Jennifer Johnson moved into her Ft. Marcy Heights neighborhood off Bishops Lodge and Hyde Park roads in 2000. She no longer sees as many familiar faces.

“The number of neighbors who are there full-time has reduced dramatically,” she tells SFR. “Let’s see … one, two, three, four homes that were Santa Feans before have been converted into condos,” each of which has at least three units.   

For safety and presumably to welcome guests, the short-term rental across the street has its front porch light on all night. But it's starting to feel kind of lonely to Johnson.

“I don’t have any neighbors there. And then even more [houses in the neighborhood] turned into second or third homes,” she says.

So on March 14, Johnson spoke in public about Santa Fe's housing situation and the impact of second homes and short-term rentals.

"It's not helping the day-to-day New Mexicans that need a place to live," she told the City Council. "In my immediate neighborhood, there's nobody there to fight for our neighborhood."

An SFR check of ownership records shows that of the 10 properties on the two split lots closest to Johnson, only one can be definitively traced to a Santa Fe owner. A South Carolina owner has the vacation rental outside Johnson's front door. Other owners are in Arizona, Massachusetts, Texas, Virginia and Washington, DC.

Of the 973 short-term rental permits issued by the city so far this year, 436 were issued to out-of-state owners. That's 45 percent. The vast majority are clustered in and around Santa Fe's downtown.

A 2016 change to city law brought illegal short-term rentals into compliance and created a tax base for the city that will pull in well more than $1 million this fiscal year. It also nearly tripled the allowable number of vacation rentals.

At the city's Land Use Department, planner Noah Berke says it might be tempting to blame the lack of long-term housing downtown for Santa Feans on these revolving doors, but he doesn't see the math as being that straightforward.

"It's hard to pinpoint what short-term rentals are doing to the market for long-term rentals," Berke says. Not every short-term rental would be available for locals if it weren't on the market for tourists. Some would sit vacant until owners were able to use them. "There are certainly a number of second homes that aren't being used for either short-term or long-term rentals. … They just sit there."

City Councilor Renee Villarreal represents District 1, which includes most of downtown and the city's north side. She feels as though out-of-state, or at least out-of-town ownership has been a problem for three decades or more, guessing that living patterns started to change in the 1980s. That was when the city should have stepped in more aggressively.

“I think it’s been a problem for quite a while and we didn’t nip it in the bud when it became a thing,” she tells SFR. As short-term renting became easier for owners to advertise through websites like VRBO and Airbnb, the city’s status as a vacation hot spot “absolutely” created a market for the quick turnover and potentially higher profit of short-term guests versus long-term tenants.

Both Berke and Villarreal point out that short-term rentals have in some cases been an economic life raft for families that were being squeezed by rising taxes, the cost of maintaining older, often historic, homes and the pressure to sell their houses.

“Renting out part of their property has provided a second income in a town that doesn’t always have a lot of economic diversity,” Villarreal says. Trying to drag a net for short-term rental sharks without giving it some serious thought is bound to unintentionally catch some of those families, and to lead to the “displacement of people who make the community what it is.”
“I think if we had a solution we would have already done it,” Villarreal offers. Still, she doesn’t think the housing situation is beyond saving, and is in search of an integrated way to address the crisis.
City leaders often cite the figure that Santa Fe is about 2,500 units short when it comes to affordable housing.
Villarreal agrees with city staff who have said in the past that while downtown rentals for long-term tenants often don’t qualify as affordable housing, they still impact the housing situation for the city as a whole. As the people who would have lived in and around downtown are pushed into other parts of Santa Fe, their demand has the net effect of raising everyone’s rents and crowding rental stock—which has an already paltry vacancy rate of around 4 percent.

Plus, the councilor points out, short-term tenants most often don't enter into the social fabric of Santa Fe neighborhoods.

Johnson agrees.

"I think it's vital that we keep the integrity of our neighborhoods together," she told the council, "because we're the ones who vote, we're the ones here who are putting in the time to try to make the city better."