Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Dow/Romero, A./Henry
LAST UPDATED
ORIGINAL DATE 02/26/2025
SHORT TITLE
Building Housing Communities
BILL
NUMBER House Bill 571
ANALYST Gygi
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
DFA
No fiscal
impact
No fiscal
impact
No fiscal
impact
See Fiscal
Implications
Recurring General Fund
Total
No fiscal
impact
No fiscal
impact
No fiscal
impact
See Fiscal
Implications
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to House Bill 135, House Bill 448, and Senate Bill 205
Sources of Information
LFC Files
Agency Analysis Received From
Department of Finance and Administration (DFA)
Governor’s Office on Housing
New Mexico Mortgage Finance Authority (MFA)
Agency Analysis was Solicited but Not Received From
New Mexico Municipal League (NMML) Regulation and Licensing Department (RLD)
SUMMARY
Synopsis of House Bill 571
House Bill 571 (HB571) creates the Building New Mexico program and certification within the
Department of Finance and Administration (DFA). The certificates would be awarded to
municipalities that have implemented land use and zoning strategies that increase housing
affordability and accessibility.
The bill directs DFA to promulgate rules that (1) define best practice land use and zoning
policies and (2) identify strategies that reduce the complexity of approval and review processes,
promote mixes of housing types, and lower the cost of housing construction and development.
The effective date of this bill is July 1, 2027. House Bill 571 – Page 2
FISCAL IMPLICATIONS
HB571 does not appropriate any funds to implement the Building New Mexico program. DFA
did not provide an estimate of increased operating costs associated with the new program. LFC
estimates the department will require at least one program coordinator with an annual salary of
$109 thousand to administer the program and promulgate rules, beginning in FY28. This
estimate might change if DFA provides additional information or if the effective date is changed
to FY26 or FY27.
SIGNIFICANT ISSUES
A recent article published by Pew Charitable Trusts identifies regulatory barriers to new housing
as one of the primary drivers of New Mexico’s housing crisis.
1
HB571 would begin a statewide
effort to address regulatory barriers impacting the availability and affordability of housing.
According to the Governor’s Office on Housing, the proposed program could follow the model
of Colorado’s Proposition 123 and use the agreed best-practices as an incentive framework for
state funding in future.
2
Colorado’s law established state-defined best practices around land use
and zoning to support adoption in municipalities. It also established special pools of funding for
municipalities that adopt these best practices.
According to Pew, in New Mexico between 2017 and 2024:
Homelessness increased 87 percent, 47 percent faster than the national average.
Median rents increased 60 percent compared to 27 percent nationally.
The average cost of a home increased 70 percent, far outpacing wage growth.
According to the Governor’s Office on Housing, a 15-year underproduction of housing is driving
these increases. Despite high demand and low supply of available housing, as of October 2024,
New Mexico was one of just five states with a decline in single-family permit issuance year-
over-year.
The reason for HB571’s delayed effective date of July 1, 2027, is unclear. Given that new
housing production cycles can take several years, and that New Mexico needs at least 40
thousand affordable rental units now,
3
it might be prudent to choose an earlier date.
New Mexico’s Affordable Housing Act (AHA). The New Mexico Legislature created the
Affordable Housing Act (Section 6-27-3 NMSA 1978) as an exception to the Anti-Donation
Clause in the New Mexico Constitution. The act allows local governments and other political
subdivisions to put resources toward affordable housing acquisition, development, financing,
maintenance and operation.
4
According to the Mortgage Finance Authority (MFA), which
oversees compliance with the act, it essentially permits public-private partnerships for affordable
housing activities. For local governments to make donations under the act, the municipality or
county is required to have an MFA-approved affordable housing plan and ordinance.
1
https://www.pewtrusts.org/en/research-and-analysis/articles/2025/01/21/restrictive-regulations-fuel-new-mexicos-
housing-shortage
2
https://oedit.colorado.gov/proposition-123-colorado-affordable-housing-financing-fund
3
https://nlihc.org/sites/default/files/SHP_NM.pdf
4
https://housingnm.org/about-mfa/affordable-housing-act/overview House Bill 571 – Page 3
Ideally, HB571’s program complements the AHA’s required planning activities so that local
governments with approved housing plans and ordinances could use them to obtain a certificate.
Currently, there are 39 local governments (municipalities and counties) that have compliant
housing plans and ordinances on file with the NMMFA.
For example, an AHA plan must include:
Identification of constraints, such as land use controls, codes and enforcement, fees and
exactions, processing and permit procedures, on/off site improvements, reasonable
accommodation, availability of financing, land availability and prices, construction costs,
local capacity to assist, finance and manage construction, provide housing support
services and administer housing funds and programs; and
Plans to promote potential regulatory concessions and incentives for removing or
mitigating government and non-government constraints to development, rehabilitation or
conservation of affordable housing.
ADMINISTRATIVE IMPLICATIONS
The Governor’s Office on Housing points out:
DFA does not have staff with technical expertise in housing and land use and would need
to work with the Governor’s Office of Housing Planning and Production (OHPP) to
implement the program. If OHPP is successful in the passage of HB448 or SB205 to
create statutory authority for the office, then this would be a natural place for the program
to be administered because of the focus on improving housing regulatory frameworks in
New Mexico.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
House Bill 571 relates to House Bill 448 and Senate Bill 205, which would establish the New
Mexico Office of Housing Planning and Production.
It also relates to HB135, which would amend the Local Economic Development Act (LEDA) to
require qualifying entities to conduct a housing study.
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