Editors’ pickReal Estate

Building up Santa Fe’s multifamily housing inventory

With as many as 2,155 apartment units either proposed or under construction in Santa Fe, observers have different views on what role these large projects will play in Santa Fe’s housing crisis.

Or is it crises, plural?

Santa Fe faces ultra-tight housing availability and high rental rates — a double-whammy that plagues the city on a variety of social and economic levels, experts say. The arrival of new apartments, lots of them, will shake up that paradigm, though exactly how no one can say for certain.

“Bringing in these market-rate apartments will free up more affordable units,” said Alexandra Ladd, the city of Santa Fe’s housing special projects manager. “Existing apartments will have to bring rents down a little bit. Higher-income renters [in existing apartments] will move to nicer apartments and this frees up units not available now to lower-income renters.”

Only three large-scale, market-rate apartment projects have emerged in Santa Fe since 2004, the year the city imposed an affordable housing ordinance requiring 15% of units to be affordable, later softened to allow developers to pay an in-lieu of fee instead supplying affordable units.

But big apartment projects are lining up for construction starts later in 2019 and 2020 in Santa Fe — one promising 355 units, a pair at 240 units and another pair at 180.

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The largest apartment project now under construction is Broadstone Rodeo, 1475 Rodeo Road, with 188 units planned for a March completion.

That’s good news for some, and others hope it will have a ripple effect for those already struggling to afford their current dwellings.

“My hope is some of the [existing] apartments with fewer amenities will be able to lower rents,” said Carolyn Luna-Anderson, former executive director at the Life Link, a behavioral health program that provides supportive housing. “When we have had occupancy rates less than 97%, we had landlords willing to reduce rents by $10 or $25.”

Luna-Anderson noted an “absolute real shortage of rental housing.”

“The biggest thing is any type of rental housing is important anywhere for market-rate, senior housing; that can help the community,” Luna-Anderson said. “We need all types right now. We need a whole array of different types of housing.”

Still, the mathematics of several hundred or even a thousand new apartments potentially lowering rent costs at some existing apartments doesn’t necessarily compute for Ed Romero, executive director of the Santa Fe Civic Housing Authority.

“We will continue to struggle to find enough affordable units needed in this town,” Romero said. “It’s hard to lower rents. I think we still need to address building more affordable apartments.”

Santa Fe issued building permits for an average of 60 apartment units a year between 2010 and 2015 after permitting about 150 units a year during the 2000s, according to a February 2018 housing market profile by the U.S. Department of Housing and Urban Development.

The math adds up to a widely acknowledged shortage of about 6,000 apartment units in Santa Fe, said Todd Clarke, broker at New Mexico Apartment Advisors.

Madera Apartments is poised to be not only the largest complex in Santa Fe but also only the third multifamily community with more than 300 units outside Albuquerque, which has two dozen 300-plus unit complexes.

Madera will have 20 two-story buildings in Santa Fe Pueblo style near the Santa Fe River Trail, a paved pathway for bikes and pedestrians. Project developer Carlos Garcia hopes to start construction in spring 2020 and have the first units available by fall 2020.

“It’s all about the timing,” said Garcia, who is managing partner at NAI Maestas & Ward’s Santa Fe commercial real estate office.

Garcia did not have rental rates set, but indicated the units — a mix of sizes — will not be too costly.

“It’s going to be market rate,” he said. “We want to have it affordable for people to live here.”

Garcia specifically chose a location at the edge of town, north of the Santa Fe River, for Santa Fe’s largest complex.

“There is great access for 599,” Garcia said. “It’s a natural path to access downtown and other parts of town so we don’t congest other streets in Santa Fe.”

Garcia said he believes Santa Fe is ripe for multiple large-scale apartment projects.

“There is a need to build apartments,” Garcia said. “Our local market is still behind on supply for the demand we have.”

Just a block or so to the west, South Meadows Apartments is lining up for a fall construction start with move-ins starting in the summer of 2020 at the 240-unit complex with one-, two- and three-bedroom units in 10 three-story buildings. There will also be a community building with fitness room and resort-style pool, said Peter Kerwick, vice president of Storm River Development, the project developer.

Nationally, analysts are expecting a slowdown in apartment construction this year, but Santa Fe is ramping up.

“The coming multifamily projects, including South Meadows Apartments, will be very helpful to the community by providing much needed new housing,” Kerwick said.

Also at 240 units, Turquesa Apartments will be in the heart of Santa Fe’s national retail district, directly behind Santa Fe Place mall. The project is expected to break ground this summer with a 2020 completion, said Jennifer Jenkins, a principal in the Santa Fe project management firm JenkinsGavin in Santa Fe.

JenkinsGavin is working on four Santa Fe apartment projects, including the 52-unit Rancho Vizcaya III apartments near Sawmill Road and St. Francis Drive.

“Everything I’m working on is moving forward,” Jenkins said. “Everything should be under construction this year.”

“Believe it or not, the Planning Commission said we did not demonstrate that there was a need for this much housing,” said Eric Faust, who with his brother Kurt Faust, both at Tierra Concepts, are developing Acequia Lofts. “The City Council denied it because the neighbors came out against it.”

“It’s market rate but affordable for working people,” Kurt Faust said. “We’re in the final stages of putting together our final budget. We lost our perfect window four years ago. We’re struggling to figure out how to make it all work.”

Tribune Content Agency

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