As a 20-something waiting tables in Cambridge, Mass., in the early 1980s, I hit the jackpot when I scored a rent-controlled two-bedroom apartment in a fourplex in the vicinity of Central Square, a poor and diverse neighborhood in the progressive city.
The place was a dump. So, after a time, and with a girlfriend to impress, I rented a floor sander, refinished the wood floors, painted the entire place, retiled the bathroom tub surround and landscaped the micro backyard.
It gleamed. It also set me back a few months’ rent.
Thinking it would also impress the landlord, a guy I never met in the four years I lived there, I called and asked to skip rent for a month since I’d improved the value of his apartment. He burst out laughing. It was a hard lesson on the flip side of my good fortune. There was no improving the unit’s value. The rent was controlled.
A decade later, in 1994, Cambridge famously and controversially ended rent control. The equity value of the city’s rental property increased $2 billion virtually overnight. That increase in landlord wealth stimulated a massive increase in property improvements and the building of many new housing units.
With Santa Fe rents becoming even more out of reach for wage earners, there is increasing clamor for rent control. Unfortunately for control advocates, New Mexico is one of over 30 states that prohibit cities from instituting rent control. Ironically, for those who want rents to stabilize or even go down, that prohibition is a good thing.
That seeming contradiction is because rent control chills construction of new housing. The only way to stabilize and lower rents is to build more housing. Lots more. And fast. This reality is acknowledged by an overwhelming majority of economists of every stripe, even those who embrace the politics of democratic socialism.
There are workarounds to New Mexico’s rent control restrictions, and Santa Fe plays the game better than most. It’s called inclusionary zoning and applies to multifamily apartments for rent and homes for sale in new subdivisions. We’ve been doing it for homes for nearly 20 years. It has put homeownership in the hands of hundreds of families who would otherwise not have them.
Now we need to see inclusionary zoning flourish in the multifamily rental realm. New rules passed by the city in December could see that happen. Those rules give developers options for compliance. Some mandate 15 percent of total units be set aside with controlled rents, some allow for controlled rents but at higher income levels, and some can choose to pay a fee into the city’s Affordable Housing Trust Fund.
That fund, if constantly replenished in a predictable fashion as the mayor’s task force on housing affordability has recommended, can be used in a variety of creative ways: down payment assistance for homeownership, home repairs for elderly on fixed incomes, housing vouchers to top off payments of unaffordable rents, and infrastructure grants to new affordable housing projects, to name a few.
As with every proposed housing development in Santa Fe, the first priority is to get surrounding neighborhoods on board or at least quieted down. The second is to prove to these neighbors that traffic increases are not the end of the world and that where the water is coming from is a question that has answers based on facts.
A new challenge emerging to the idea of building our way out of the housing shortage crisis is a planning commission that apparently believes increased traffic is destroying the quality of life in Santa Fe. It’s not and never has. Approving new projects with lower rents will increase our quality of life. It’s the only thing that will.
Kim Shanahan is a longtime Santa Fe builder and former executive officer of the Santa Fe Area Home Builders Association.