Bill extending tax breaks for blighted areas signed into law

Legislation extending tax break periods for developments within New Mexico’s blighted areas has been signed into law.

Gov. Michelle Lujan Grisham signed the legislation, Senate Bill 58, last week, allowing municipalities to extend the property tax exemption period for development projects in Metropolitan Redevelopment Areas, commonly referred to as MRAs.

MRAs are blighted areas for which development incentives, including tax abatements, are available. Tax abatements enable property taxes to freeze at pre-development levels for certain periods, giving projects time to stabilize before developers pay higher taxes on improved properties.

Before SB 58, a seven-year term was the only option available, which local leaders say is ineffective for longer-term projects — like affordable housing developments — that require more financing and often take more than a decade to stabilize.

Under the new law, municipalities can award developers tax abatements for terms up to 14 years.

The city of Albuquerque, which has 19 MRAs, hailed the governor’s action in a Monday news release, stating the new law will strengthen the city’s ability to support redevelopment projects, spur investment and draw new housing and businesses to these areas.

“This change gives communities and developers more time to make projects succeed,” said Terry Brunner, the city’s Metropolitan Redevelopment Agency director, in a statement. “Redevelopment often takes years of planning and construction. With more time, we can support projects that bring housing, jobs and vibrant community spaces to life for Albuquerque families.”

Mayor Tim Keller, who has long highlighted Albuquerque’s need for more affordable housing, agreed and thanked the governor and SB 58’s supporters for “making this effort possible.”

The new law will apply to redevelopment agreements signed after it takes effect in May.

In the months ahead, the city’s Metropolitan Redevelopment Agency will work with partners and stakeholders to finalize implementation details and identify projects that could benefit from the extended abatement period, a news release said.

Some recent projects that have benefited from the city agency’s Redevelopment Tax Abatement program include Sol Housing’s senior affordable housing project, which is nearing completion on the corner of Central and Alcazar SE, and Titan Development’s hotel and food hall under construction along Central Avenue.

Altogether, the program has supported the development of more than 350 new homes since its creation in 2023.

Sol Housing Executive Director Felipe Rael said the signing of SB 58 into law is “a great first step” to getting even more homes on the market.

“We are in a housing crisis throughout New Mexico and, specifically for projects that are in Metropolitan Redevelopment Areas, this is just another great tool to help spur investment, and I hope it spurs more housing investment,” Rael said.

Kylie Garcia covers retail and real estate for the Journal. You can reach her at kgarcia@abqjournal.com.