House representatives pave way for big investment in middle-income housing
Nine Republicans join the Democratic majority to approve law that governor also supports
A light glows in an occupied apartment at the Hotel Clovis in Clovis, New Mexico in February 2022. (Patrick Lohmann / Source NM)
The New Mexico House of Representatives on Tuesday approved by a wide margin a bill that would allow a state program that now helps support commercial development to add housing to its portfolio.
The change to the Opportunity Enterprise Act, which would become the Opportunity Enterprise and Housing Development Act, would mean the New Mexico Finance Authority could make loans to help build, acquire and rehabilitate housing projects. At the moment, the act only allows commercial development.
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.
“We have a real lack of supply in the housing market right now, and especially for projects that are affordable, not necessarily ‘affordable housing,’ per se, but housing that is affordable for middle-income earners,” said bill sponsor Linda Serrato (D-Santa Fe). “And so what this fund would do is it fills that gap.”
The $10.18 billion budget approved last week by the state House of Representatives includes $175 million for the Opportunity Enterprise Revolving Fund, including $75 million specifically for housing development.
Its inclusion in the state budget is contingent on the Legislature approving House Bill 195, which was debated Tuesday.
House lawmakers approved House Bill 195 by a vote of 50-16.
It drew more than two hours of debate. 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.
Rep. Rod Montoya (R-Farmington) introduced an amendment to restrict any loans to housing that would be affordable to those who make less than 250% of the area median income.
The bill as written just includes the phrase “low- or moderate-income residents without defining it.” Montoya’s amendment would also include penalties to developers who didn’t rent or sell housing to residents making less than the specified income.
“It seems like the developer will have the opportunity to develop these homes, get a break on developing these homes, and then can charge the maximum amount,” Montoya said of the current bill. “I’m not sure how that helps where we believe the need is, which is the lower-income folks.”
Serrato responded that the housing loans will be targeted for those with low and middle incomes, but, with rising incomes across the state, a hard cap on incomes would make it hard to keep the program flexible enough to fund housing for a wider range of incomes.
Three Republican amendments, including Montoya’s, were not adopted. Nine Republicans joined 41 Democrats to move the bill forward. The legislation now heads to the Senate.
Gov. Michelle Lujan Grisham supports the legislation. However, her executive budget request asked for a $250 million appropriation to the fund.
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