EDITOR’S NOTE: On May 22, the Legislative Finance Committee (LFC) held one of its regularly scheduled meetings. A report on the state’s homeless and the affordable housing shortage was delivered to the committee for review and discussion. The report included the preliminary estimates yet to be finalized 2023 Point In Time (PIT) annual homeless count. It’s expected the final report will be released in August. This is the second of two separate reports on the LFC’s Report on Homelessness and Affordable Housing. The link to first article can be found in the postscript.
This blog article provides a report on the Governor’s appointment of a Housing Investment Council in response to the shortage of affordable housing with Commentary and Analysis. It is also an in-depth analysis of the state’s affordable housing shortage, its causes, solutions and what is being spent to address the issue.
GOV. MICHELLE LUJAN GRISHAM CREATS HOUSING INVESTMENT COUNCIL
On May 23, and in response to the shortage of affordable housing in New Mexico Governor Michelle Lujan Grisham created by executive order a Housing and Community Revitalization Investment Council and appointed 11 members to serve. The executive order signed by the governor directs the council to create a Statewide Investment Plan by no later than January 15, 2024.
In her executive order, the Governor proclaimed in part as follows:
“New Mexico does not have enough affordable housing to meet the need, which is driving up rates of homeless. Reports show a need for 15,500 affordable units to house the number of people living at 30% or below the local median income and a shortage of 3,000 vouchers for permanent supportive housing and rapid rehousing.
Rapid costs of rents and mortgages are increasing the number of homeless in New Mexico, and the cost of homelessness is great and inextricably link with the costs of health care and other supportive services in our State.
There are large homeownership disparities among Black/African Amercan and Indigenous households, reaching greater rates than existed when the Fair Housing Act was put into place and we see these disparities reflected in rates of homelessness among minorities.
Development of housing in New Mexico is slowed down by barriers in zoning, inefficiencies in inspections and permitting, workforce shortages, and lack of public resources,
Local governments and tribes have limited resources and capacity to boost community revitalization without supplemental assistance from state resources.”
According to the Governors Executive Order, the Statewide Investment Plan is to provide recommendations to address the following identified areas:
- Gaps in available housing resources
- Priority focus areas for meeting the State’s housing shortages
- Inefficiencies in regulatory and zoning that impact housing development and zoning that impact housing development
- Investments in housing development
- Guidelines and standards for homeless services
- Investments and programs to improve disparities in home ownership
- Creation and facilitation private partnerships to address housing
- Lack of infrastructure related to housing,
- Lack of creative housing options that move from assistance to ownership’
- Service programs to address housing stability.
- Workforce and business shortages in the housing development industries
- The facilitation of public-private partnerships.
The members of the council appointed by Governor Lujan Grisham are:
Brian Egolf, Former House Speaker, Chair Senator
Michael Padilla Representative
Meredith Dixon Lorrie Chavez, CEO Santo Domingo Housing Authority
Kent Thurston, CEO KT Homes LLC
Natalie Green, City of Las Cruces
Rachel Biggs, Strategic Albuquerque Healthcare for the Homeless
Gary Housepian, Executive Director Disability Rights New Mexico
Randy Traynor, Randy Traynor Associates
Daniel Werwath, Executive Director New Mexico Interfaith Housing
Laura Long, Jorgensen Builders
According to the Executive Order, members of the council shall not be compensated for their services.
The link to review the executive order is here:
https://drive.google.com/file/d/1pxGnNO5ElsTM-DgpUg95viihV46rXzoH/view
Lujan Grisham said in a statement.
“I think this could be the most important work we do in the next couple of years … It is time to go big on affordable housing. We need thousands of homes to meet demand and give New Mexicans a stable foundation … We secured more than $82 million in the last legislative session to address housing, and an investment plan is the next step in ensuring we make the most of every housing dollar in our state.”
Former House Speaker Brian Egolf of Santa Fe, who was appointed chairman of the Housing and Community Revitalization Council Investment said he believes local governments should have a lesser say on permitting for new housing developments. He noted several proposed projects in Santa Fe where he lives were recently stymied amid neighborhood opposition. Egolf also said a greater state involvement in housing issues, perhaps by issuing loans or other incentives to developers, could bolster New Mexico’s affordable housing supply. Egolf said this:
“I think there are opportunities to shift some of that risk off the private sector onto the government. … I think there are opportunities to shift some of that risk off the private sector onto the government.”
https://www.governor.state.nm.us/2023/05/23/governor-signs-executive-order-creating-affordable-housing-investment-council/
CAUSE OF HOUSING SHORTAGE
The housing shortage is related to economics, market cost of home, the development community’s inability to keep up with supply and demand and the public’s inability to purchase housing or qualify for housing mortgage loans.
In April 2023, the median listing home price in was $375,000, trending up 13.6% year-over-year. The median listing home price per square foot was $200. The median home sold price was $349,500.000.
https://www.realtor.com/realestateandhomes-search/Albuquerque_NM/overview
Home Builder Digest is a national online magazine dedicated to the residential housing industry. According to Homebuilders Digest, the United States market rate to build is at $207 per square foot. Home builders serving the Albuquerque area estimate the cost to build in Albuquerque between $175 to $275 per square foot. A value-based custom home would start around $175 per square foot. A mid-range home would start at around $225 per square foot. A high-end custom home would start at around $275 per square foot.
https://www.homebuilderdigest.com/cost-guide/new-mexico-cost-guides/how-much-does-it-cost-to-build-a-house-in-albuquerque/
COMMENTARY AND ANALYSIS
In response to the spike in the number of homeless in the state and the unavailability of low-income housing, Governor Michelle Lujan Grisham has now created an all-volunteer Housing and Community Revitalization Investment Council. The Governor’s Executive Order creating the Housing and Community Revitalization Investment Council states in part:
“There are large homeownership disparities among Black/African Amercan and Indigenous households, reaching greater rates than existed when the Fair Housing Act was put into place and we see these disparities reflected in rates of homelessness among minorities.”
Despite her proclamation, there are no appointed representatives of either the “Black/African Amercan and Indigenous” communities on her Housing and Community Revitalization Investment Council. This is called politics over inclusion.
The council includes legislators, homebuilders and nonprofit leaders and homeless advocates who will be tasked with coming up with recommendations on how to spend the appropriated housing funds and other initiatives that could be proposed during next year’s 30-day legislative session. It’s makeup and charge is very disappointing and seriously lacking in expertise and has representation from organizations that will have their hands out for state funding.
The Housing and Community Revitalization Investment Council is what is called by politicos as “Government by Committee”. It looks good, sounds good and designed for the publicity but has very little authority and will likely accomplish very little other than a sound bites and produce a report that very few will likely read or rely upon. What is troubling about it is to what extent the appointed members already have pre conceived thoughts and a politcal agenda already set out for them and each lack a degree of knowledge to deal with both the housing shortage and the homeless crisis.
Complicating the creation of the commission is that a final Statewide Housing Investment Plan must be produced by January 15, 2024. The 12 areas identified in the Governor’s Executive Order that must be included in the Statewide Investment Plan are so broad, so complicated and so interwoven with each other to the point that a mere 8 months in no way should be considered enough time for an all-volunteer commission.
Many of the areas, such as investments in housing development, investments and programs to improve disparities in home ownership, service programs to address housing stability and lack of creative housing options that move from assistance to ownership, are all areas that have confounded the experts for decades and require exceptional expertise. Most if not all of the appointees lack the background and expertise in both the areas of residential development and investment and the homeless. There are no experts from the banking, investment and real estate development community on the appointed commission, let alone from affected “Black/African Amercan and Indigenous households” that have “greater rates … of homelessness among minorities.”
Of particular complexity the Governor wants the council to tackle is “inefficiencies in regulatory and zoning that impact housing development.” Simply put, zoning and development laws are highly complex and are within the authority of ever county commission and municipal government and not the New Mexico legislature. There are 33 counties and 106 municipalities consisting of cities, towns, villages in New Mexico with each having their own zoning laws to address the particular needs of their individual communities.
Former Speaker of the House, the appointed chair of the council, revealed his biasness when he said he believes local governments should have a lesser say on permitting for new housing developments. In other words, he wants developers to have a much bigger say over land use issues as opposed the needs of the community and property owners. There are no appointees that have been identified as experts in land use and planning issues and no representation for the Municipal League nor county governments.
All the 11 members of the Housing and Community Revitalization Investment Council most likely have their own personal biasness, political agendas and concerns they are advocating for and want themselves or what the Governor wants. The Governor could have done much better and relied upon the real experts within her administration and the experts with the Legislative Finance Committee to come up with a viable Statewide Investment Plan for affordable housing in the state.
The Governor’s 11 member Housing and Community Revitalization Investment Council is simply not needed. The May 23, 2023 LFC Report on Homelessness and Affordable Housing already provides the necessary template for experts within her administration and the experts with the Legislative Finance Committee to come up with a viable Statewide Investment Plan for affordable housing in the state.
Instead Governor Michelle Lujan Grisham punts, appoints 3 politicians (former Speaker Egolf, Senator Michael Padilla, Representative Meredith Dixon) and representatives from vested stakeholders that will want state funding for their programs, such as Santo Domingo Housing Authority, Albuquerque Healthcare for the Homeless, the New Mexico Interfaith Housing and the City of Las Cruces.
What Governor Lujan Grisham has done is to create just another commission for “Government by Committee” that looks good, sounds good and designed for the publicity and that will likely produce a final report within 8 months with little new information and to hold another meaningless press conference.
NEW MEXICO’S AFFORDABLE HOUSING CRISIS: CAUSES, SOLUTIONS AND WHAT THE STATE IS DOING TO SOLVE IT
On May 22, the Legislative Finance Committee (LFC) held one of its regularly scheduled meetings. A report on homelessness and affordable housing was delivered to the committee. It was reported that rent statewide has increased by 70%, while wages have only grown by 15%. As a result, nearly half of all renters are cost-burdened and pay more than 30% of their incomes for housing.
Amy Whitfield, the governor’s housing and homelessness adviser, said New Mexico’s current lack of affordable housing compromises economic development efforts in the state and forces some state residents to commute long distances to work. She said the administration’s efforts would focus on home ownership and not rentals and will be targeted at housing stability for state residents.
During the LFC hearing, Santa Fe Democrat Tara Lujan cited the issue of gentrification in the state’s most expensive city, which prompted legislation aimed at minimizing annual property tax increases for homeowners. Lujan said this:
“I can’t afford to buy a house in my own district in Santa Fe.”
Mosquero Republican State Representative Jack Chatfield expressed concern over the lack of coordination of resources saying the large number of federal, state and local agencies involved with administering housing programs and it makes it difficult to effectively provide services. Chatfield said this:
“I think as a state we need to take better control of coordination of these resources to make sure we’re getting them out there.”
Senator Siah Correa Hemphill, D-Silver City, asked if the proliferation of vacation rentals in some New Mexico cities and towns is contributing to the affordable housing shortage. Siah said this:
“As soon as a house comes on the market, someone from California will come and buy it and convert it into a vacation rental.”
In response, state housing officials said the issue does appear to be contributing to the state’s housing problem, but is not the sole factor.
Links to quoted news sources are here:
https://drive.google.com/file/d/1gXYy4y9ILSImXApZh__ZZfcs4xhTk-kh/view
https://www.sfreporter.com/news/morningword/2023/05/24/homelessness-rises-48-in-new-mexico/
https://www.abqjournal.com/2601214/homeless-surge-new-mexico-affordable-housing-tough-to-find.html
LFC REPORT ON HOMELESSNESS AND AFFORDABLE HOUSING
The 4 key take aways of the LFC report on affordable housing are:
- Since 2017, rent in New Mexico has increased by 70%, while wages have grown by 15%.
- Almost half of all renters are cost-burdened, paying more than 30% of their income for housing.
- According to the U.S. Department of Housing and Urban Development standards, virtually all renters with household incomes under $20,000 are cost-burdened.
- New Mexico stands to lose 5% of its 29,000 publicly assisted rental units over the next 5 years and double that in 10 years as affordability commitments expire or the condition of units deteriorates.
The major highlights that can be gleaned from review of the report relating to the affordable housing shortage in New Mexico are quoted as follows:
LOW-INCOME RENTERS HAVE BEEN MOST IMPACTED BY RISING RENTS AND FACE THE MOST ACUTE HOUSING SHORTAGES.
“In New Mexico, about 30% of households are renters. Those households tend to have lower median household incomes than those that own homes ($35,289 for renter households and $65,720 for owner-occupied households). Since 2017, New Mexico household income grew by 15% while rents and home values grew by 70% and 66% over the same period.”
“In many places in the state, the income needed to pay for the fair-market rent for a small apartment is higher than the median renter’s income … . HUD establishes annual fair-market rents to set limits for federally funded rental subsidies. Fair-market rent is based on the 40th percentile of gross rents for non-substandard rental units occupied by recent movers in a local housing market. However, actual average rents in a locality may vary substantially from these values. For example, Zillow’s recorded average rent for a two-bedroom apartment in Las Cruces, Albuquerque, and Santa Fe in May 2023 are higher than HUD’s fair-market rent for these cities ($1,334, $1,223, and$2,015, respectively).”
“The New Mexico Housing Strategy report estimates New Mexico has 32,000 too few affordable rental units to meet the needs of low-income renters (those with incomes of 30% of the area median income or less.) 78% percent of that gap is in four counties: Bernalillo (17,748 units), Doña Ana (4,146 units), Santa Fe (1,630 units), and Sandoval (1,299 units).
Even though declining birth rates are projected to continue to flatten statewide growth overall by 2035, regionally, these urban counties are projected to grow faster, while the more rural counties will have offsetting population losses.”
NEW MEXICO HAS A SHORTAGE OF AFFORDABLE HOUSING AVAILABLE FOR LOW-INCOME HOUSEHOLDS, AND MODERATE-INCOME FAMILIES ARE TAKING UP HOUSING THAT COULD BE AFFORDABLE TO LOWER-INCOME FAMILIES
“In addition to an overall shortage of affordable housing units, a … dynamic is at play that crowds out low-income renters from affordable housing. They generally pay more than what is considered affordable for them for housing, while higher-income renters almost always pay less.
The New Mexico Housing Strategy used 2019 data to show that higher-income people were “renting down,” occupying housing units that would be affordable to lower-income households. At the time, nearly 21,000 housing units with rents affordable to those with household incomes between $35,000 and $50,000 were being rented to people with household incomes over $50,thousand.”
“Using updated 2021 data, a similar mismatch still existed between what renters should be able to pay for rent, and what they are paying for rent. Further, the New Mexico Housing Strategy report noted that, between 1970 and 1990, multi-family housing was a significant part of the mix of new residential buildings in the state. However, multi-family development dropped off in favor of single-family homes in the 1990s, and new building of all housing types decreased significantly around the recession of 2008 and has yet to return to the levels seen in prior decades. This drop in construction as indicated by the drop in building permits … has significantly constrained the supply of housing, particularly multi-family housing.”
IN FY22, NEW MEXICO SAW OVER $300 MILLION IN FEDERAL AND STATE FUNDING DEDICATED TO HOMELESSNESS SUPPORTS AND AFFORDABLE HOUSING.
“New Mexico’s housing system is fragmented, consisting of multiple public and private entities dominated by federal funders and local implementers. The state can play a role in prioritizing needs and filling funding gaps. The Legislature has made significant investments in homelessness and housing supports over the past 2 years. Thus, the state would benefit from increased transparency and reporting regarding performance of programs.”
“The federal government supplies the majority of that funding—$255 million. This funding flows through numerous federal, state, and local government agencies and private entities … . These entities all serve different functions, including funding, services, coordination, and oversight. The U.S. Department of Housing and Urban Development (HUD) and the U.S. Authority (MFA), the state’s housing agency, other state agencies, local and regional housing authorities, and other local entities administer the federal programs. These include the low-income housing tax credits (LIHTC), the housing choice voucher program (formerly known as Section 8), public housing, emergency solutions grants for homeless shelters and other supports, and the community development block grant for local governments. Department of Agriculture (USDA) fund the New Mexico Mortgage Finance.”
THE FEDERAL GOVERNMENT REMAINS THE LARGEST SOURCE OF FUNDS FOR HOMELESSNESS AND AFFORDABLE HOUSING PROGRAMS IN NEW MEXICO
“In FY22, HUD provided over $90 million for housing choice and project-based rental assistance vouchers alone, and local entities administer the funding with mixed result . The USDA also administers several rural-focused housing assistance and development programs. In FY21, the most recent year available, USDA provided $28.4 million for rental housing development and assistance in rural New Mexico. Other federal programs, like HOME and the community development block grant, also provide significant funding for affordable housing.”
“Federal programs rely on state and local entities to administer federal funding. However, overlapping funding is a potential issue, and underutilized funding— for example, rental assistance vouchers and tax credits— could be better leveraged. State funds often fill gaps where federal funding has fallen short of need. For example, the state’s Linkages permanent supportive housing program is for people with severe mental illnesses, complementing HUD- funded permanent supportive housing grants administered by the New Mexico Coalition to End Homelessness (NMCEH) and the city of Albuquerque (the state’s two HUD-defined continuum of care organizations).”
“In another example, MFA administers the state’s housing trust fund, mainly used to provide additional low-interest financing for low-income housing tax credit (LIHTC) projects. … LFC staff did not have access to local funding amounts for 2022. However, the New Mexico Housing Strategy report estimated that in 2021, all public sources of funding for rental assistance and production totaled $219 million. Of that amount, less than 2%, $4.6 million in federal funding went directly to Albuquerque, Santa Fe, Farmington, and Las Cruces for affordable rental supports. Albuquerque and Santa Fe allocated $25 million and $1.5 million respectively in local funds to rentership, accounting for 12% of total public funds.”
“This mix of federal, state, and local funding, and administration of affordable housing and homelessness response, has resulted in good outputs in some areas, such as ensuring emergency shelter capacity. However, performance in other areas, such as housing choice vouchers and coordination of resources for housing preservation, could be improved.”
LOCAL HOUSING AUTHORITIES COULD PROVIDE RENTAL ASSISTANCE TO AN ADDITIONAL 2,381 LOW-INCOME HOUSEHOLDS WITH EXISTING FEDERAL FUNDING
“Federal housing choice vouchers (formerly known as Section 8) are the primary form of rental assistance in New Mexico and the nation and ideally provide housing security and mobility for low-income households. Fifteen of the state’s 26 public housing authorities administer the voucher program, which provides rental assistance to over 11,000 of the state’s lowest-income renters. However, almost one in five of these federal vouchers in New Mexico goes unused. As of December 2022, HUD reported housing authorities in New Mexico had enough budget to fund an additional 2,381 vouchers, mostly in Albuquerque, which has the largest housing authority in the state and has the most unused vouchers.”
“Reasons for voucher underutilization include a lack of landlords willing to accept vouchers and lack of units that meet HUD’s standards of fair market rent and health and safety standards. Given the low rental vacancy rates statewide, finding any units, let alone units meeting HUD’s requirements, can be difficult. Further, the large number of public housing agencies (26) that administer vouchers and restrictive service territories also potentially limit the ability of voucher holders to find housing where they want to live due to cumbersome portability processes and a lack of coordinated outreach and intake services.”
“While the housing choice voucher program is federally funded and locally administered, the state could be more active in ensuring better use of the large and existing resources. For example, both Albuquerque and Bernalillo County passed “source of income” protection ordinances in mid-2022, which bar property owners from discriminating against potential tenants with vouchers.”
“If these ordinances prove to be enforceable and improve voucher utilization in those areas, the state may want to consider a statewide source-of-income protection law. In concurrence with prior research, a 2018 HUD study found the presence of voucher nondiscrimination laws appear to be associated with reductions in the share of landlords that refuse vouchers. The study found 35% percent of landlords rejected vouchers in areas with nondiscrimination laws, compared with 77% of landlords in areas without such laws. According to the Center on Budget and Policy Priorities, at least 11 states, and over 50 cities and counties, have enacted such laws.”
THE STATE HAS A ROBUST AFFORDABILITY TOOL KIT THAT CAN BE LEVERAGED TO PROMOTE PRODUCTION AND REHABILITATION TO MEET HOUSING SHORTFALLS
“Although much of the administration of the $300 million in funding for homelessness and housing support is the responsibility of local entities, state entities can play an important role. For example, MFA could consider ways to leverage underutilized resources to fill existing gaps in funding for rehabilitation and conversion projects. One way to accomplish this would be to give preference in the annual qualified access plan (QAP) to HUD to rehabilitation projects and encourage the use of project-based vouchers, the 4% low income housing tax credit (LIHTC), the New Mexico affordable housing tax credit, and donations through the Affordable Housing Act (6-27-1 to 6-27-8 NMSA 1978).”
“The QAP sets the terms for LIHTC awards and presents opportunities for the state to make the development process more affordable and transparent by capping development costs, allow layering of subsidies, and prioritizing housing for high-risk populations. Strategies to find and promote the purchase of opportunities for housing could also be explored. For example, the Taxation and Revenue Department often emails the public about delinquent property tax auctions. Some of these properties might be good candidates for affordable housing development.”
“Federal LIHTC 4 and 9% tax credits encourage private investment in affordable rental construction and rehabilitation projects by providing a dollar-for-dollar reduction in federal income tax liability. The 9% LIHTC is the primary subsidy used for new construction because it is the most lucrative, allowing tax credits to be bought and sold. However, total funding is allocated to the state based on population; in New Mexico there were six projects in 2022, totaling $6.1 million for 282 units, or approximately $20 thousand per unit. The amount of 4% LIHTC credits is not limited, unlike the 9% percent tax credits, which are limited by the amount allocated to the state. The 4% tax credits are better suited to rehabilitation and purchase of existing housing, but must be paired with bonds.”
“MFA and TRD records indicate the state affordable housing tax credit is not being fully utilized by private developers or donors, but they and government entities could do more to market its use. The current tax credit ceiling is $5.1 million. In 2022, $500 thousand was awarded, about one-tenth of the allowable ceiling. Further, the expenditures for 2017-2021 show only $2.7 million claimed of the total eligible $8.7 million in contributions. MFA, which approves the projects, reports that 59 projects have supported 992 affordable units—365 single-family and 627 multi-family units. Taxpayers have five years to claim credits, transfer credits, or donate directly to the trust.”
“MFA could develop a plan to increase utilization of the state tax credit. The tax credits, which can be claimed alongside charitable donations, primarily benefit high-income individuals. In its affordable housing plan submitted to MFA, the town of Taos proposes to fund a marketing campaign to promote the value of the state tax credit. MFA could consider requiring reporting on performance from the 35 governmental entities participating in the Affordable Housing Act program. Currently, the agency only requires participating governments to report their donation amounts. According to MFA, the Affordable Housing Act (6-27-1 to 6-27-8 NMSA 1978) has facilitated approximately $17 million in total donations to affordable housing projects since 2018; donations totaled around $14 million in 2022 alone, potentially indicating an upturn in donations. Participating governments could potentially report on progress toward removing barriers associated with restrictive zoning and excessive impact fees, and increasing the supply of affordable units.”
THE STATE SHOULD PRIORITIZE THE $84 MILLION IN NEW FUNDING TO AREAS OF GREATEST NEED
The 2023 legislative session significantly expanded the resources available to the state for homelessness and affordable housing programs by $84 million. This funding should be targeted to areas of greatest need, but also to programs that prevent homelessness and increase the supply of affordable units, for example, eviction prevention, landlord support, and preservation and rehabilitation programs. The state’s enhanced investment would also benefit from guardrails to ensure that state money does not supplant federal and local funds.
A $20 MILLION GENERAL FUND APPROPRIATION FOR RENTAL ASSISTANCE AND OTHER HOUSING INITIATIVES IN THE 2023 SESSION COULD BE USED TO TARGET POPULATIONS OF RENTERS MOST IN NEED
In response to the winding down of the state’s federally funded pandemic emergency rental assistance program (ERAP), the Legislature provided a one-time appropriation of $20 million to the Department of Finance and Administration (DFA) for rental assistance and other housing initiatives for expenditure in FY23 and FY24 … . With ERAP, the average household in New Mexico received $2,439 in assistance to cover an average of two months of rent and utilities during the pandemic. Assuming this level going forward, the $20 million appropriation would be able to assist 8,200 households through the end of FY24. This is less than 10 percent of the cost-burdened renters in the state. As such, the executive could consider prioritizing the $20 million in state rental and housing assistance in a number of different ways based on needs and based on special populations.
THREE POTENTIAL OPTIONS IDENTIFIED FOR MOVING AHEAD
According to the LFC report, there are 3 potential options moving ahead. Those options are:
- TARGETING RENTAL ASSISTANCE FOR EVICTION PREVENTION.
In a 2019 report, the Center for Evidence-based Solutions to Homelessness noted that some eviction prevention programs, especially those that provided financial assistance, had strong evidence of preventing homelessness. Pre-pandemic, the levels of court filings for eviction and foreclosure cases remained relatively steady year over year, averaging about 18 thousand eviction cases (referred toas “landlord-tenant” cases by the Administrative Office of the Courts) and 3,300 foreclosure cases. However, the large amount of federal rental and mortgage assistance, coupled with a stay on eviction cases issued by the U.S. Centers for Disease Control and Prevention and the New Mexico Supreme Court between March 2020 and April 2022, meant case filings generally dropped by half in calendar years 2020 and 2021 and began rising again in 2022. However, unlike Oregon and Minnesota, New Mexico’s case filings have yet to return to pre-pandemic levels.
2. TARGETING RENTAL ASSISTANCE FOR ADDITIONAL FAMILY UNIFICATION.
HUD has a small set aside of housing choice vouchers for (1) families with children whose lack of adequate housing is a primary factor in those children either being placed in foster or other out-of-home care or is keeping a family with children in foster care from being reunified and (2) for children aging-out of the foster system. Called Family Unification Program (FUP) vouchers, New Mexico has 150 of these vouchers, and they are all located under either the Bernalillo County or Las Cruces public housing authorities. Since 2015, the Children, Youth and Families Department (CYFD) has also been appropriated $900 thousand of Temporary Assistance for Needy Families (TANF) funding for supportive housing similar to the FUP vouchers. Just like regular housing choice vouchers, these vouchers are permanent as long as the family or individual has a low-enough income to qualify for them and only become available to a new family if an existing family stops using them.
The 150 existing vouchers in the state are likely not enough to serve the needs of all families and children that would qualify for them. Federal data shows that in 2021, 182 child maltreatment victims had a parent with inadequate housing. Furthermore, according to the 2021 Kevin S. settlement report, CYFD placed 30 children in homeless shelters in December 2021 alone. Because these families and children are at heightened risk of new or continued homelessness, the state may want to consider if and how the housing and rental assistance funding could be used to provide housing to families and youth that are on the waiting list for an FUP voucher.
3. DEDICATING ADDITIONAL FUNDS TO THE EXPANDED LANDLORD SUPPORT PROGRAM IF IT SHOWS PROMISING OUTCOMES.
The success of the state Linkages and federal housing choice voucher program depends on the willingness of private landlords to accept the rental subsidies. Many landlords choose not to rent to housing subsidy participants because of the costs associated with inspections and meeting HUD or state housing standards, bias against low-income tenants, and an unwillingness to participate in subsidy-related bureaucracy.
To counter this, HUD recommends monetary incentives and reimbursements for landlords. Some state governments, including Maine and Washington, have successfully used these monetary incentives to encourage participation, mitigate perceived risk, and address delays in leasing and costs for repairs. In the 2023 session, the Legislature appropriated $2.5 million for such a comprehensive landlord support program, an amount that should be more than sufficient given the experience in other states… .
State and local governments can also help renters pay for move-in costs and utilities, as BHSD does with its Move-In program for special populations, and assist property owners with security deposits and maintenance and upgrades, as Maine does with its landlord incentive program.
NEW MEXICO HAS INCREASED THE RECURRING FUNDING FOR AFFORDABLE HOUSING THROUGH MORTGAGE FINANCE AUTHORITY
With the new severance tax bond (STB) money, in FY24 MFA will have about $74 million available in the New Mexico housing trust fund (NMHTF)13 to support affordable housing development—more than twice the amount in any given year prior. The fund has received over $61 million in legislative appropriations since 2005, about $25 million from federal pandemic funds. In addition to appropriations, the fund also earns interest on financed loans.
TRD economists estimate the STB earmark will provide approximately $40 million annually, available for expenditure beginning FY24. According to MFA staff, the STB money can be used generally for capital expenditures, including new rental and single-family development, rehabilitation, weatherization, and down payment assistance. MFA cannot use the money for non-capital expenses, including any services, rental assistance, eviction prevention, or rental vouchers. In the past, MFA awarded almost all NMHTF money as low-interest loans to finance housing development and rehabilitation.
MFA’s board has approved increased homeowner down-payment assistance by $5 million for a total of $8.5 million and dedicated $25 million over five years in funding for the rehabilitation and preservation of existing subsidized housing – both best practices recommended by the New Mexico Housing Strategy report. The authority could also consider how to use the NMHTF funds to support innovative affordable housing development such as motel conversions. Further, MFA could consider how new NMHTF recurring funding could be used to bring new units into the Linkages program with the severance tax bond portion of the NMHTF, or through programmatic incentives with the non-severance tax bond portion.
MFA is following best practices in dedicating new NMHTF funds for preservation and rehabilitation for funding. According to HUD, preservation typically costs only one-half to two-thirds as much as new construction. At its March 2023 meeting, the MFA board approved an allocation of $25 million of its new housing trust fund monies for a new fund dedicated to the preservation of at-risk affordable housing in rural and tribal areas.
MFA reported that 4,057 MFA-funded units are at risk of exiting affordability within the next five years. MFA estimated that about one-quarter of the owners of the at-risk units would take advantage of the funding and opportunity to rehabilitate and extend subsidized affordability restrictions. Staff estimated the program would cost $5 million a year for the next five years.
The link to review the entire quoted and unedited May 22 Legislative Finance Committee (LFC) Report on On Homelessness and Affordable Housing is here:
https://drive.google.com/file/d/1gXYy4y9ILSImXApZh__ZZfcs4xhTk-kh/view
NEW MEXICO MORTGAGE FINANCE AUTHORITY ANNOUNCES $53 Million For 5 AFFORDABLE HOUSING PROJECTS.
On May 30, the New Mexico Mortgage Finance Authority announced approval of $53 million for 5 affordable housing projects. The funding will come in the form of Low-Income Housing Tax Credits. The credits will fund the construction and rehabilitation of affordable housing across the state. The project will benefit a total of 281 affordable rental units. Those units will be in Bernalillo, Sandoval and Doña Ana counties with the projects identified as follows:
Farolito Senior Community in Albuquerque ($16,228,050): Developers plan to construct 82 units on Central and Eubank, through a land lease with the state’s land lease office.
Felician Villa II in Rio Rancho ($16,217,230): These funds will go toward building 66 units in a three-story building. Furthermore, the Felician Sisters of the Southwest provided the land for it. A senior center, offering reduced-cost meals and educational health and wellness seminars, will be within 500 feet of the building. This project is the second phase of the larger Felician Villa project for seniors, which received a $12,287,600 tax credit award last year.
Route 66 Flats in Albuquerque ($14,170,000 award): This project will see the construction of 48 units near Central and Unser. 33 of those units will be for permanent supportive housing for people transitioning out of homelessness.
Calle Cuarta in Albuquerque ($3,162,860): This project received $10,785,400 last year. $13,948,260 will go toward building 61 units on 4th Street, where they’ll offer a range of studios to three-bedroom apartments. The property will also have laundry rooms on each floor, computer labs, a social service office, a fitness room and more. There will also be five retail shops along 4th Street and four groundfloor live/work units off Fitzgerald Street and 21 for-sale townhomes.
Tierra Encantada in Anthony ($3,887,820): This money will go toward renovating this development already in the southwestern New Mexico town. When the project is done, there will be upgrades to 24 units for households with agriculture industry employees. The upgrades will extend the usable life of the homes.
The link to the news source is here:
https://www.kob.com/new-mexico/albuquerque-metro/affordable-housing-projects-in-new-mexico-to-receive-53-million/?utm_source=zetaglobal&utm_medium=onsite&utm_campaign=thumbnails
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POSTSCRIPT
New Mexico Has 48% Increase In Homeless With 4,000 Reported Statewide; ABQ’s Homeless Goes From 1,311 To 2,091; LFC Report Emphasizes Need For Affordable Housing; Need For Mental Health And Behavioral Services Ignored
