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City councils

Santa Fe's Housing Crisis: Developer Fees and the Fee-In-Lieu Option

Strategic Insights

— 2 min read

A forum at the city's Secular Humanist House earlier this month highlighted the city's ongoing housing crisis, with City Council candidate Paul Bustamante stating that developers have consistently chosen the "fee-in-lieu" option over building affordable units. While Bustamante's statement is mostly true, data from the city shows that two projects, Zia Station and the Presidium Casa Siena Apartments, have included affordable units. The fee-in-lieu option has been a contentious issue, with proponents arguing it's necessary to spur development, while critics claim it's robbing the city of affordable units.

Key Takeaways:

  • Since 2016, developers of all but two projects have chosen the fee-in-lieu option over building affordable units.
  • Zia Station, a 384-unit development, will include 39 affordable units, while the Presidium Casa Siena Apartments, a 233-unit development, will include 35 affordable units.
  • City spokesperson Regina Ruiz mentioned a proposed development at 2768 Agua Fría St. may include affordable units but remains under review.
  • The fee-in-lieu option is only available for rental properties, while developers of properties with more than 10 homes built for sale to homeowners are required to set aside 20% as affordable.
  • The fee option has been a source of controversy, with proponents arguing it's necessary to spur development, while critics claim it's robbing the city of affordable units.
  • The Santa Fe Homes Program was created in 2005 to require new rental housing projects to make 15% of their units comply with city affordability guidelines.
  • Developer fees contributed almost $411,000 to the city's Affordable Housing Trust Fund in 2023, $581,000 in 2024, and about $944,000 in 2024 (part of the 2025 fiscal year).
  • The Affordable Housing Trust Fund has supported the approval of over 400 fully affordable rental units and provides rental support to individuals at risk of becoming homeless.
  • Rental rates have increased by only 0.5% in 2025 from the previous year, indicating a positive trend for rent affordability.

Statistics:

  • 384 units: total units at Zia Station, with 39 affordable units.
  • 233 units: total units at Presidium Casa Siena Apartments, with 35 affordable units.
  • 400+ units: fully affordable rental units approved through the Affordable Housing Trust Fund.
  • 20%: affordable units required for properties with more than 10 homes built for sale to homeowners.
  • 0.5%: increase in rental rates in 2025 from the previous year.
  • $411,000: developer fees contributed to the Affordable Housing Trust Fund in 2023.
  • $581,000: developer fees contributed to the Affordable Housing Trust Fund in 2024.
  • $944,000: developer fees contributed to the Affordable Housing Trust Fund in 2024 (part of the 2025 fiscal year).

Sources:

  • City spokesperson Regina Ruiz via email on Friday.
  • Aug. 20 memo to the City Council.
  • The Santa Fe Secular Humanist House forum.
  • City data on developer fees and affordable units.

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