The city of Santa Fe is at a crossroads regarding a new apartment project in Tierra Contenta, with potential implications for the local Affordable Housing Trust Fund. The project, known as Zorro Blanco, consists of 165 units and was approved by the Santa Fe Planning Commission on October 16, 2023. However, it was sanctioned without the typical affordability requirements, raising concerns among housing advocates and developers alike.
In the context of the ongoing housing crisis, the Tierra Contenta development was initially intended to offer affordable housing options. The latest phase, to be largely constructed by Homewise, aims to enable more families and individuals to purchase homes. Despite the project’s approval, city staff recommended that no affordability guidelines be applied. This decision contradicts the very purpose of the development, which was rooted in providing affordable housing solutions.
The situation becomes more perplexing as the developer, Zydeco 66, is prepared to pay a fee-in-lieu of physical affordable units amounting to just over $684,000. This sum would be a significant boost to the Affordable Housing Trust Fund, exceeding the current Community Development Block Grant allocated by the U.S. Housing and Urban Development Department. The money would also dwarf the $59,000 generated from the city’s mansion tax, underscoring the missed opportunity for bolstering local housing initiatives.
Mike Loftin, CEO of Homewise, criticized the city’s reluctance to accept the fee, emphasizing that it would not only support affordable housing construction but also help maintain the homes of current residents. Loftin pointed out that the interpretation of existing statutes by the city’s staff and the outgoing City Attorney, Erin McSherry, is flawed due to the ambiguity surrounding the regulations.
The crux of the issue lies in which ordinance applies to the new apartments at 7205 Plaza Central, located just east of N.M. 599. Initially designated for commercial development, the land has shifted to residential use without clear affordable housing mandates. City staff indicated that since the second phase of Tierra Contenta met affordability guidelines, the new apartments were exempt.
Nevertheless, the Santa Fe Homes Program exists to require multifamily housing developments to allocate 15% of units as affordable or contribute a fee to the Affordable Housing Trust Fund. City staff had initially encouraged compliance with this program but later claimed that the annexation agreement for Tierra Contenta exempted the project from these requirements.
This indecision has left developers, such as Zydeco 66, in a state of uncertainty. The Tierra Contenta board has expressed its support for accepting the fee-in-lieu payment, specifically asking that the funds be directed towards future affordable housing projects within the development. However, the board has also stated that the annexation agreement does indeed allow for compliance with the Santa Fe Homes Program guidelines, countering the city staff’s interpretation.
The implications of this decision extend beyond the current project. Not requiring compliance with affordability guidelines could necessitate a higher percentage of reasonably priced homes in future phases of development to meet the overall requirement of 40% affordable housing for Tierra Contenta.
In light of these developments, it is crucial for the city of Santa Fe to reconsider its stance. No housing project should proceed without integrating affordability measures. City staff ought to appeal the Planning Commission’s decision to the City Council. If this course of action does not materialize, Homewise plans to appeal, and Loftin has indicated that a lawsuit could follow if the nonprofit builder is denied the right to do so. Such legal actions would further delay the much-needed apartments.
The city of Santa Fe is faced with a vital decision that could significantly impact its housing landscape. Accepting the fee-in-lieu payment from Zydeco 66 would not only enhance the Affordable Housing Trust Fund but also affirm the city’s commitment to addressing affordable housing needs. It is essential to prioritize these developments over bureaucratic hurdles to foster a more inclusive community.
