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Dec 08, 2023

Albuquerque city councilors are considering making it easier to build casitas. Here’s how it went when Santa Fe did the same thing.

By Alaina Mencinger / Journal Staff Writer

By Alaina Mencinger / Journal Staff Writer Published: Monday, June 5th, 2023 at 2:46AMUpdated: Monday, June 5th, 2023 at 4:15AM

This Monday, Albuquerque's City Council is set to discuss a plan that would make building casitas more accessible in the city.

Albuquerque isn't the first New Mexico city to move forward with such a proposal. In 2019, Santa Fe passed a change to the land use code that removed the requirement that property owners with accessory dwelling units had to live in one of the structures on their land, among other changes.

Despite the changes, however, just a handful of casitas have been built in Santa Fe. Data from the Santa Fe Association of Realtors 2022 State of Housing report shows that in 2019, 29 permits to build casitas were issued in the city; two years later, the number was 30.

"It's been stable," said Donna Reynolds, government affairs director for SFAR. "It hasn't gone up, and it hasn't gone down."

The land use changes came just before the start of the COVID-19 pandemic, which Reynolds said froze some housing development.

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But coronavirus-caused construction delays weren't the only chilling factors.

Miles Conway, president of the Santa Fe Area Home Builders Association, said there are a few reasons for the low permit numbers.

There's a shortage of an essential component for electrification: 320-amp meters.

"There's a huge issue with electrification of these homes right now," Conway said. "There's certain things that are out of the control of the government, or the builder themselves. That has to do with the availability of equipment."

When natural disasters such as hurricanes strike, Conway said, knocking out power grids, the higher amp meters are generally sent to recovering areas. And, Conway said, a variety of factors, including geopolitical conflict and COVID-19, have disrupted the supply of the aluminum used in meter construction.

Santa Fe — and Albuquerque — are both in Public Service Co. of New Mexico service territory. Traditionally, Conway said, PNM would provide one service drop per property and have just one wire coming off the electric pole and leading to the property.

With a casita increasing electricity usage, homeowners would have to upgrade their meter and install a higher-capacity unit to utilize the single-service drop for both structures.

But installing a 320-amp meter could mean a wait lasting upward of a year, Conway said. Although the shortage is somewhat subsiding, for homeowners, that wait time can dampen interest in building.

There is one way to avoid the shortage, Conway said, which is to issue a second address for a casita and set it up with its own service drop.

"It's a very viable path," Conway said. "It seems kind of wonky, but it's a big deal for the industry."

Another limiting factor is the time to build.

Time is money, and the longer it takes to get approval to build, the higher the cost of construction, Conway said — costs that get passed on to homeowners, and ultimately, tenants.

Reynolds said some of the concerns about loosening the restrictions for casitas haven't ultimately played out in Santa Fe. When the legislation was first being discussed, many feared the new units would all be used as short-term rentals, rather than long-term affordable housing.

But Santa Fe capped the number of short-term rental units at 1,000. Currently, the city is close to hitting that limit; just 25 permits remain, with a waiting list of 60 people, according to the Santa Fe Short-Term Rental Office.

Others worried that neighboring properties might lose value if a casita were built nearby. But Reynolds said she hasn't heard of that playing out.

"It (a house with casita) would be assessed at a higher value," Reynolds said. "That could be reflected in the community — and, there a lot of people who still might like a bigger lot, that their property, actually I would think might go up. It makes their house maybe more attractive."

Reynolds cited data from the Urban Institute that found that when multifamily affordable housing was built in an area, property values of neighboring houses moderately increased.

"People think, ‘If you put an affordable housing complex in my neighborhood … our value is going to go down,'" Reynolds said. "It's just the opposite, they modestly go up."

However, Reynolds said other concerns about height have endured, like problems with solar access and blocking mountain views.

Both Reynolds and Conway would like to see the process to build casitas become easier. Conway said he’d like to reduce parking restrictions and create a handful of pre-approved floor plans for casitas to expedite the permitting process. Reynolds also said a task force she is a part of is looking to create financing opportunities for homeowners interested in building casitas.

Reynolds said she’d like to see the number of permits for casitas double. But casitas are just part of combating rising housing costs in Santa Fe, Reynolds said, including more multifamily units and permanent housing.

"Everything here has just gotten so expensive in Santa Fe," Reynolds said. "Even small — and I mean really small — units are worth a lot."

As far as affordability, Reynolds said she is uncertain whether the casitas built in the last three years are generally more affordable than the typical Santa Fe apartment.

"They’re not going to be a panacea," Reynolds said, "but they definitely are going to help."