High House Prices Halt Growth In ABQ

Albuquerque residents are finding it more and more difficult to locate affordable housing as rates skyrocket here and across the nation. Will local families have to give up their dreams of owning a home and settle for living as permanent renters?

Bernalillo County resident Robin McBroom says that she has been unable to find an affordable home—despite having no debt, a credit score that’s graded as “excellent” and a healthy down-payment ready to go. She says that even when she finds a home she loves, the price is often significantly higher than it was last year and the homes are being sold at sums well above the asking price.

“There’s no place for regular working people to move to today whether they are buying or renting. What will Albuquerque look like three years from now?” she says.

McBroom seems to have accepted that she will have to rent for the time being, but finding affordable rental spaces is also proving troublesome. “A month of searching has revealed that rentals are going for $700 a month per 400 square feet with few amenities and a strong likelihood of being in an undesirable location,” she says.

According to the National Low Income Housing Coalition, 33 percent of Albuquerque residents were renting in 2021. For a one-bedroom apartment at the fair market rental rate of $775 per month, a minimum wage worker would have to put in 56 hours a week just to share rent. The estimated average wage in Albuquerque is around $13.87 per hour, meaning the average renter would have to work around 43 hours a week to afford rent for a one-bedroom apartment.

Corporate Housing Issues

McBroom is far from alone in her struggle to find housing, and the influx of major corporate employers in the Albuquerque area means even more families will find themselves in a housing jam over the coming years.

According to REBusiness Online, Albuquerque faces a major housing shortage in the near future due to the expansions of companies like Intel, Netflix, Facebook/Meta and Amazon—which are estimated to bring nearly 9,000 new jobs to the Albuquerque Metro area. The area’s current market is absolutely not equipped to handle the strain. It is believed that the city will need an additional 14,500 more multifamily units and 25,600 more single family units to meet the coming demand.

That means prices are about to get even higher.

Not Just a Local Problem

The entire nation is feeling the pinch—not just Albuquerque. A recent report from Harvard University’s Joint Center for Housing Studies found that 85 percent of large metro areas experienced significant housing price increases over the last year. This price jump is disproportionately affecting low-income households that are already feeling economic pressure from inflation, the rise of gas prices and the loss of pandemic-related government assistance.

Home-price appreciation nationwide hit 20.6 percent in March, compared to the previous high of 20 percent in August 2021. According to the report, it was the largest price spike “in three decades of record keeping.” Rent across the nation went up 12 percent over last year in the first quarter with increases exceeding 20 percent in some metro areas.

The causes behind these nationwide price hikes aren’t immediately clear. Even cities with high vacancy rates are seeing rent prices go up.

The pandemic can be blamed for some of the problems. Supply chain failures have led to a dramatic increase in repair costs for property owners that have trickled down to consumers. The large number of businesses that have pivoted to work from home has also led to an increase in space needed for home offices.

But these factors have been compounded by investment firms that have been taking advantage of the housing crisis while simultaneously making it much worse. Investors buy homes—sometimes entire neighborhoods—to sell or rent. Every home purchased in this way increases scarcity and drives up the price. According to The Washington Postinvestors bought nearly one in seven homes sold in America in 2021. Homes located in predominantly Black neighborhoods are disproportionately targeted—30 percent of home sales in Black neighborhoods in 2021 were reportedly made to investors, compared to 12 percent in other neighborhoods.

During a February hearing for the Senate Committee on Banking, Housing and Urban Affairs, committee chair Sen. Sherrod Brown (D-Ohio) described how these investment firms are damaging the housing market. “They bought up properties, they raised rents, they cut services, they priced out family home buyers, and they forced renters out of their homes,” he said.

Can It Be Fixed?

Things are looking dire for the future of Albuquerque’s housing market, but local leaders can help ease some of the pressure by altering the city’s zoning regulations to allow for greater residential density and more lenient height requirements.

The city adopted the Integrated Development Ordinance in 2017, which does allow multi-family development in much of the city, but does not automatically allow detached accessory dwelling units with kitchens—small living units located on a single-family lot in addition to a home . Height limits also make it tougher to develop smaller apartment complexes and low-rent housing units.

Another answer is for private property owners to become less discriminating against renters who can only pay with federal housing subsidy vouchers—through personal conviction or legislation. These vouchers will cover rent for those who can’t afford housing, but in New Mexico, landlords are not required to accept them. Because of this, many viable renters are blocked from renting even when they can afford it.

Last month reporters asked Albuquerque Mayor Tim Keller what his administration was doing to help with housing affordability. A spokesperson for the mayor’s office said that the administration is tackling the problem through the implementation of Tax Increment Development Districts and other programs. The city has reportedly budgeted $11.8 million for rental vouchers for the current fiscal year.

Leave a Reply

Your email address will not be published.