Lawmakers weigh new state housing laws, as New Mexico's dwelling shortage worsens

SANTA FE — New Mexico has long left housing rules up to local governments.

But amid surging housing prices, a shortage of rental units and an increase in the state's homeless population, that could soon change.

Legislation filed at the Roundhouse would preempt municipal and county restrictions on zoning, parking restrictions and legal appeals with the aim of paving the way for more multifamily housing developments.

Sen. Antonio "Moe" Maestas, D-Albuquerque, who has filed four housing-focused bills, said it's time for the state to flex its muscles when it comes to development and growth.

"Policymakers need to decide if we want to grow this economy and confront generational poverty, or if we want to remain poor given certain powerful individuals' selfish wants and desires," Maestas told the Journal.

A recent report by Pew Charitable Trusts found restrictive regulations are exacerbating New Mexico's housing shortage and driving housing prices up.

Specifically, the report found median rents in New Mexico increased by 60% from October 2017 to October 2024 — more than double the national rate of 27% during that time period.

In addition, prices for housing climbed even more rapidly, with the average home price rising to $330,900 in Albuquerque and even higher in Santa Fe.

Alex Horowitz, one of the report's authors, said New Mexico is one of only a few western states that has not enacted new statewide housing policies dealing with land use, permitting and building codes in recent years.

He also said New Mexico's homebuilding rate has lagged behind the national rate, contributing to the state's housing shortage.

"New Mexico has been a seller's market for a long time now," Horowitz told the Journal.

Rising housing prices are also directly connected to homelessness, he said, citing an increase in New Mexico's chronically unhoused population from over the last seven years.

Federal data shows the number of people without homes in New Mexico jumped by 87% from 2017 to 2024 — more than double the national increase over the seven-year period.

Daniel Werwath, the housing policy adviser for Gov. Michelle Lujan Grisham, said the Governor's Office is open to the bills filed by Maestas, which are among more than a dozen housing-related proposals pending at the Roundhouse.

New Mexico is one of just five states with a declining number of new building permits being issued, Werwath said, while adding that it takes much longer and costs more to build new housing developments in Santa Fe than in most other locations.

"I think at the very least, they're going to start some conversations on this," Werwath said, referring to the statewide housing bills.

Past efforts to fix housing shortage

New Mexico lawmakers have taken some steps already to try to address the state's housing crunch.

A housing trust fund created in 2005 provides funding for statewide affordable housing projects, and lawmakers last year approved a $50 million infusion for the fund.

However, Horowitz said money alone has not been shown to be effective in reducing housing prices or addressing a shortage of rental units.

He also said policies such as bans on investor-owned properties and restrictions on rent increases have shown limited effectiveness in changing underlying housing trends.

For his part, Maestas said he believes local zoning restrictions have contributed to the state's stagnant economic and population growth in recent years, along with the increase in homelessness.

"The housing shortage and the homeless issues back home have put zoning ordinances on the table here in Santa Fe," Maestas said.

"We have our best and brightest young people leaving to work and live elsewhere, and yet we still have not undone these policies that contribute to that phenomenon," he added.

However, the push to preempt local restrictions on building heights, minimum parking mandates and limits on building casitas and other secondary dwelling units is likely to draw opposition at the Roundhouse.

Neighborhood groups have actively fought new developments in Albuquerque and Santa Fe in recent years, citing concerns related to blocking the viewshed, urban sprawl and increased traffic.

In response, Maestas cited a recent Massachusetts study that found individuals who speak about housing projects at public meetings tend to be disproportionately white, older male homeowners compared to the general population.

Lujan Grisham also highlighted the Pew report this month, saying it showed how "outdated regulations" are contributing to New Mexico's challenges with housing affordability and homelessness.

The Democratic governor is pushing once again during this year's 60-day session for legislation creating a state office of housing planning to focus on systemic housing issues.

Lujan Grisham last year used her executive authority to create such an office, but is still urging lawmakers to approve the legislation, Senate Bill 205, so that it would be enshrined in state law.

Local push for scaled-back restrictions

Efforts to ease housing restrictions have already been playing out in city halls and county commission buildings around New Mexico, with limited success.

Albuquerque city councilors last month passed a bill that allows duplexes, townhouses and multifamily housing along certain heavily traveled parts of the city.

That ordinance, which also eliminated administrative appeals for projects on city-owned property and set new location-based requirements for appeals targeting new developments, drew fierce criticism from at least one neighborhood association.

Andrea Calderón, the board president of the Albuquerque Affordable Housing Coalition, said some of the bills proposed at the Roundhouse align with the coalition's goals.

But she also cautioned that some of the statewide policy proposals that might benefit Albuquerque could cause issues in other parts of New Mexico.

"While we want denser infill development in Albuquerque and more units per square foot, we understand the need for rural communities to maintain their character and viewshed," Calderón said.

She also said a bill that would give local governments eminent domain power to pursue development projects in certain designated areas could face particular opposition, citing the possibility of such a law being used to condemn existing homes to build a new sports stadium.