A middle-distant view of Santa Fe with mountains in the far distance, under a hazy blue sky.

#086 Mar/Apr 1996

Words into Action: A New Housing Delivery System for Santa Fe

In four years, a multifaceted collaborative effort has overcome many structural barriers to providing affordable housing.

Santa Fe. Photo by Flickr user Paul Sableman, CC BY 2.0


Cityscape of Santa Fe with mountains in the background under a blue sky.

Santa Fe. Photo by Flickr user Paul Sableman, CC BY 2.0

The shrinking supply of affordable housing has become the number one community concern in Santa Fe. The deepest fear is that economic displacement is now dividing rich and poor, Anglo and Hispanic, in what has for centuries been a harmonious and diverse city.

Until recently, not much was being done about the growing crisis. The city and county each have housing authorities, but federal budget cutbacks in the 1980s limited the expansion of their programs. Two nonprofit housing groups – Habitat for Humanity and the Santa Fe Land Trust – built some affordable homes during a brief dip in land prices around 1990, but they soon ran out of places to build when Santa Fe’s land market began to heat up again.

Yet in just the past four years, a multifaceted collaborative effort has overcome many structural barriers to providing affordable housing, such as the shortage of affordable land. This new movement began around 1990, when a new coalition of city council members began to press for solutions. In 1991, four landmark events occurred:

  1. The city government negotiated a bargain purchase of the 850-acre Tierra Contenta tract on the outskirts of town, with the intentions of developing a “neo-traditional” planned community with predominantly affordable housing.
  2. The city and The Enterprise Foundation helped local nonprofit housing groups fashion and implement an aggressive strategic housing plan that called for assisting 700 needy low-income households over three years.
  3. The city began pressing builders to provide affordable housing or make contributions to a housing fund. Assisted by Enterprise and the newly-formed Santa Fe Community Housing Trust, both the city and county soon created similar housing trust funds that are now capitalized with over $2.2 million. The funds are mostly used for gap financing to write down rents or sale prices.
  4. The newly-created federal HOME program began to provide additional gap financing – over $1 million a year – that began to fund home purchase subsidy programs, new rent subsidy programs, and construction of low-cost housing.

These events marked the beginning of a new housing delivery system. Its output is impressive. By the target date in the strategic plan – July 1, 1995 – nearly 500 low-income families had been assisted by nonprofit groups and cooperating for-profit developers. This was several hundred units short of the goal, but another 700 homes and apartments were substantially funded and in process. Over 1,600 people have graduated from homebuyer training sponsored by the Santa Fe Community Housing Trust and Neighborhood Housing Services (NHS). Affordable land for over 400 homes and apartments has been brought on line.

Successful Capacity Building

Political leadership, new funding sources, and a strategic plan were the catalysts of this new delivery system, but these factors by themselves were no guarantee of success. Careful attention to implementation was just as important.

Just prior to the strategic plan being drafted, the city of Santa Fe had entered into a three-year agreement that called for The Enterprise Foundation to provide intensive technical assistance to nonprofit housing groups. Enterprise’s work in Santa Fe was supported by the city, and by HUD under a one-time demonstration program designed to organize new public/private housing partnerships. Since 1991, Enterprise has provided a team of technical assistance providers equivalent to about one half-time person.

Existing nonprofit organizations were expected to implement some of the strategic plan. But several new organizations were created to carry out new initiatives. The nonprofit Tierra Contenta Corp. was to become the city’s single largest land developer. And the Community Housing Trust met previously unfulfilled program roles – administering the trust funds, starting home buyer financing programs, and later agreeing to carry out other new functions identified in the strategic plan.

With support from Enterprise and the local United Way, the nonprofits themselves formed an unstaffed coalition called the Santa Fe Affordable Housing Roundtable. Members agreed to monitor and coordinate implementation of the strategic plan.

A half-dozen collaborative projects resulted. For example, the city housing authority used its reserve funds to help finance the Community Housing Trust’s first housing development project. Shelter providers and social service organizations formed a Transitional Housing Coalition, which conceived and carried out several projects. The Housing Trust and Enterprise helped them package the financing.

Once again, continued support and commitment from the city of Santa Fe was critical to the success of the capacity-building effort. The city invested $6.3 million to buy the Tierra Contenta property. Over a three-year period, it has spent in excess of $2 million on operating support for expanded nonprofit operations – from general revenue, CDBG funds, and a HUD special purpose grant. The infusion of these resources helped to attract three highly qualified individuals to become executive directors of what are now the city’s three most productive nonprofit organizations – Tierra Contenta, the Housing Trust and NHS. For-profit businesses also got on board. Private lenders now work closely with nonprofits to overcome underwriting problems associated with low-income borrower and offer breaks on terms and interest rates for conventional financing. For-profit builders who had deserted the low end of the market now have hundreds of affordable homes and apartments in planning and construction – in partnership with Tierra Contenta Corp. and other nonprofits.

The final, critical pieces of the delivery system were put in place in 1994. Affordable permanent financing­a blend of conventional loans and soft second mortgages – had been made available. Nonprofits were concentrating on providing training, counseling, and subsidies to get low-income families into existing homes (the few that were affordable). About 85 affordable homes had been developed.

But at the same time, the nonprofits lacked sufficient up-front capital to undertake development of raw land and construction of larger projects. Affordable land in Tierra Contenta was nearly ready to build on, and nonprofits were being counted on to produce the most affordable homes and apartments in its first phase of 800 units. But lack of financial capacity was an obvious barrier.

To overcome this final obstacle, a Predevelopment Loan Fund was created by a $750,000 grant from the local Marshall L. and Perrine D. McCune Foundation. This was matched by a pledge of $750,000 in program-related investments from Enterprise. The loan fund is administered by the Community Housing Trust. In the past year, the local loan fund and Enterprise loans have made possible 375 new units now in development by nonprofits.

From all these successful efforts, a new affordable housing delivery system has achieved remarkable momentum in a short period of time. The system has three critical keys: caring and competent staff people, low-cost land and low-cost capital. The first two are assuredly in place. The last one is now called into question by impending changes in federal housing policies.

From a funding standpoint, the city of Santa Fe and its partners have followed a strategy of maximizing local resources while aggressively seeking outside funding. But it will never substitute entirely for the loss of federal rent subsidies, tax credits, and other budget cutbacks that are being considered in Congress.

Whatever the future brings, Santa Fe can proudly claim that it has significantly slowed the economic displacement of its low-income residents. The consistent leadership of local elected officials in support of public/private partnerships and system building make Santa Fe a model for other cities trying to respond to seemingly intractable housing needs.

A version of this article appeared in the Winter 1996 issue of Costs Cuts, A Technical Publication of the Enterprise Foundation, 10227 Wincopin Circle, Suite 500, Columbia, MD 21044.



  • Reinventing Housing in Pittsburgh

    March 1, 1996

    Pittsburgh mayor Tom Murphy

  • The 1996 Campaign Season – How Housing Groups Can Make a Difference

    March 1, 1996

    The 1994 elections are history. Newt is on a tight leash, the Contract on America is losing in the polls, and Clinton and Dole are all but nominated. Soon, the […]

  • Shelter Shorts

    March 1, 1996

    Public Housing Ordered for Dallas Suburbs On one of many lawsuits filed against HUD, local housing authorities, and cities to reverse decades of ghettoization of poor minorities, a federal judge […]