About half of renters in Albuquerque and Santa Fe are cost-burdened, meaning that they spend an outsized portion of their paychecks on rent. That’s according to a new studyfrom Harvard Joint Center for Housing Studies, and those statistics are in line with much of the rest of the country.
Alexander Hermann is a researcher who contributed to the annual study. He said over 21 million U.S. renters spent more than 30% of their income on housing in 2021, the criteria for being cost-burdened. Of those, over half are severely cost-burdened, meaning they spent more than 50% of their income on housing.
“More renters were experiencing cost burdens than ever before in the nation's history,” he said.
The study found 49% of Albuquerque renters are cost-burdened and 26.6% are severely cost-burdened. In Santa Fe, 49% are cost-burdened and 33% are severely cost-burdened. Other metros such as Las Cruces and Farmington are facing similar numbers.
Freddie Mac estimates that the U.S. is short about 4 million homes as of 2020. Hermann said that despite that, construction of homes is slowing down. That’s in part because of high building costs and a shortage of construction workers.
And the homes that are being built tend to be for people with high incomes.
“If you look at how much we’re building right now compared to how much we were building 15-20 years ago, what isn’t being built [is] more affordable, more entry-level, more housing for more moderate income homebuyers,” Hermann said.
The report says that only 24% of new homes were under 1,800 square feet in 2021, compared to 37% in 1999. It attributes that change to, “rising construction and land costs, limited lot availability and regulatory barriers, like minimum lot sizes.”
It shows that housing costs are increasing much more slowly than earlier in the pandemic. Still, Hermann said that doesn’t make up for how expensive it’s gotten in that time. Home prices in Albuquerque, for example, only grew 3% last year, compared to 18% the year before. But they’ve still risen 38% since the start of the pandemic.
In Albuquerque and Santa Fe, the report finds about 22% of homeowners are cost-burdened. About 11.5% are severely cost-burdened in Santa Fe, and that drops only slightly to 10.6% in Albuquerque.
He added that though there is a cross-country shortage of housing and persistent obstacles to fixing it, he does find it encouraging that many states and cities are making it easier to build multi-family housing.
“Multi-family construction has been extraordinarily resilient,” he said.
Construction of those units are at a 50-year high, though many of them, like single-family housing, are aimed at high earners.
The study also reports that the pandemic trend of people moving out of urban areas and into rural areas continued through 2022, though at a lower rate. Housing prices even declined in some of the most popular moving destinations of the early pandemic, like Boise, Austin and Phoenix.
This coverage is made possible by the W.K. Kellogg Foundation and KUNM listeners.
