UPDATE: The future of affordable housing in Santa Fe is hanging by a thread as the critical extension of Paseo del Sol has been excluded from the city’s capital outlay request list for the upcoming legislative session. This decision jeopardizes the construction of Phase 3 of Tierra Contenta, which promises to deliver 1,500 homes to the city’s south side, with 40% designated as affordable housing.
Homewise, the nonprofit developer overseeing the project, expressed deep disappointment in the city’s lack of support, especially against the backdrop of Santa Fe’s escalating housing affordability crisis—one of the central issues during the recent mayoral election. Deputy CEO Johanna Gilligan stressed the urgent need for city backing to subsidize infrastructure costs, stating, “We really believe that the city, and particularly the new administration, has an opportunity to demonstrate their commitment to affordable housing.”
In a statement released on Friday, city officials claimed they view themselves as a partner in the project, collaborating with Homewise and other nonprofits on various initiatives to tackle the pressing lack of affordable housing in Santa Fe. However, the absence of funding for the Paseo del Sol extension raises concerns.
The city’s Infrastructure and Capital Improvement Plan (ICIP), which outlines funding priorities, currently does not include this crucial project. Mayor Alan Webber introduced a resolution to establish the city’s priorities for the upcoming session, with a vote scheduled for December 10, 2023. Gilligan noted that the Paseo del Sol expansion was previously listed in the ICIP, and its removal is disheartening.
Since 2016, rents in Santa Fe have surged by 74%, while home prices have skyrocketed by 80%. The city’s limited availability of homes for sale exacerbates the crisis, making the construction of affordable units in Tierra Contenta more critical than ever.
Homewise recently submitted an application for funding from the Affordable Housing Trust Fund, but the list of grantees for this year remains unannounced. Without city financial support, the project’s viability is increasingly uncertain. Gilligan indicated that at least $6 million in additional subsidies is necessary to offset infrastructure costs, which cannot be easily passed on to homebuyers due to the affordable nature of the homes.
The project’s implications extend beyond housing; it serves as a potential solution to enable local workers to reside in the community they serve. The August memo to the City Council highlighted the need for increased housing supply as essential for supporting wage increases in Santa Fe.
Despite receiving $8.9 million in capital outlay from state lawmakers, concerns linger regarding the city’s ability to execute the project efficiently. Gilligan remarked, “The No. 1 hurdle we faced in raising capital outlay was everyone’s concern that the city itself would get in the way of the project getting done.”
In a positive turn, Homewise is hoping to receive final plat approval for the spine infrastructure from the Planning Commission this December. If approved, the nonprofit aims to break ground in the first quarter of 2026. Gilligan described this timeline as aggressive but necessary to demonstrate a commitment to utilizing state funds effectively.
As the city reevaluates its funding strategies, including potential road impact fees, all eyes are on the upcoming vote and the administration’s ability to prioritize affordable housing initiatives. The urgent need for collaboration between public and private sectors has never been more critical.
With community leaders and residents anxiously awaiting developments, the fate of affordable housing in Santa Fe remains uncertain. Will the city step up to fulfill its commitments, or will the housing crisis deepen further? Stay tuned for updates as this story develops.
