Legislature passes bill to allow $125M in loans to address ‘housing crisis’

The New Mexico Legislature will send a bill to Gov. Michelle Lujan Grisham unlocking $125 million for housing development, a big infusion of money intended for affordable housing infrastructure and homes for the middle class. 

Senators, without debate, approved House Bill 195 on Wednesday. The bill allows a revolving loan fund overseen by the New Mexico Finance Authority to be spent on building, acquiring and rehabilitating housing projects. Without the change, the existing Opportunity Enterprise Revolving Loan Fund could be spent only on commercial development.

The bill’s passage also means $175 million approved in the budget can flow into the fund, including $125 million just for housing investments.

In introducing the bill he co-sponsored, Sen. Michael Padilla (D-Albuquerque) cited the ongoing housing crisis as why such a big investment is needed. The state lacks at least 32,000 units affordable to those who earn less than 30% of their area’s median income, according to a recent study. 

“As we know, the housing crisis across the country and here in New Mexico is pretty serious,” Padilla said. “And it’s just growing, it seems, by the quarter.”

House representatives pave way for big investment in middle-income housing

Senators approved the bill by a vote of 26-14. The “no” votes were all from Republicans. Sen. Steven Neville (R-Aztec) voted in favor along with Democrats. 

Many of the projects would be geared toward “workforce housing” projects, which are those that are affordable to people who make low or middle incomes, but whose income is too much to qualify for affordable housing. 

Padilla also said loans could be made to help build roads, sewers and other infrastructure for developments that are aimed for those with low incomes. Affordable housing developments are currently funded by the Mortgage Finance Authority, but sponsors said funding infrastructure to support those developments is often difficult and outside the MFA’s purview. 

Despite sailing through the Senate floor, the bill drew two hours of debate when the House of Representatives heard it Feb. 6. House Republicans voiced concerns the bill would duplicate other state programs, isn’t transparent enough or would not be well-targeted to those whose income is just above the level that qualify them for state and federal subsidies. It passed the House 50-16. 

Lujan Grisham made the bill one of her housing priorities this session. She called its passage a way to invest in housing for those who can’t afford to live in the places where they work.

“These changes will help a segment of the population that isn’t invested in enough – teachers, police officers, nurses and others – who work full-time in incredibly important jobs, but still aren’t able to afford a home,” the governor said in a news release. 

Should the bill become law July 1, the New Mexico Finance Authority will write rules and begin accepting applications from aspiring housing developers. It’s not clear from the legislation when it will take its first applications or issue its first loans.