Governor tries to save proposed Housing Office by making rare appearance at committee meeting

New Mexico Mortgage Finance Authority opposed the bill, as did some housing nonprofit leaders

By: - February 8, 2024 7:54 am

Gov. Michelle Lujan Grisham, left, with Sen. Michael Padilla, D-Albuquerque, and Daniel Werwath, a housing policy adviser, speak to lawmakers in favor of a housing bill Feb. 8 (Photo by Eddie Moore / Albuquerque Journal)

Gov. Michelle Lujan Grisham made a surprise appearance in a Senate committee meeting Wednesday night, a last-ditch effort to save a major component of her strategy to address the state’s housing crisis. 

The Senate Health and Public Affairs Committee heard legislation to create an “Office of Housing” within the executive branch, one that the governor said would help coordinate numerous housing programs across state entities and develop a comprehensive plan to address housing shortages. 

The state lacks about 32,000 units to house all New Mexicans who need it, according to recent estimates, including those living on the streets and also renting families unable to afford their first homes. 

Despite the governor arriving in person to defend the legislation – and then staying to field questions for the three-hour debate – the committee voted against it 5-4. 

The committee did, however, approve sending Senate Bill 71 along, but it did so “without recommendation,” which means it can still continue through the legislative process but the committee did not endorse it. It’s now headed  to the Senate Finance Committee, where it will face another test in the short session’s final days, and then it will have to clear the House.

Senate Majority Whip Michael Padilla sponsored the legislation. Before Wednesday, Padilla (D-Albuquerque) pulled the proposal twice from the committee’s schedule before it could get a hearing, saying he wasn’t sure it had enough support. 

This is the first time since 2019 New Mexico’s governor descended from the fourth floor at the Roundhouse to defend a bill before a committee in person. Joining her in front of the committee were Padilla and Daniel Werwath, a recently hired housing adviser to the governor.

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

Opponents who spoke publicly at the committee hearing were housing nonprofit leaders who said they and their clients weren’t consulted about the plan and that housing money overseen by a state agency has been slow to arrive. 

They also criticized the governor’s Housing Investment Council, which developed Lujan Grisham’s 2024 housing legislation proposals in meetings last year, for not being transparent. 

A review by Source New Mexico found that the council did not create bylaws, produce minutes or invite members of the public for meetings. Officials with the governor’s office said the council, which includes developers, lawmakers and those who advocate for the homeless, is not required to do so.

The governor’s proposal also received stiff pushback this session from the New Mexico Mortgage Finance Authority. Leaders, while stressing in interviews that they were happy to collaborate with the governor’s office, said the bill presented to the committee was duplicative and overreaching. 

Lujan Grisham said a housing office would help the state tackle the crisis head on, allowing the governor to hire three or four employees paid with her office’s budget. Her budget asks for $1 million to cover salaries and start-up costs.

The housing office employees would be tasked entirely with analyzing data and assisting local governments, including the Mortgage Finance Authority. It would also apply for federal grants and try to spur development affordable to those who make too much to qualify for state and federal housing programs but not enough to afford a home in the communities where they work. 

“If we don’t move faster – and that’s going to take everyone rowing together – we aren’t going to make the right dents that we need to,” Lujan Grisham told the committee Wednesday. 

‘I have been heavily lobbied’

Lawmakers on the committee described a huge letter campaign against the bill and being pressured to vote against it as they walked through the Roundhouse in recent days. “I have been heavily lobbied that this is a duplicate activity,” said Sen. Martin Hickey (D-Albuquerque).

The Mortgage Finance Authority is a quasi-governmental authority led by a director and a board and employs its own lobbyist. It is not under the governor’s direct control, but she appoints four of seven board members.

One of the governor’s appointees, Angel Reyes, told Source New Mexico in an interview Tuesday that the authority was working closely with the governor’s office to ensure the legislation did not reinvent the wheel. 

“For 49 years, MFA has really supported the whole spectrum of housing, from homelessness to homeownership, and I think that there are programs and ideas that are within that legislation that involve the same type of activities that we’re already doing,” said Reyes, who is the MFA board chair. “And rather than be specific on those things, I think what’s important is, our team is working with the governor’s office.”

Reyes did weigh in on two aspects of the legislation. 

Supporters of an Office of Housing speak in favor Wednesday evening in the committee room of the Senate Health and Public Affairs Committee. (Photo by Patrick Lohmann / Source NM)

One would require the office to create an annual housing plan, including publishing a statewide housing inventory, an analysis of zoning effects and strategies to overcome housing inequities and discrimination. But in September 2022, the MFA published a 294-page “housing strategy,” Reyes said. 

“We’ve already created that plan,” he said. 

And the bill would allow the new director of the office of housing to join the MFA board as a nonvoting member. Reyes noted that the current board includes the lieutenant governor. 

“What exists is a structure that’s functioning quite well,” he said. 

The authority has been New Mexico’s designated housing agency since 1998 and has more than 120 employees. It oversaw nearly $600 million for housing of low- and moderate-income residents in 2023, according to the authority

‘The office of housing shall only…’

Earlier this week, Source New Mexico obtained an informal substitute bill the MFA sent as a possible compromise to the governor’s office. It gutted most of the provisions of the legislation debated Wednesday by eliminating the office’s charge to create an annual housing plan and getting rid of the provision allowing the office’s director to have a non-voting seat on the MFA board. 

The potential substitute also laid out fewer potential duties for a new housing office, beginning the list of responsibilities with “The office of housing shall only…” and including things like creating zoning recommendations, preparing a building inspection study and coordinating with other “state departments” to improve housing “within their existing authority.” 

Maddy Hayden, a spokesperson for the governor’s office, said the office received a substitute bill from MFA on Tuesday afternoon seeking to call the housing office the “Office of Community Development,” which she said “is confusing and does not adhere to the intention of the bill.” 

Governor’s push for state housing office on hold for now

She also said the use of “only” in describing the bill is “unusual and would not be acceptable language.” 

The governor’s office apparently did not accept the substitute sent by the Mortgage Finance Authority.

Werwath, under questioning by committee members, said adding the Housing Office director to MFA the board was necessary to improve collaboration and prevent duplication. He also said the Housing Office’s annual plan would zero in on policy solutions that the office could then work to implement.  

And the governor tried to refute any suggestion that the legislation was an attempt to wrest control or funding from MFA, saying her bill was “not a takeover.” As proof, she noted that the executive budget recommendation included $250 million for the MFA’s Housing Affordability Trust Fund, which would be by far its biggest-ever appropriation. 

“I don’t know the last time you’ve seen a governor put in hundreds of millions of dollars in requests to another entity that I don’t have direct control over,” she said. 

‘Unrealistic expectation’

Sen. Gerald Ortiz y Pino (D-Albuquerque) chairs the committee and cast the decisive vote against passing the proposal with a “do pass” recommendation. He voted against sending the bill forward at all in the second vote, as well. 

He said the governor and Werwath described the office handling multiple programs and strategies already under MFA’s purview, and he thought it was taking too much on. 

“These three people that are going to be hired are going to do everything that MFA does plus the other things?” he asked. “ I just think you’re creating an unrealistic expectation for what this office is going to be able to do with three people.”

The governor responded that the office empowers her administration to embrace all possible solutions to the housing crisis. 

“I think collectively, it’s fair to say that we don’t have enough housing solutions,” she said. “So unless we decide in statute that we are going to do every solution, what would anyone in the state of New Mexico think would be different?”

Ortiz y Pino and Sen. Bill Tallman (D-Albuquerque) joined the three Republicans on the committee – Gregg Schmedes (Bernalillo), Greg Nibert (Roswell) and Steven McCutcheon (Carlsbad) – in voting not to pass the bill. Tallman later changed his “no” vote to “yes” to allow the bill to move to the next committee but without a recommendation. 

In addition to the housing office, lawmakers this session are considering major investments in improving the housing supply across the state for residents across the income spectrum. 

This week, the House voted to allow a fund overseen by the New Mexico Finance Authority to make loans for housing developments, and they recommend a $75 million appropriation to the fund for housing projects. 

The House budget also includes about $45 million for the Mortgage Finance Authority’s housing trust fund. 

What the MFA wanted in an Office of Housing*:

 

 “The Office of Housing shall only…”
  • Prepare a planning and zoning study and recommendations in collaboration with local governments
  • Prepare a permitting process study
  • Prepare a building inspection study
  • Develop programs and incentives for increasing and educating building workforce
  • Coordinate across state departments to implement actions for housing or supporting housing services within their existing authority, and
  • study and publish factors leading to housing insecurity, housing cost and housing affordability

*According to draft substitute bill obtained by Source New Mexico

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Patrick Lohmann
Patrick Lohmann

Patrick Lohmann has been a reporter since 2007, when he wrote stories for $15 apiece at a now-defunct tabloid in Gallup, his hometown. Since then, he's worked at UNM's Daily Lobo, the Albuquerque Journal and the Syracuse Post-Standard.

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