New Mexico has spent a lot of money on housing in the last few years. A new state report asks a simple question: what did it buy?
The Legislative Finance Committee presented a progress report Tuesday, Sept. 22, at an interim meeting in Las Cruces that reviewed about $524 million in state housing and homelessness spending since fiscal year 2023. According to Source NM, the report found the state's housing supply has grown a lot since 2020, but state-backed projects make up only a small part of that growth, and lawmakers often haven't set clear markers for success.
Where the money stands
According to the LFC report itself, nearly $328 million of the $524 million has been spent or committed. That money supports roughly 4,400 housing units.
Fewer than half of the planned new units are finished. The report counts 1,321 completed out of 3,226 planned, or about 41%. For 21 of 86 funded projects, agencies have yet to report results.
The report also found very little of the money is aimed at the households with the hardest time finding housing. Of 3,202 planned units with reported income limits, only 154 are reserved for people earning 30% or less of area median income. The Paper. and New Mexico Political Report calculated that's about 1% of income-restricted housing dollars.
Analysts also questioned a contract the state's Office of Housing signed in June with Boston Consulting Group for an eight-week housing study costing up to $1.4 million.
Most of the money went where the need is greatest. Bernalillo County projects drew about $143.1 million, about 27% of the total. The Paper. reported that Santa Fe County drew $35.3 million and Doña Ana County $16.4 million. But the report found the state has no formula tying awards to regional need.
A slow decade for permits
The report puts New Mexico's housing shortage in context. From 2010 to 2020, the number of new housing units permitted in New Mexico grew only about 15%, from 4,533 to 5,219. Over the same stretch, permits rose 161% in Texas and 388% in Arizona, and 143% nationally.
Since 2020, homebuilding has picked up. Source NM reported the state has added about 62,000 housing units in recent years and is generally building more than the annual number needed to chip away at the shortage. But the report noted new homes aren't always built where they're needed, and some are too expensive for the lowest-income residents.
LFC program evaluator Josh Chaffin told lawmakers that while housing in New Mexico is often cheaper than in big Arizona or Texas cities, wages are lower too. Nearly half of New Mexico renters are cost-burdened, spending more than 30% of their income on rent and other housing costs.
"Our affordability problem in this state is a little different," Chaffin said. "Housing can still be unaffordable relative to what people earn."
The meeting also highlighted the "Las Cruces model," in which the city bought property decades ago and lets homelessness nonprofits operate on it. Five nonprofits now run services from the city-owned campus, including a shelter, a health center, a soup kitchen and a food bank.
Why it matters for Contractors
For builders, the most important number in this report may be 1,321 out of 3,226. More than half of the new units the state has paid to support aren't finished yet. That's a lot of housing still somewhere between approval and move-in, and some of it is likely still waiting on crews.
The report's focus on accountability matters too. The report found the Legislature has often failed to set clear markers of success for the projects it pays for. That could lead to more reporting requirements, clearer goals and closer tracking on future state-funded housing jobs. Contractors working on those jobs should be ready to document progress and hit milestones.
The permit numbers are a reminder of how far New Mexico fell behind its neighbors. Even with the recent pickup, the state is still catching up after a slow decade.
With the next legislative session coming in January and the Office of Housing asking for more money, this report will likely shape how lawmakers decide what to fund. Contractors who build affordable and workforce housing should pay attention, because the rules attached to the next round of money may look different.