February 22, 2022 –
For many in Santa Fe, the American dream has turned into a nightmare of stagnant wages and booming housing costs.
A new study from the Santa Fe-based nonprofit Homewise found the cost of a single-family home in the city increased 30 percent from June 2020 to June 2021, the most recent period for which figures were available, while average hourly wages rose only 2.7 percent. That’s an ominous combination for working-class people who want to stay in Santa Fe.
“Santa Fe natives, people who work in Santa Fe, are less and less able to afford a home in Santa Fe,” said Kelly O’Donnell, who produced the eight-page report titled, “Who Can’t Afford to Live in Santa Fe?”
“It’s a troubling trend,” she added.
O’Donnell conducts policy analysis and research for Homewise, which helps people achieve homeownership.
She and Homewise CEO Mike Loftin say the tandem of rising home costs and flat wages threatens the city’s ability to retain workers, attract employers and remain a vibrant, inspiring place populated by people of varying age groups and income levels.
Many people can’t settle into their own home, jeopardizing a youthful work force that has the potential to produce the workers of the city’s future, too. Further, there is a short supply of affordable homes in Santa Fe, the experts say, which increases apartment occupancy and drives up rent prices as well.
A 30 percent increase in home prices over one year stunned Loftin.
“I’ve been doing this for 30 years,” he said. “I’ve never seen that big a jump, ever.”
Through determination, luck and the help of an organization, Ivette Ortega acquired her own home last year.
Ortega wanted to stay in her hometown, but as a single mother with a little boy, she knew it would be challenging. She worked three jobs and got a good break when she learned about Habitat for Humanity. Now she, her 7-year-old son, Abel, and their two dogs, Osa and Leila, have landed in a house in Santa Fe.
“I love Santa Fe. But it’s expensive,” Ortega said. “I’m just super thankful for Habitat.”
Loftin said organizations like Homewise, Habitat for Humanity and The Housing Trust provide assistance that helps some working-class people in Santa Fe buy homes. The city also has an affordable housing trust fund.
“There’s people working on this,” he said. “It’s often the case that there’s a lot of good work, but you need a lot more of it.”
Alexandra Ladd, director of the city’s Office of Affordable Housing, said Santa Fe has been proactive in encouraging development of affordable housing. The city “would be in worse shape” if not for that, Ladd said.
Ladd said the city gives fee waivers and other incentives for developers to build affordable housing. Annually, it provides $3 million in city money and $600,000 in federal community development money to support organizations like Habitat for Humanity, she said. New developments are generally required to include some affordable housing units, she said.
“People from other places like to live here,” she said. That drives up housing prices and contributes to an “Aspenization” of Santa Fe, she said, making Santa Fe prices prohibitive for many of its workers, similar to what happens in ski resort towns.
Daniel Werwath, acting executive director of the Housing Trust, a nonprofit that helps Northern New Mexico residents gain access to affordable housing, said the city has worked on the problem but barriers remain.
“Just because we do a lot doesn’t mean that it’s enough,” he said.
One obvious barrier is that more than 50 percent of the residential land here is zoned to allow no more than one home per acre, Werwath said. Those are huge lots, he said, when by comparison there are seven homes per acre in affordable housing areas. The predicament of too little affordable housing “is completely predictable,” Werwath said. There hasn’t been enough home construction to meet demand and population growth, he said.
“The problem is that we have 10 years of pent-up demand that we’re trying to solve now,” he said.
Historic and highway corridor protection areas also put in extra design requirements, layers of approval or land-use constraints that generally impede affordable housing, he said.
“And it made huge areas of the city exempt” from such housing, Werwath said.
O’Donnell and Loftin said Santa Fe has a reputation as a city in which it’s hard to build new housing.
Some people in Santa Fe like affordable housing in theory, O’Donnell said, then object to it when it’s proposed in their neighborhood. It’s a matter of “keeping our principles in focus,” she said.
Some lose sight of the fact that it’s vital there be excellent access to quality housing, she said, adding, “It’s the conflict between people’s support for affordable housing and their resistance to it when it’s in their neighborhood.”
Ivette Ortega, 25, received numerous benefits from Habitat for Humanity; it built her house. Ortega had to put in about 350 hours of “sweat equity,” she said, and in the process she learned plenty about her house and home repair.
“I know what’s in back of my walls,” she said. Among other benefits is a zero percent interest rate on her mortgage. “So everything I pay is to the principal.”
Before this, she and Abel lived in a mobile home with a four-member family. Ortega said her father told her the importance of investing and that paying rent eats up money without any investment benefit.
She works for an auto dealership now, but when she was looking for her own place, she had three part-time jobs. She feared the American dream of owning a home was just that — a dream.
“It’s not like I was going to be able to afford anything,” Ortega said. But her job prospects improved as she advanced to full-time work at the dealership.
“Yeah, I like to work,” she said. “I like money. I like to be able to provide for Abel and his needs.”
Loftin and O’Donnell said well over one-third of the jobs throughout Santa Fe County are filled by people who live outside the county. They live in places like Rio Rancho, Española and Albuquerque.
Those are long, gas-guzzling commutes. Further, they said, people tend to buy groceries and clothing in the towns where they live, so Santa Fe misses out on that revenue. The commutes contribute to pollution, they said, and many eventually find work closer to home.
“So unless we increase the supply of housing … we’re going to just keep losing more and more of our workforce,” Loftin said.
O’Donnell said homeownership is a key way in which Americans accumulate wealth. Some people think homeownership is only for people with substantial means, she said. But programs can help people with financial coaching, down payment assistance and other ways to reduce the burden, she said.
Still, the evidence of the housing shortage is abundant, and much of what’s available tends to be costly. Between June 2020 and June 2021, O’Donnell’s study shows, the median sale price of a single-family home in the city increased 29.6 percent, from $382,000 to $495,000. And that trend has continued, Loftin said.
As for Ortega, she broke through the barrier with the help of Habitat for Humanity. She, Abel and the dogs moved in last summer.
One day her father visited her in her new home and found her mixing cement. She needed to lay the cement in front of a gate the dogs had been digging under.
Her father was impressed and asked where she had acquired such a skill. She told him she learned it through the sweat equity she put in with Habitat for Humanity.