Affordable Housing: The Need for a Multifaceted Approach

Perhaps the most-mentioned issue in Santa Fe’s recent municipal election was affordable housing. Now that the election is over and the work of governance begins, what can the city of Santa Fe do to have a real impact on our affordable housing crisis?

Before we can develop and implement an effective strategy, it would do us good to better understand how housing works, how it behaves within the marketplace, and the multifaceted needs of the community. And we should understand how things may change over time — housing is not a static thing for which there is a set blueprint.

First, it is important to understand that there is a continuum of housing needs and desires and that each element of that continuum affects the others. The housing spectrum includes the following:

• Sheltering the homeless and emergency housing;

• Transitional housing that helps move people into permanent housing;

• Subsidized low-income rental housing;

• Market-rate rental housing;

• Helping first-time homebuyers;

• Helping existing homeowners make needed repairs and improvements;

• Senior and assisted-living housing.

This continuum is interconnected. If we are successful in transitioning the homeless into permanent housing, it creates a need for more rental housing. If a renter becomes a homeowner, it frees up a rental unit for someone else. If a homeowner is foreclosed upon, it creates a need for more rental housing. If a senior homeowner can adapt a home to allow for aging in place, it reduces demand for expensive assisted-living housing.

Currently, it is commonly expressed that the affordable housing need in Santa Fe is for rental housing. But to understand the rental problem, we need to pay attention to how the housing continuum is interconnected. It is true that the rental vacancy rate in Santa Fe is very low and there is a need for new rental housing. That’s why Homewise has supported the proposed arts and creativity rental housing project on Siler Road.

But it is also important to understand the relationship of rental housing to homeownership. First, one of the reasons there is so much pressure on the rental market is because of what’s happened in the homeownership market. Since the Great Recession, homeownership rates are down. People who would normally be purchasing homes aren’t (because of tougher mortgage requirements and a lack of affordable homes) and are now renting, which creates new pressure on rental housing.

On the other hand, when people buy homes, they make rental units available to others. In the past six weeks, more than 30 households purchased homes in our El Camino Crossing neighborhood. Unless these buyers were living with other family members or friends, each one of these buyers essentially created a new rental opportunity for someone else.

In short, if Santa Fe is going to effectively address its affordable housing crisis, we need to address the entire housing continuum, from homelessness to homeownership. Our policies need to encourage mobility into homeownership not only so that those new homebuyers stabilize their housing expense and benefit from the asset-building homeownership offers, but also so that we free up rental units for others who need them. And we need to build more affordable rental housing to help people overburdened by expensive rent and also to make it easier for them to save for a down payment, buy a home and free up their rental unit for someone else.

Housing mobility can create a virtuous cycle — a cycle that can make a significant positive impact on what can seem like an intractable problem.

Mike Loftin
Chief Executive Officer of Homewise Inc.

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