Nearly two-thirds of New Mexico’s affordable housing units are occupied by people who could afford more expensive homes, according to a new state analysis that also quantifies a shortage of at least 50,000 units for low- and moderate-income households.
A New Mexico state analysis found that 65% of affordable housing units are occupied by residents who could afford pricier homes, while the state faces a shortage of at least 50,000 units for households earning 30% to 150% of area median income. About 60% of households in this range are cost-burdened. Officials attribute the mismatch to market dynamics rather than misconduct.
The New Mexico Office of Housing presented these findings alongside a request for approximately $97 million in the upcoming legislative session, primarily to help close the financing gap between construction costs and affordable pricing for developers. Officials outlined seven policy priorities, including zoning updates, improved data collection, and gap-financing subsidies to encourage new affordable housing construction.
Leaders of the New Mexico Office of Housing presented the findings Wednesday along with a request for roughly $97 million in the coming legislative session, most of it aimed at closing the financial gap that keeps developers from building more affordable apartments and houses.
The analysis shows that 65% of affordable housing across the state is owned or occupied by people whose incomes would allow them to pay more. Statewide, New Mexico lacks at least 50,000 units affordable to households earning between 30% and 150% of area median income — a range that covers two-person households earning roughly $24,100 to $120,500.
About 60% of households in that income band are cost-burdened, spending one-third or more of their income on housing.
Construction costs illustrate the problem. Building a single apartment in a multifamily development in Albuquerque now costs a developer about $348,000, according to Lisa Huval, the office’s housing initiatives manager. To remain affordable to a tenant earning 80% or less of the city’s median income, that unit would need to cost no more than $275,000.
“That difference between those two numbers is really what is driving our housing shortage,” Huval said.
A concrete example of the mismatch: Of the 136,000 occupied housing units in New Mexico that are affordable to households earning 50% or less of area median income, 36% — roughly 47,000 homes — are occupied by people earning more than the area median.
Department of Workforce Solutions Secretary Sarita Nair, whose agency administratively houses the Office of Housing, described the pattern as a natural market dynamic rather than misconduct.
“This is not people doing bad things. This is the natural dynamic,” Nair said. “I myself live in a unit that’s affordable to a lower income than I make. And I own it, and I’m never moving.”
The disparity appears in both ownership and rental markets and underscores the need for more housing of different types across the income spectrum, officials said.
The Office of Housing has been attached to the Department of Workforce Solutions since 2025. Lawmakers have already provided it with more than $100 million for housing and homelessness programs.
Nair and Huval outlined seven policy priorities developed after interviews and analysis with an outside consultant. They include boosting local government capacity, updating zoning codes to speed permitting, preserving existing affordable units, improving data collection, and using state subsidies to fill financing gaps that prevent new construction.
Of the nearly $97 million sought for the next fiscal year, the largest share would support “gap financing.” That includes $50 million in grants to developers and $30 million in capital outlay.
“Our hope is that over time less and less subsidy is needed for affordable housing for low- and moderate-income folks,” Huval said. “For now, we believe we need to continue to invest in or deploy grants that close that gap between what it takes to build housing and then what a low-moderate income household can afford to pay.”
The request and the mismatch findings will go before lawmakers in the upcoming session as the state continues efforts to expand housing supply.
