In Santa Fe, Housing Developers Contend With Affordability Crisis

The median home price in Santa Fe, New Mexico, hit a record $370,000 last year, according to the Santa Fe Association of Realtors. The state is one of many places in the country facing a growing crisis of housing affordability.

There’s a number of factors why, according to Daniel Werwath, chief operating officer of New Mexico Inter-Faith Housing, a nonprofit affordable housing developer.

Supply and demand is at the affordability crisis’ core, he says. Santa Fe has failed to keep up with the city’s population growth, which he says is a “lingering effect” of the economic downturn of 2007 and 2008.

Another issue is the lack of rent-restricted housing for low-income residents, he says. Plus, developers are facing zoning problems.

“We've never had a more difficult time to build housing, especially affordable housing,” he says.

Werwath says restrictive zoning, large lot zoning and other “cumbersome regulatory processes” combined with costly construction expenses can add up quickly.

“We're really seeing the highest cost development environment in my 15 years of working on affordable housing development,” he says.

Santa Fe is in need of apartment buildings, he says, but the costs to build can be extraordinary. He says an $18 million 65-unit apartment complex and community center will break ground soon in the city. Each unit in the complex costs about $200,000.

“You just can't, in hard costs, produce housing at levels that are affordable for many working families,” he says, adding that 73% of families in Santa Fe earn less than $50,000 a year.

From Utah to Montana, midsize urban areas in the Mountain West are experiencing a housing affordability crisis. Werwath says there’s “no silver bullet” to solving the issue, but cities can begin to recognize the problem and step up to invest in affordable housing.

“The federal government only provides about a fifth of the resources needed to serve the families with the most limited means in our communities,” he says. “And so state and local governments really need to step up and meet that gap.”

He adds that local governments can also look to reform land-use and collaborate with the private sector to create affordable housing projects.

“I think a lot of the smartest policies right now are looking towards incentives to help bring the private sector into the below-market housing production realm,” he says. “The other piece is just having local governments lay the groundwork through really smart and progressive land-use policy.”

For Santa Fe, Werwath would like to see land-use policies reflect his “value-oriented city,” inclusionary values he says are not reflected in the government’s existing zoning policies.

Chris Bentley produced and edited this interview for broadcast with Tinku Ray. Serena McMahon adapted it for the web.