Show business is bringing jobs, tourism, and a housing boom to New Mexico. Industry giants like Netflix, Facebook, and most recently NBCUniversal, have been setting up shop in the Land of Enchantment since 2017. This influx of out-of-state buyers is helping the economy but making it harder for local homebuyers to compete in New Mexico’s low inventory housing market.

NEW BUSINESS HELPS REDUCE NEW MEXICO’S RELIANCE ON FEDERAL FUNDING

The construction of Netflix’s campus and Facebook’s data center in Albuquerque have been instrumental in boosting local job availability. Netflix’s project is estimated to create 1,000 production jobs over the next decade in addition to an abundance of construction jobs.

“I’m glad Netflix has chosen to double-down on its commitment to our state,” Governor Michelle Lujan Grisham said in a statement. “Our partnership will continue to grow for the benefit of New Mexicans across the board.”

Businesses are developing throughout the state as well to support the growing entertainment industry. Economic Development Secretary Alicia J. Keyes notes, “This is all outside money coming into the state, which would not be here otherwise.” This is good news for a state that previously relied heavily on federal funding and oil and gas development to drive its economic growth.

While New Mexicans are benefiting from the increase in jobs and the boost to the local economy, they are being edged out of the real estate market by out-of-state homebuyers with more cash to spend.

OUT-OF-STATE BUYERS DEPLETE NEW MEXICO’S AFFORDABLE HOUSING INVENTORY

The housing supply in areas around Albuquerque, where Facebook and Netflix are stationed, is dwindling. “A good number of listings for us to have is 4,500 to 5,000,” said Albuquerque REALTOR® John Lopez. “So when I go to the MLS that we have and I just open it up under single-family residence, I have 955 homes for sale.”  In January, Albuquerque and Rio Rancho had just 650 homes available.

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Compounding the issue is the “Zoom boom”, an influx of remote workers seeking less expensive housing amongst the southwest’s beautiful landscapes. More competition for homes is driving prices up. The New Mexico Association of REALTORS® (NMAR) CEO Steven Anaya notes, “October [2020] median home prices represent an over $40,000 increase since January 2020’s median of $219,500.”

AFFORDABLE HOUSING TRUST FUND HELPS LOCAL HOMEBUYERS

Rising home prices are leading to an affordable housing shortage for local homebuyers. To address this concern, the city of Santa Fe is relying on the Affordable Housing Trust Fund. Money from this fund can be used for a variety of things including rental assistance, the development of affordable housing, and homeownership assistance.

The trust is funded primarily through fees paid by developers. Alexandra Ladd, notes in an article for The Guardian: “diversifying how the trust is funded could help it become more useful.” As it is now, funding is tied to economic vibrancy – a downturn in the economy can lead to a lack of funds.

The Santa Fe Housing Coalition is considering two additional sources of support to stabilize the fund.

• A Real Estate Transfer Tax: Attaching a fee to property taxes could bring in over $1 million annually.
• Removal of Property Tax Cap: Short-term rentals have contributed to the rising housing costs in Santa Fe. The Coalition has proposed removing the 3% cap on property taxes for second homes and using some money made on short-term rentals to further support the Affordable Housing Trust Fund.

While New Mexico’s affordable housing supply has certainly been challenged by the influx of large companies like Netflix and Facebook, local officials are making moves to ensure homeownership is affordable to both native New Mexicans and out-of-state buyers.

Source: "HOW NETFLIX IS MAKING THINGS TRICKY FOR NEW MEXICO HOMEBUYERS"