Updating Fee in Lieu and Affordability Requirements (Bill)

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CITY OF SANTA FE, NEW MEXICO1
BILL NO. 2026-112
INTRODUCED BY:3
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Mayor Michael Garcia5
Councilor Alama Castro6
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A BILL10
RELATING TO THE SANTA FE HOMES PROGRAM AND REQUIREMENTS FOR11
RENTAL UNITS; AMENDING SECTION 26-1.22 TO MAKE CERTAIN TECHNICAL12
CHANGES, TO CLARIFY THE CALCULATION OF FEES PAID IN LIEU OF13
PROVIDING ON-SITE AFFORDABLE UNITS, TO AMEND THE FEE-IN-LIEU14
CALCULATION TO USE THIRTY PERCENT OF THE AREA MEDIAN INCOME15
INSTEAD OF SIXTY-FIVE PERCENT WHEN DETERMINING BASE FEE AMOUNT.16
BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SANTA FE:17
Section 1. Section 26-1.22 of SFCC 1987 (being Ord. No. 2019-30, § 5) is18
amended to read:19
26-1.22 - Requirements for SFHP rental units.20
A. If a SFHP developer obtained a residential building permit for a multifamily21
residential development between January 1, 2016, and December 31, 2019, then22
the developer shall pay a fee associated with such development [shall be assessed]23
in accordance with SFHP administrative procedures. If applicable, the associated24
[an] annexation agreement, subdivision plat, or development plan shall be25
underscored material = new [bracketed material] = delete

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administratively amended to reflect the updated requirement and the owner or1
developer, as applicable, shall record or file, as applicable, the amended document2
[shall be recorded or filed, as applicable, by the owner or development]. Incentives3
for SFHP developers as set forth in subsection 14-8.11 SFCC 1987 [will] are not4
be available for these projects, other than the density bonus pursuant to subsection5
14-8.11(G)(1).6
B. [Effective January 1, 2020, and thereafter,] A SFHP developer that obtains a7
building permit for a [multifamily] residential rental development after January 1,8
2020, shall [comply with the SFHP ordinance by] either: pay[ing] a fee,9
create[ing]e [LPDUs] Low Priced Dwelling Units (“LPDUs"), or provide10
affordable on-site units as follows:11
(1) Fee in lieu. [The] Except for small multifamily rental projects of twelve12
(12) or fewer units, and as described by Section 26-1.22(B)(1)(d), SFHP13
developers may pay [of] a fee in lieu of providing on-site affordable units,14
assessed according to a[n "affordability gap"] calculation that determines15
the base fee, which is the difference between [a] the FMR and the rent16
affordable to a renter earning thirty percent ([65] 30%) of the AMI.17
(a) [The steps of the calculation of the base fee amount t] To calculate18
the fee in lieu [as more fully described in the administrative19
procedures, are as follows]:20
(i) multiply the total number of units [broken out by number21
of bedrooms)] of each size, as defined by number of22
bedrooms, by fifteen percent (15%) to determine the23
number of affordable units that would have been required24
to be built if not for the developer paying the fee;25

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(ii) multiply the number of affordable units required in the1
previous step (including any decimal places) by the base2
fee associated with each type of unit [broken out by3
number of bedrooms)] (determined by number of4
bedrooms) to determine the monthly fee; and5
(iii) multiply the monthly fee by twenty-four (24) months to6
determine the total project fee.7
(b) HUD's FMR will be used to establish the [affordability gap(]"base8
fee amount"[)] relative to HUD's AMI data. [Developers shall pay9
phased fee increases according to when projects are permitted as10
follows:11
(i) for units permitted on or before June 30, 2020, the base12
fee amount;13
(ii) for units permitted between July 1, 2020, and June 30,14
2021, the base fee, increased by twenty percent (20%) fee15
increase;16
(iii) for units permitted between July 1, 2021, and June 30,17
2022, the base fee, increased by forty percent (40%) fee18
increase;19
(iv) for units permitted between July 1, 2022, and June 30,20
2023, the base fee, increased by sixty percent (60%)21
increase;22
(v) for units permitted between July 1, 2023, and June 30,23
2024, the base fee, increased by eighty percent (80%)24
increase; and25

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(vi)][f]For units permitted on or after July 1, 2024, the base fee[,] shall be1
increased by one hundred percent (100%).2
(c) A SFHP developer that creates a vacation time share project or3
short term rental units shall be subject to the fees set forth in this4
subparagraph 26-1.22(B)(1);5
(d) A small multifamily rental project that consists of twelve (12) or6
fewer units shall pay the base fee amount, which shall be7
calculated as the difference between a FMR and the rent8
affordable to a renter earning thirty percent ([65] 30%) of the9
AMI, and shall not be subject to the phased fee increases set forth10
in subsection 26-1.22(B)(1)(b).11
[(e) No later than July 1, 2022 staff shall initiate a review of the12
provisions of subsection 26-1.22(B)(1), as established by13
ordinance no. 2019-30, and shall present the findings to the14
governing body within six (6) months.]15
(2) One-hundred percent (100%) LPDUs. A[n] SFHP developer may create a16
development that consists of one-hundred percent (100%) LPDUs that17
shall comply with the requirements set forth in subsection 26-2.3;18
(3) Fifteen percent (15%) affordable rental units. A[n] SFHP developer may19
set aside [of] fifteen percent (15%) of on-site rental units for income20
certified renters as described in subsection 26-1.23(A); or21
(4) Combination. A[n] SFHP developer may combine two (2) or more of the22
preceding three (3) options if such a combination provides an equivalent23
and beneficial impact toward meeting identified housing needs, subject to24
approval by the office of affordable housing. If a developer chooses to25

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provide a combination of the options, then the city shall provide the1
developer incentives set forth in subsection 14-8.11(G), as approved by2
the land use director.3
C. The marketing, leasing, and occupancy of either an SFHP rental unit or an SFHP4
manufactured home lot that is rented shall conform to the criteria set forth in the5
administrative procedures. Rental rates shall comply with the rates set forth in6
subsection 26-1.24 SFCC 1987. SFHP rental units shall comply with the minimum7
size, unit type(s), and other structural requirements set forth in subsection 26-1.258
SFCC 1987. SFHP developers must obtain approval for the location of SFHP rental9
units. The units or manufactured home lots shall have compatible exterior10
architectural and landscaping appearance with other units in the development.11
D. Units or manufactured home lots available for SFHP rentals shall be described in12
a SFHP proposal in sufficient detail so that such units or manufactured home lots13
can be identified after construction or creation and occupancy. SFHP tenants must14
meet eligibility requirements at the time they initially lease an SFHP unit.15
PASSED, APPROVED, and ADOPTED this ______day of ___________, 2026.16
APPROVED AS TO FORM:17
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MARCOS D. MARTÍNEZ, CITY ATTORNEY20
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Legislation/2026/Bills/Updating Fee in Lieu and Affordability Requirements25Marcos Martinez (May 21, 2026 09:49:43 MDT)
Marcos Martinez