FAQ
How bad is Santa Fe’s housing crisis?
Rapidly escalating housing costs are driving an exodus of low- and moderate-income families from Santa Fe, changing the city’s very nature and undermining quality of life for all residents. There is no neighborhood in our city where the average full-time, wage earning renter can afford a modest two-bedroom rental home and the median price to purchase a new home is now $604,500. The bottom line is that everyone who works in Santa Fe ought to be able to live in Santa Fe.
What is the affordable housing measure?
This November, voters in Santa Fe will be asked to approve a one-time, 3% excise tax on the value of homes over $1 million. For example, a $1.5 million home would create a tax of $15,000 — a 3% tax on the amount over $1 million. This is one time, and only the buyer pays it. This will generate a permanent revenue stream to address the housing needs of Santa Feans with hundreds of affordable housing units, rental assistance, and more.
How will the affordable housing measure funds be used?
Generating an estimated $6 million in new funding each year for the City’s Affordable Housing Trust Fund, groups like Santa Fe Habitat for Humanity and organizations will build affordable housing, provide mortgage and rental assistance, and increase programs to get homeless individuals into housing and substance abuse, mental health, and transitional housing programs. And these funds will be subject to an independent review each year to ensure funds are used as intended. Past funding has supported a range of housing issues from homelessness to apartment upgrades.
How will this tax impact Santa Fe residents?
A real estate excise tax is the most equitable way to generate the revenue needed to address Santa Fe’s rapidly worsening housing crisis. By imposing the tax on purchasers and exempting the first million in property value, Santa Fe ensures that only households with the financial means to purchase million dollar homes pay the tax.
This tax will not apply to the transfer of homes within a family, or the sale of land.
Why not have everyone pay the same tax on the sale of homes?
Under the current proposal, a $1.5 million home would create a tax of $15,000 — a 3% tax on the amount over $1 million. As a rule, to qualify for a $1.5 million home (assuming the buyer is not paying cash, which often happens in Santa Fe), one needs to make about $325,000 a year. The tax then, represents 4.6% of the buyer’s annual income.If we were to levy this on every home sale, a couple seeking to buy their first home for $200,000 would be taxed at the same 3% rate, adding $6,000 to their sale price. To qualify for a $200,000 affordable home, one needs to make about $62,000 a year. That means the first-time home buying couple would spend almost 9.6% of their annual income on the tax, more than double the tax rate of the $1.5 million buyer.
What impact will this have on people experiencing homelessness?
New Mexico is 32,000 affordable housing units short by the government’s estimate. As of May 2023, according to Zillow, the average rent here is $2,015. Which means you must have an income of $73,000 a year to afford to live in a rental. Around 75-80% of renters are what’s considered “rent-burdened”, in other words, they’re spending over 30% of their income on housing to survive. This puts them in a precarious position: having one catastrophic event, and they’re homeless. While Santa Fe provides linkages vouchers, permanent supportive housing vouchers to off-set the burden of cost of housing, the qualifications do not meet the need, and there is a huge waiting list.
This measure would provide eviction prevention, rent assistance, additional vouchers, hundreds of units of affordable housing, and more. It will help keep people housed, and that will in-turn help with the many issues that come with housing insecurity.
What is the Affordable Housing Trust Fund?
In 2004, the NM State Legislature passed the Affordable Housing Act, which provided an exception to the NM Constitution’s anti-donation clause for the purpose of allowing local governments to allocate resources towards affordable housing acquisition (including land for construction), renovation of an existing property, development of a new property, financing, maintenance, and operation. The Act provided a roadmap for public-private partnerships for local affordable housing projects. MFA Housing NM
The Santa Fe Affordable Housing Trust Fund was established in 2005 after the passage of the State Affordable Housing Act (2004), as a mechanism by which to fund public-private partnerships on affordable housing. Currently, the fund’s primary funding sources are developer fees (fee-in-lieu & partial unit payments from Santa Fe’s inclusionary zoning policy) and recycled assets from previous City housing investments. SFHAC Dec 2020
How can we be certain the money will be used for its intended purpose?
The Affordable Housing Trust Fund is overseen by an independent, citizen review commission made up of community members nominated by other community members, agencies, and peers. These members are selected by the City Council and vote to allocate funds to different housing agencies throughout Santa Fe. These funds are mandated to only be used on housing and housing related projects and programs. The roots of the fund date back to 2004, when New Mexico passed the Affordable Housing Act. The law added an affordable housing exemption to the state’s anti-donation clause, which prohibits public resources from being used for private benefit.
Why a tax and not a bond?
Bonds are great–we would love bonds in addition to this funding as they can be used for big infrastructure projects (i.e. buildings, physical structures, a.k.a. housing), but that is the only use for that money. No rental assistance, no eviction prevention, no vouchers, and no down payment assistance. They also require us to go to voters every two years, which means that funds hang in the balance of political will. There is also the potential of caps on the amounts raised. With a permanent funding stream, we can leverage larger pots of money, and continue to help on the variety of housing challenges we face in Santa Fe including with rents.
What about all the oil and gas money from the state?
Oil and gas funds are state revenue. The state is under no obligation to provide that money to Santa Fe, and it cannot be considered a permanent or consistent funding stream. We need ongoing funds in order to operate the housing program that this city desperately needs. This new proposed tax would be a permanent way to receive resources and meet the needs of the community.
When do we vote?
Election Day is Tuesday, November 7, 2023. Early voting for New Mexico begins October 10, 2023. Absentee ballots must be requested by October 26, 2023. Go to the Santa Fe County Clerk’s office website for more information on polling locations and The Secretary of State’s Office site for voter registration information.