A housing expert gave a presentation to lawmakers Tuesday about New Mexico’s housing shortage, and possible solutions that have already been proven in several other states.
The Project Director for Housing Policy at the Pew Charitable Trusts, Alex Horowitz, didn’t mince any words in his presentation to the Economic and Rural Development and Policy Committee, providing a sobering view of New Mexico’s housing crisis by looking at the cost of rent from 2017 to 2024.
“Rents rose 29% in the US, which is a lot, affordability was getting worse. But in New Mexico, rents rose 58% during this time period. Albuquerque? Right on the mark with the rest of the state. Santa Fe — even faster.”
The median rental price in 2017, according to his presentation, was $673 and by 2024 it had risen to $1,065.
New Mexico’s largest jump was between 2021 and 2022, when the median rent price went from just over $800 to just under $1,000 in a single year, according to his presentation.
Horowitz said half of all renters in the state spend at least 30% of their income on rent, and 27% renters are spending at least half of their monthly income on rent.
He said rent prices are excellent indicators for rates of people experiencing homelessness.
“So no surprise, because rents were rising twice as fast in New Mexico as in the rest of the U.S., homelessness rose twice as fast in New Mexico as in the rest of the U.S.,” he said. “Highly predictable.”
Horowitz said the cause is simple, New Mexico doesn’t have enough homes. Over that same time period New Mexico’s available housing fell by half, as more people moved into the state, especially from California, and new construction was minimal.
“It drives up costs for everyone, but it's regressive,” he said “It hurts low income households the most.”
When housing supply is outstripped by demand, he said, prices go up. High income residents move into middle income homes, middle income residents move into low income homes, and low income residents are left with nowhere to go.
“Housing works like an escalator,” he said, “and when there's not enough of it, that escalator is going down, and everyone piles up at the bottom.”
But it’s not all doom and gloom, he said, because the land of enchantment could follow in the footsteps of states like Texas, Colorado, Arizona, and many others by passing laws to make it easier to build homes. That resulted in much lower rents that raised between zero and five percent compared to the national average of almost 30%.
“By removing those regulatory barriers, we're opening the door to more homes,” he said. “There can be enough for everyone.”
According to his presentation, Albuquerque only added 5.6% to its housing supply over that time, and saw rents increase by 61%. Houston, on the other hand, added 9.9% and saw a 13% increase in rent prices, and Minneapolis added 14.5% and saw rents actually drop by 2%.
He said removing zoning barriers is of particular importance.
“Allowing apartments on commercially zoned land is the single most effective policy change there is,” he said. “It can add a lot of homes and it allows them where people go every day, near transit, near jobs, near commerce. And it also is highly popular.”
He also suggests converting offices or other large buildings into housing, and even co-housing developments, with shared living spaces and smaller micro-units of about 150 square feet.
“It is cozy,” he playfully admitted, “but also safe, clean and often enough space for a single person.”
Co-housing units are more energy efficient and can house more people than traditional apartments with a lower price tag, he said. Moreover, the units themselves can be high-end with modern amenities and still maintain their affordability.
Horowitz’s full presentation can be viewed online, beginning at the 10:40:50 a.m. mark of the video. Support for this coverage comes from the W.K. Kellogg Foundation.
