Rancho.
Also, Hull said half-million-dollar houses and gated communities have been built on R-4 lots.
County Assessor Linda Gallegos said county appraisers don’t consider adjacent property when determining taxable value. Also, instead of pinpointing the value of individual homes, they determine the worth of types of houses in mass appraisals.
Will medium-density housing overcrowd schools?
Rio Rancho Public Schools Superintendent Sue Cleveland said in an email that everyone shares a goal of achieving a growing, thriving community.
“Residential development can certainly lead to additional students, increased enrollment in our schools and the need for additional school buildings, since most of our facilities are at or above capacity,” she continued. “There needs to be coordinated planning and communication with the city, school district and developers to ensure that growth is managed efficiently.”
Cleveland said Rio Ranchoans have a strong history of supporting bonds for new schools.
“We appreciate the ongoing support and commitment that enables RRPS to provide the type of educational experience and facilities that will continue to attract new families to Rio Rancho,” she said.
The State of New Mexico gives school districts per-student funding for operating expenses each year.
Will higher-density housing overtax city services?
The City of Rio Rancho’s comprehensive plan says higher-density housing is necessary for transit opportunities, walkable neighborhoods and complete streets.
With higher-density housing, Hull said, the cost of infrastructure such as roads and water pipes is divided among more households, bringing down the per-family cost.
Although it wasn’t the case when Rio Rancho began, developers are now mandated to install certain infrastructure before turning maintenance of a neighborhood over to the city. Developers and homebuilders typically include infrastructure costs in prices of lots and new homes, Hull said.
He said the city issued more than 900 new home permits last year, so growth will happen, creating the need to grow services.
“We’ve done it successfully up to this point, and I don’t see why we wouldn’t do it successfully moving into the future,” he said.