December 2, 2022
  • December 2, 2022
  • Home
  • Monthly income
  • Experts: Santa Fe Area’s Median Income Rise Is A Double-Edged Sword | Local News

Experts: Santa Fe Area’s Median Income Rise Is A Double-Edged Sword | Local News

By on June 5, 2022 0

When lawyer Dev Khalsa was a student at St. John’s College more than 15 years ago, he said the “Santa Fe shuffle” was about working multiple part-time jobs to make ends meet.

Khalsa now sees it as a dance between addresses – a constant search for more affordable housing in a city where it’s almost non-existent.

“I haven’t had a single traditional lease since 2018, which means a one-year commitment and all that,” said Khalsa, a candidate for trial court judge. “I had to complete…I just had to find what I can find.

“I haven’t been able to find things that I can afford with any regularity,” he added. “It’s been really wild, to be honest with you.”

The dance comes at a complex and uncertain moment in Santa Fe’s affordable housing crisis, punctuated by an often innocuous but important statistic.

The Santa Fe area median income, the national measure used to determine housing affordability, rose 10% this year.

The jump, observers say, is a double-edged sword – a boon for some buyers and renters hoping to access some government mortgage and rental relief programs, but also an unmistakable indicator of a deteriorating housing market that is already stressed for years.

The city’s director of affordable housing, Alexandra Ladd, said that based on her research and the feedback she’s received, real wages — which are often reflected by the area’s median income — are unlikely to be driving the economy. statistic increase. Instead, she said, it’s likely affected by newcomers whose incomes are significantly higher than those already there.

“There is a common agreement that higher income does not reflect higher well-being,” Ladd said. “It just means there are fewer low-income people in the city.”

The net effect is felt most deeply in housing, where in the first quarter of 2022, the median home price in Santa Fe County topped $622,000 — an 11% jump from the same quarter of the year. previous year, according to statistics from the Santa Fe Association of Realtors.

Sobered by that number, affordable housing advocates see cascading problems lurking in the median income statistic, which could mean the city is at risk of losing moderate-income residents who simply can’t compete on the market. home buying market.

“I think overall it’s a sign of something bad,” said Daniel Werwath, executive director of the Santa Fe Housing Trust. “It’s actually kind of a sign that some very, very, very unhealthy things are happening in our market.”

Each year, the US Department of Housing and Urban Development releases the statistics for each metropolitan jurisdiction in the United States based on census data. The calculation is then used to help set affordable housing prices – typically no more than a third of a family’s monthly income – and eligibility standards for certain government programs, such as community development grants and Section 8 vouchers.

According to figures released last month, the AMI for a single person in the sector is now $56,450; for a family of four, $80,600. This represents an increase of $51,150 for a single person and $73,000 for a four-person household in 2021.

Ladd said the increase could be a boon for renters and homebuyers hoping to access aid programs, adding that the city typically has more problems when the federal income gauge drops and fewer people may be eligible for assistance.

Among the programs impacted by an increase in the area’s median income are properties supported by low-income housing tax credits; a tax incentive to build or rehabilitate affordable housing for those who are generally limited to 60% AMI or less. The city’s Affordable Housing Trust Fund also offers a 120% median income subsidy program for purchase, repair and other rental assistance.

Still, Mike Loftin, CEO of the nonprofit Homewise, said Santa Fe’s growth in median income portends a troubling shift in the foundations of the community.

“Are people giving up and being replaced by people with higher incomes?” He asked.

Werwath said while wages have risen on average, the new AMI figure is likely due to transplants arriving during the coronavirus pandemic – the so-called Zoom Boom which has allowed people to work remotely while on the move. to safer or cheaper landing spots. The city’s real estate experts said the skyrocketing median home price in the city is likely due to out-of-state buyers where home values ​​are even higher than here.

Meanwhile, lower-income residents continue to be shut out of the area, with some heading to more affordable — or available — markets like Rio Rancho and Albuquerque.

“That has been true, unfortunately, for all increases over the past decade,” Werwath said. “The increases haven’t really reflected the growth in salaries. There’s a bit of wage growth, some wages have gone up, but what’s really happening is people who are better paid are moving in, while others who can’t afford to live here are moving out.

Laura Gallegos, senior commercial real estate lending coordinator at WaFd Bank, said her branch has always worked with a number of people from Texas, Colorado, California and other states looking to build their forever homes in the Santa Fe area. She said she noticed a slight increase during the pandemic as remote work became more popular.

“I don’t know if it was due to the influx of people from other places,” she said. “But we just kept staying busy. I think last year was one of our busiest years.

Werwath said the increase only underscored the need to build more housing across a variety of income levels, but added that many factors affected builders’ ability to produce affordable housing. Among them: 50-70% higher than normal supply costs and strict zoning requirements.

“I’ve never felt so much headwind for solutions in 20 years of this work,” Werwath said. “It’s unlike anything we’ve seen.”

Werwath said the city is taking positive steps, including funding growth management studies and deciding to update the city’s master plan. The city has also committed to funding the Affordable Housing Trust Fund to the tune of $3 million in its current year budget, but has not yet determined a recurring source to fill the pot. vital.

Santa Fe also has nearly 6,000 units under development, according to data provided by the city’s Land Use Office. Most of this growth has occurred on the south side, where more than half of these homes are being built.

But of those 6,000, only 689 have an “affordable” price.

Ladd noted that the median income in the higher area of ​​the city actually lowers the amount of money developers have to pay into the city’s Affordable Housing Trust Fund, which is used for things like down payment and rental assistance.

“That’s kind of the downside,” Ladd said. “This is how we generate a large part of our income. Now we can no longer afford to help so many people.

Loftin, whose organization funded a study in January that found 2 in 5 area workers live outside Santa Fe County, said the city and county generally have a strong mix of assistance programs. , depending on where a buyer or renter is on the economic spectrum. But he said he would like to see a stronger effort to get people to stay.

He said it’s not uncommon for locals to come to Homewise for help buying a home in Albuquerque or Rio Rancho.

“On all counts, it’s sort of self-evident,” he said. “You have to provide housing for your workforce or you’re in a downward spiral.”

He said more drastic measures need to be taken to address the overall housing problem in the region.

“Santa Fe,” he said, “leaves normal people behind.”