Governor’s push for state housing office on hold for now
Bill to create statewide housing office pulled before committee, but it’s not dead yet
The Roundhouse in Santa Fe pictured Jan. 24, 2024. (Photo by Patrick Lohmann / Source NM)
Legislation enacting one of Gov. Michelle Lujan Grisham’s biggest priorities to address the ongoing housing shortage in New Mexico was pulled before being heard by a Senate committee Friday afternoon because the sponsor said it might not have enough support to survive.
The governor announced the plan for a statewide “Office of Housing” at the beginning of the 30-day legislative session during the State of the State speech. The office would try to coordinate an array of housing programs across state agencies and collect the data necessary to fully understand the depth of the state’s housing affordability crisis, among other things.
Sen. Michael Padilla (D-Albuquerque) told Source New Mexico on Sunday he wasn’t “100% confident” that Senate Bill 71 had enough support in the Senate Health and Public Affairs Committee. The legislation was scheduled for the Friday afternoon meeting, but, sensing he didn’t have the support he needed, Padilla said he pulled the bill before it could be heard.
Padilla, the Senate majority whip, is unsure if the bill could go before the committee this week, but said it is possible. As of Sunday, it was not on the Senate committee schedule..
In a short session, Padilla said couldn’t predict whether the legislation would be heard at all. The bill is also assigned to the Senate Finance Committee, and it has to make its way through the House, as well.
Padilla also didn’t have a clear sense of why some committee members might not be in favor of the bill, he said.
“We’re burning daylight now, but it just depends on where the support is,” he said.
A new Office of Housing would be attached to the state Department of Finance and Administration. It would require $1 million in start-up costs, including the hiring of five full-time employees, and between $375,000 and $750,000 a year onward for salaries and contracts, according to a Legislative Finance Committee analysis.
The purpose of the new office would be to work with local governments and private developers to fill funding and technical needs for new housing projects, plus work with the state Mortgage Finance Authority to coordinate projects. It would also be required to develop an annual statewide housing plan.
MFA officials and the New Mexico State Auditor’s office told legislative analysts that they were concerned a new housing office would duplicate their efforts and even pose legal conflicts. For example, the MFA’s housing trust fund has 120 employees that oversee more than 40 local programs and hundreds of partnerships with private companies. In the 2023 fiscal year, it oversaw spending of nearly $600 million for affordable housing programs.
“Creating a duplicative agency may decrease administrative efficiency of resource deployment and convolute the high level of coordination among housing stakeholders that currently exists,” MFA officials told analysts.
The New Mexico State Auditor’s Office told analysts that the proposed law does not make clear which entity would take precedence if, for example, the Office of Housing sought to build affordable housing with a developer the MFA deemed too risky to loan to.
But officials with Lujan Grisham’s office and Padilla said the new housing office is necessary amid an estimated affordable housing shortage of at least 32,000 units. Nearly all states have a dedicated housing agency, officials said.
And the initiative would support existing programs as a “sister agency,” according to a handout released to the press on Jan. 26 distributed by the governor’s office detailing her proposed reforms this session.
“The Office of Housing does not eradicate or duplicate the existing, primarily project-by-project approach to housing affordability,” according to the handout.
During the 2023 legislative session, Lujan Grisham’s office pushed for legislation that would have created a statewide “Department of Housing,” which would take over the housing trust fund currently overseen by the Mortgage Finance Authority. That bill failed to pass the Legislature. The legislation this year keeps the fund in the MFA’s control.
In addition to the housing office, Lujan Grisham is asking lawmakers to spend $500 million toward creating housing and making it more affordable.
That means a $250 million appropriation to the housing trust fund, plus another $250 million into the Opportunity Enterprise Revolving Fund, which would help local governments and businesses pay for housing infrastructure and housing aimed for those who can’t afford it but also earn too much income to qualify for state or federal housing subsidies.
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