Fee Me

Santa Fe’s mayor and City Council narrowly rejected a proposal Wednesday night to prohibit developers from paying a fee to get out of building affordable housing at the Midtown campus.

District 1 Councilor Renee Villarreal and District 2 Councilor Michael Garcia sponsored the measure, arguing that construction of affordable housing should be a priority at the city-owned site slated for redevelopment.

But city staff and a slim majority of the governing body opposed the measure, contending it would turn off developers and stifle construction at the old College of Santa Fe campus.

The city requires a percentage of all new housing developments to include affordable units but developers are allowed to pay a fee in lieu of providing those units. The fee is based on a calculation that changes annually and goes into the city’s Affordable Housing Trust Fund.

Santa Fe officials created the option in a bid to spur the creation of new rental housing after years of little rental housing development. But Garcia argued too few of the housing units built across the city in recent years meet Santa Fe’s standard for affordability as developers have opted instead to pay the fee.

The city aims to redevelop the site with as many as 1,100 units of housing and the council has already approved a plan that calls for at least 30% of those units to be affordable.

Citing a housing crisis that is pricing many Santa Fe residents out of the city, Garcia questioned whether the city is better off taking a fee from developers instead of requiring the construction of affordable units.

“The trend is that developers will pay the fee instead of developing the units. And it’s my opinion we direly need the units instead of the fees,” he told the council.

In an unusually dismissive memo to the council, city staff argued the move could hinder development at Midtown.

“The redevelopment of Midtown relies on private development capital to pay for public improvements and other community benefits. Without that investment, the burden of these costs will fall on the public sector and affordable housing developers. This has the likely outcome of stalling or greatly delaying the redevelopment of Midtown and undermining the affordability goals and community benefits called for in the Midtown Plans,” Alexandra Ladd, director of the Office of Affordable Housing, wrote in a report to the council.

The city is still in the early stage of redeveloping the campus. So far, it has only officially sought proposals for redeveloping the film and TV studio, visual arts center and performing arts center. Future plans call for offering tracts of land for sale for housing and other new buildings.

Mayor Alan Webber argued the proposal from Garcia and Villarreal would only limit the flexibility of the city and developers in redeveloping the site.

“Councilor Garcia wants to think outside the box and instead he’s building a smaller box,” he said.

District 3 Councilor Lee Garcia signed on as a co-sponsor of the proposal and District 3 Councilor Chris Rivera also supported the measure.

But it ultimately failed on a 5-4 vote after two hours of discussion, with the mayor and Councilors Sig Lindell, Jamie Cassutt, Carol Romero-Wirth and Amanda Chavez opposed.