SANTA FE, N.M. (AP) — Santa Fe has long referred to itself as “The City Different” for its distinct atmosphere and a blending of cultures that stretches back centuries. Now, it’s trying something different — something officials hope will prevent a cultural erosion as residents are priced out of their homes.
It’s the first city in the United States to directly link wages to housing affordability, aiming to counter high rents by tying minimum wage increases to consumer prices as well as fair market rental prices.
Many see the new ordinance as a big step forward for workers, but Mayor Alan Webber also sees it as an important tool for addressing an affordability crisis that threatens the very fabric of Santa Fe.
“The purpose is to make a serious difference in assuring that people who work here can live here,” he stated, emphasizing the importance of preserving the city’s cultural diversity.
Santa Fe is not alone in facing rising rents and housing prices that squeeze households nationwide, exacerbated since the pandemic.
How the Ordinance Works
Starting in 2027, Santa Fe’s minimum wage will increase to $17.50. The ordinance introduces a new blended formula for calculating annual wage increases, incorporating both the Consumer Price Index and fair market rent data, with a 5% cap to limit excessive cost surges.
This move is aimed at addressing the disparity in median housing prices and rental costs, which are significantly high compared to other major markets in New Mexico.
Who Benefits
About 9,000 workers, roughly 20% of the city's workforce, will see improved wages. Diego Ortiz, a construction worker and father of two, highlighted the need for financial stability to support his family's basic needs and aspirations.
“If there’s economic stability where we can get a good wage, then we’re going to be able to pay our rent, pay our bills, or get a house,” Ortiz explained.
More Tools for Affordability
While raising minimum wage is crucial, experts warn that it won’t fully resolve the root causes of housing shortages. Mayor Webber notes that the city is also focusing on increasing housing permits and funding from a mansion tax aimed at supporting affordable housing projects.
“Can the people who work here afford to live here?” Webber questioned as Santa Fe aims to tackle the affordability crisis while preserving its unique community atmosphere.
