Sept. 20 – A proposed rewrite of Santa Fe’s land use code would immediately create additional incentives for affordable housing, rather than waiting until a later phase of the update.
The city has been working with consultants from Denver-based Clarion Associates for more than a year and a half on the update, which will take place in three phases and last through at least 2026. While city officials had previously said they would wait until phase two for more in-depth updates, a draft of phase one released this week includes some significant additions to the city’s affordable housing incentive structure.
The proposed incentives, called “Creating Affordability Now,” would provide a density bonus — that is, allow developers to build more units — for developments that offer at least 30% of their units at an affordable price. The size of the bonus would vary, from 1.5 additional units per affordable unit for developers with 30-39% affordable units to two additional units per affordable unit for developments that are more than 50% affordable.
The new bonuses would only be available to developers who actually build the units, unlike the current program, under which developers can still receive a 15% density bonus if they pay a flat fee into the city’s Affordable Housing Trust Fund instead of building the units.
Daniel Werwath, housing policy adviser to Gov. Michelle Lujan Grisham, said at a briefing Wednesday that the new incentives are designed to encourage developers to build affordable housing in what is a very challenging building environment.
“Affordable housing in Santa Fe right now costs more to build than you can sell for it,” he said.
Other incentives could include faster administrative review of affordable housing projects and lower parking and size standards, all aimed at reducing development costs.
The city’s land use code was last comprehensively updated in 1987. More substantial updates will occur in phase two, which could include changes to the city’s zoning, parking requirements and the approval process for new development. The third phase will align the code with a new general plan, which was last implemented in 1999.
Because the proposed density bonus is scalable, Werwath hopes that it will make it easier to realise smaller, affordable housing projects, something that is currently a financial challenge.
“One of the problems we have now is that affordable projects that are being done by developers at market rates really require large economies of scale. And now all of those projects have to be done on the south side because that’s where the large, developable tracts of land are,” he said.
Werwath pointed to Casa Pacifica, a recent Homewise project that converted short-term rental units into five apartments on Paseo de Peralta, as an example of the kind of development that could be made possible by the proposed incentives.
“That’s an example of something you can’t do on a vacant lot right now,” he said. “But this is a type of development that is on a traditional scale in many of our existing neighborhoods.”
Werwath is part of the Citizen Advisory Working Group, one of the advisory groups that advised on the land use code update. It is the group that originally proposed the incentives that became the Creating Affordability Now proposal.
Johanna Gilligan, another member of the working group and Chief External Affairs Officer at Homewise, said the incentives were pushed for inclusion in phase one because of the urgent need for affordable housing in Santa Fe.
“Given that we know that the general plan and the complete updating of the zoning plan legislation will probably take at least another three to four years, we thought it would be wise to include this in the first phase,” she said.
Members of the city’s development community said this week they support the proposal.
“Builders, developers, they’re operating on very tight margins, especially in this Santa Fe area,” said Miles Conway, executive director of the Santa Fe Area Home Builders Association. “That’s why you see a lot of developers doing high-end development and you see so little development for working people. … It’s really hard to make it work economically.”
He said the incentives are just one piece of the puzzle and that faster administrative review would also help.
“It will open the door to some good things,” he said of the proposed changes.
Tom Spray, director of the Santa Fe chapter of the American Institute of Architects, said he thinks the inclusion of affordable housing incentives in the first phase of the update is “terrific and very appropriate.”
“I think we’re seeing a lot of things coming together, and that’s great,” he said.
The draft is available online for public comment and is expected to go before the City Council for final approval later this year, said Maggie Moore, city planning manager. It could be modified based on public input before the final version is presented to council.
During two information meetings last week, participants appeared largely positive about the proposed incentives.
During Thursday’s meeting at the New Mexico History Museum, John Bacon, a caseworker at The Life Link, spoke about his experiences trying to help homeless clients with housing vouchers find a place to live. While he said some of his clients struggle with challenges like substance abuse or serious mental illness, “in general, I’m seeing more and more clients who have income, have jobs, and don’t have anywhere to live.”
“I fully support this program to help address homelessness because homelessness is a housing problem,” he said.
