New Mexico's housing market is facing significant challenges, with home prices and rent costs increasing sharply over recent years. According to policy advisers to Governor Michelle Lujan Grisham, the average home price in the state has risen by 70% over the past eight years, while median rent costs have increased by 60%. This situation poses a serious issue for working families.
Analysts point to a severe undersupply of housing as a key factor driving these increases. Regulations that hinder development have been identified as contributing to this shortage, which impacts both buying and renting rates negatively.
In 2024, the Lujan Grisham administration introduced a new building code that raised insulation standards and required electric vehicle-related infrastructure. Critics argue that such measures add costs without addressing underlying supply issues. Additionally, slow reassessment of building height restrictions and prioritization of single-family homes exacerbate the problem.
A legislative proposal aimed at prohibiting certain technologies in property management was recently debated but ultimately failed. House Bill 215 sought to ban software used by property managers for setting rent prices or lease terms based on data analysis. While similar laws exist in California, critics argue that such tools merely reflect current market conditions rather than establish them.
Paul Gessing from New Mexico’s Rio Grande Foundation suggests that artificial intelligence could aid in resolving housing issues rather than causing them. He points out Austin, Texas as an example where increased housing supply has led to reduced rents.
The overarching solution proposed involves increasing New Mexico's housing supply. Encouraging technological tools for market analysis may foster entrepreneurial activity and attract AI-oriented businesses to the state, potentially benefiting local consumers.
Gessing emphasizes that addressing New Mexico’s housing shortage begins with expanding available housing units.
