What happens when you connect wages to local housing costs? Officials in Santa Fe, New Mexico, hope that doing so will help ease the pressure of rapidly rising rents and allow people who work in the city to also live there.
At the tail end of last year, the city of Santa Fe approved an update to its living wage ordinance, raising the minimum wage to $17.50 an hour starting in 2027. But here’s the kicker: the update also changed how that wage is calculated in the future. Beginning in March 2028, the city will incorporate HUD’s Fair Market Rent (FMR) into the formula. Housing advocates and local officials believe it’s the first city in the country to do so.
“For years, one of the ways that we’ve described the problem of the rising cost of housing is that it’s not keeping up with wages,” says Chris Genese, director of campaigns at Right to the City, a national tenants rights alliance. “This is the first time we’ve seen legislative action that is deliberately tying these two things together.”
The new formula will take 50 percent of the Consumer Price Index for the region plus 50 percent of the FMR for a two-bedroom unit in Santa Fe to determine the city’s minimum wage. And while the increase will be capped at 5 percent, it will never decrease.
From a national organizing perspective, this housing victory is one not confined to Santa Fe but, as local organizers also hope, one that’s replicable across the country, including in places beholden to state preemption laws for housing.
How It Happened
In 2002, Santa Fe passed its first “living wage” ordinance, which was established to determine “the minimum hourly wage necessary for a person to achieve a higher standard of living.” Unprecedented at the time, the ordinance raised the minimum wage from $5.15 to $8.50 an hour starting in 2004. Originally, the law applied only to city workers and contractors, but it was eventually expanded to include all workers in businesses or nonprofits with 25 or more employees.
Today, Santa Fe’s minimum wage is $15 per hour, well above the state’s $12 per hour. According to the bill that introduced the ordinance updates, it’s also higher than the average earnings in the county, which encompasses the city of Santa Fe and surrounding communities, reservations, and natural areas.
But the cost of living in the city has risen fast—74 percent since 2016. According to a city planning assessment, almost half of the city’s renters are cost-burdened—meaning they pay more than 30 percent of their income in housing costs—or severely cost-burdened, meaning they pay more than half of their income in rent.
“While we’ve enjoyed that cost-of-living increase per year, that is clearly not keeping up in any way with housing, which is the real cost of living increase in Santa Fe,” says Marcela Díaz, executive director of Somos Un Pueblo Unido, a local immigrants rights and economic and racial justice organization.
Somos was one of several community-based organizations that championed the city’s original living wage ordinance and was invited back to the table in May 2023 by then-Mayor Alan Webber to devise updates that reflect the current reality of Santa Fe’s workforce.
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“We have a lot of folks in our membership [who] continue to make exactly the minimum wage, and the only reason why it goes up is because there is a cost-of-living increase,” says Díaz.
Many in Somos’s member base are immigrants and essential workers who have few opportunities to build their wealth by moving into higher-paying positions or jobs, she says. “ [And] even though their wages are not increasing significantly on a yearly basis, their rent is.”
“Rent goes up higher than mortgage payments—or any other cost of living—and tends to be independent from the local economies around wages,” says Tomás Rivera, executive director of Chainbreaker Collective, another local community-based organization that was called to the table. The economic and environmental justice organization shares much of Somos’s base, but works more on transportation and housing. Its involvement was instrumental in introducing FMR into the living wage calculation.
When the group was consulted by the mayor’s office in April 2025, it already knew which intervention its members would want to make.
“When there was talk about revisiting the living wage to increase it, we really wanted to take it to the next step,” says Rivera. “FMR is a strong indicator of whether or not people are going to be able to remain housed [and is] something that our members have a pretty strong concept of. It [was] a very obvious and natural fit.”
Socializing the proposal to the community was, of course, a team effort. “We certainly didn’t do this alone,” says Cathy Garcia, Chainbreaker’s communications organizer. “We were just one organization also seeing that market pressure and rent [aren’t] related to the local economy.”
Santa Fe has a politically active citizenry, says Díaz, thanks to its network of member-led, community-based organizations that have lineage in the city. For example, some of Somos’s organizers and members who were involved in the original living wage ordinance campaign played a critical role in educating its current members about the proposed updates.
“[With] the first living wage ordinance, a lot of people in the immigrant community would only hear from their employer, ‘This is going to raise prices, your rent’s going to go up.’”
This time around, they knew where to find more information. Not that they couldn’t assess their own lived experiences: “The housing market does not coincide with wages—our members know that because they live it,” says Díaz. “So, they were very excited to see a different accelerator.”
Chainbreaker says that the FMR indicator was proposed in early summer 2025, leaving only a few months to collect community feedback and mobilize enough community members to push city officials to support the change by late fall. To make matters worse, it was an election year, which could have diverted attention away from the issue at hand.
But Chainbreaker’s members turned the FMR indicator into an election issue.
“To make sure that the elected officials who were espousing support for it actually voted was a genuine community effort,” says Rivera. “Without that community support, without the legacy of organizing that’s decades old here in Santa Fe, it wouldn’t have gotten over the line.”
The ordinance passed 5-2 in November 2025. While Mayor-elect Michael Garcia argued against calling it a “living wage,” pointing out that the wage wasn’t sufficiently high enough to be called so, he was a strong supporter of the changes and even successfully introduced an amendment to raise the wage for city employees to the new $17.50 threshold by January 1, 2026.
“This isn’t a living wage, of course—that’s aspirational,” says Díaz. “But raising the minimum wage is raising the floor for all workers. We believe that.”
According to an economic analysis by the Political Economy Research Institute at the University of Massachusetts Amherst, the update to the ordinance is projected to minimally impact businesses while giving raises to roughly 41 percent of the city’s workforce.
And organizers on the ground are hopeful that the new ordinance will also go a long way in keeping workers stably housed.
“This policy is putting into a political framework an acknowledgement that workers are renters and renters are workers,” says Rivera. “We need to make those connections—not just in theory but in actual practice.”
Going Beyond Santa Fe
Only time will tell how the new wage increase and updated formula will ultimately impact Santa Fe’s affordability landscape, says Garcia, but the city already has 20 years of data that suggest promising results.
“The living wage has been in effect in Santa Fe for over 20 years. The sky hasn’t fallen,” she says. “In fact, if anything, our local businesses are stronger and more robust than our big boxes.”
Now, organizers are hoping to explore how other cities can replicate their ordinance—especially those hampered by state rent-control preemption laws, which prohibit municipalities like Santa Fe from regulating housing beyond the state’s standards. After all, New Mexico itself is still under preemption, after a bill to repeal it failed during the last legislative session. That means that local affordable housing policies for inclusionary zoning, rent control, or source-of-income discrimination, for example, run the risk of legal challenges.
This is something that can happen locally without having to wait for people to solve the [housing] crisis. The FMR is universal, it is regional, and it’s tailored to [every] city’s individual needs. All you have to do is say, ‘Plus FMR.'”
Tomás Rivera, executive director of Chainbreaker Collective
“This is something that can happen locally without having to wait for people to solve the [housing] crisis,” says Rivera. “The FMR is universal, it is regional, and it’s tailored to [every] city’s individual needs. All you have to do is say, ‘Plus FMR.’”
Genese of Right to the City says the alliance is excited for the political pathways that such legislation can open, but more tenant protections still need to be in place.
“Downstream, it just benefits the real estate sector, because their tenants would effectively have more money to pay the rent increases,” he says. “This is an important step, but we need to take other steps to ensure that renters aren’t being taken advantage of and [that] corporate landlords aren’t just sucking up all the money.”
Other advocates agree. “The policy helps workers absorb rising rents and provides predictability through a transparent formula with built-in caps, but it does not slow rent increases or address underlying housing affordability shortages,” PolicyLink, a national research and action institute advancing racial and economic equity, told Shelterforce. “These sorts of policies should be paired directly with specific housing and anti-displacement policies, such as eviction prevention, rent stabilization, direct rent relief, and funding for production and preservation of permanently affordable housing.”
Santa Fe has a suite of housing efforts that this updated ordinance is joining to keep Santa Feans in their city. These efforts include source-of-income protection, which prohibits landlords from discriminating against tenants based on how they pay their rent, such as using Section 8 housing vouchers. And the city’s “mansion tax”—which taxes any sale over $1 million by 3 percent on the amount exceeding the million-dollar threshold and feeds that income into the city’s Affordable Housing Trust Fund—just survived a lawsuit brought by real estate agents based on preemption. Advocates estimate that the tax could generate as much as $6 million annually for the fund, which goes toward rental and down payment assistance, foreclosure prevention, and services for the unhoused population.
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“There is no silver bullet,” says Genese, “but strong tenant protections [and] building more affordable housing—especially looking at alternative models that put power in the community— are additional things that cities can do if they’re in a city where there’s a preemption law.”
For now, the enthusiasm—and overwhelming public support—for this ordinance is an encouraging sign, says Genese. “This is an indicator of what the public wants and is an important thing to pay attention to, especially as we’re going into the midterms,” he says. “There’s actually an appetite for this to be part of the discussion.”
That’s what excites Rivera most. “This living wage FMR escalator is really an important out-of-the-box way of thinking about the housing crisis holistically,” says Rivera. “It’s not a silver bullet [but] a silver buckshot.”
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