If you want to buy your first home in New Mexico, and you are of low to moderate income, you probably should not count on buying a new one.<\/p>\n
According to one of the state\u2019s leading experts, New Mexico builders cannot build a house today for less than $250,000. A person of modest means can\u2019t afford that. A person who can afford that amount makes too high an income to qualify for help from the agencies that are set up to provide that help.<\/p>\n
So says Jack Milarch, CEO of the New Mexico Home Builders Association and one of the most trustworthy people I know.<\/p>\n
Affordable housing is a great need and a very worthy goal for New Mexico, but Milarch says the numbers need to be tweaked before builders can get to work.<\/p>\n
Milarch wrote an article a few months ago, cautioning about proposed changes in the construction conservation codes to make houses more energy efficient. Incorporating those changes not only adds to the direct cost, he said, it also tacks on supplemental costs like additional gross receipts tax and increased future property tax. And the long-term savings take many decades to be recouped.<\/p>\n
Homeowner\u2019s insurance has emerged as another serious obstacle. If the house costs more, so does the insurance. Prices are increasing dramatically (see the column by my colleague Diane Denish), but some prospective homeowners can\u2019t get insurance at any price. Insurance companies are refusing to cover some properties at all as a result of increasingly severe damage caused by climate events.<\/p>\n
In a recent conversation, I asked Milarch what happens when family and medical leave are added to this mix. The answer was no surprise. It also adds cost, which has to be passed on to the consumer.<\/p>\n
We are all both earners and spenders. Ironically, when benefits to workers increase, like family and medical leave, those same workers are disadvantaged when, as consumers, they try to buy a house.<\/p>\n
Two very simple and obvious truths:<\/p>\n
First, not all business owners have deep pockets. Some builders are small family businesses. Nobody should assume that they can afford these additional costs.<\/p>\n
Second, at the end of every transaction is the consumer. In this case, it\u2019s the home buyer. Builders can\u2019t build what buyers can\u2019t afford to buy.<\/p>\n
Last May, Gov. Michelle Lujan Grisham signed an executive order creating a Housing Investment Council with a mission to bring New Mexico\u2019s affordable housing development up to pace to meet demand in the state. The chair of the council is former House Speaker Brian Egolf.<\/p>\n
The council\u2019s work begins at a crucial moment as average rent in the state has increased by 70% since 2017 but wages have only grown by 15%.<\/p>\n
Grisham said her goal is to have 30,000 houses a year built, with activity in every community.<\/p>\n
The Home Builders Association is represented on that council. I hope other members of the council are listening.<\/p>\n
At the same time, the state\u2019s Mortgage Finance Authority (MFA) offers help with downpayment for first-time homebuyers.<\/p>\n
A homebuyer is not necessarily buying a new house. Milarch says the first-time homebuyer probably will have better luck finding an existing house. The MFA offers a great deal of information on its web site, housingnm.org.<\/p>\n
Looking at this from a long-range perspective, it appears to me that our society is reaching a point of reckoning with the wealth gap that has been increasing for the past four decades. Energy-efficient housing benefits not only the individual homeowner but the whole world, and we are all a little worse off when homeowners can\u2019t afford it. I believe we will have to find creative new ways to shift the balance, and that will be a rough ride.<\/p>\n
\u00a9 2024 NEW MEXICO NEWS SERVICES\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/em><\/p>\n","protected":false},"excerpt":{"rendered":" If you want to buy your first home in New Mexico, and you are of low to moderate income, you probably should not count on buying a new one. According to one of the state\u2019s leading experts, New Mexico builders … Continue reading