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 Sedillo Lopez
LAST UPDATED
ORIGINAL DATE 2/24/2025
SHORT TITLE
Housing Study Requirement for LEDA
Funds
BILL
NUMBER Senate Bill 223
ANALYST Rodriguez
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
No fiscal impact No fiscal impact No fiscal impact $0.0
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Duplicates House Bill 135 and relates to Senate Bill 169
Sources of Information
LFC Files
Agency Analysis Received From Economic Development Department (EDD) New Mexico Mortgage Finance Authority (MFA)
SUMMARY
Synopsis of Senate Bill 223
Senate Bill 223 (SB223) adds housing studies as a requirement to qualify for Local Economic
Development Act (LEDA) funds. This bill amends the act to require eligible companies to
conduct a housing study of the counties and municipalities that could be affected by a proposed
economic development project prior to applying for LEDA funding through a local or regional
government. The local or regional government shall consider the findings of the housing study
when evaluating a company’s application for funding. The bill further stipulates that the housing
study cannot solely rely on a cost burden analysis.
SB223 defines a housing study as a multivariable estimate of housing demand created by new
employment expected to occur as a result of implementation of an economic development
project.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
Senate Bill 223 – Page 2
FISCAL IMPLICATIONS
SB223 does not have a fiscal impact on the Economic Development Department (EDD), the
agency responsible for administering LEDA.
However, the requirement of a housing study could impact the number of awards distributed for
LEDA. As noted in “Significant Issues,” the requirement of a housing study could be a hindrance
for businesses seeking to relocate or expand to New Mexico. As such, fewer LEDA funds may
be awarded to fewer companies.
SIGNIFICANT ISSUES
Costs and Duration of Housing Studies. EDD raises concerns about the costs and duration to
complete housing studies—indicating the requirement may be detrimental to companies looking
to expand or relocate to New Mexico. The agency writes:
Housing studies can take anywhere from two months to a year to be completed, and the
cost may range between $10 thousand and $75 thousand depending on the type of special
analysis or data collection required.
The purpose of LEDA funds is to help a company expanding or relocating to New
Mexico offset the cost of necessary infrastructure for the company to get up and running.
Generally, requiring a qualifying entity to conduct a housing study completely contradicts
the idea of offsetting costs for a company to expand or locate in New Mexico. It is an
additional financial burden, will delay a project’s ability to move forward, and a
requirement that will surely be detrimental to creating successful projects. The cost of a
housing study in many instances, in the most part for rural projects, would be more costly
than the benefit of a LEDA award itself.
The bill does not specify the type of housing study that would be required to apply for LEDA
funding. However, if the average housing study costs between $10 thousand to $75 thousand, the
cost of the housing study could outweigh the total amount of LEDA awarded to a project. For
example, in FY24, LEDA awards ranged from $50 thousand to $18 million. While housing
studies may be affordable for larger companies, it may be a hindrance to smaller companies and
those receiving smaller LEDA awards.
EDD also notes the agency already collects data on the number of workers expected to move to
the state for jobs created through LEDA, which could be considered a reasonable estimate of
housing demand. EDD writes:
In EDD’s economic impact analysis for LEDA projects, companies are asked to provide
their expected percentage of workers who will move to the state, county, or city for a job.
This helps EDD estimate the expected number of people relocating to the area who will
need housing. In our model we also assume that 10 percent of the workers moving to the
area will build a home. This can be considered a reasonable estimate of housing demand.
Senate Bill 223 – Page 3
Best Practices for Housing Studies.
EDD notes the importance of housing studies to inform
community leaders about the need for infrastructure or to attract housing developers but argues
that housing studies should be done at the community or regional level, as opposed to requiring
local businesses to take the burden. The agency writes:
According to Golden Shovel (Housing Studies: An Economic Development Best Practice
That Leads to Growth) using a housing study as an economic development best practice
at the community level does inform community leaders and stakeholders in their
decision-making for investment of taxpayer funds into economic development projects
and are valuable assets for any community. A housing study can be used to demonstrate
the need for infrastructure or to attract housing developers to a community. Housing
studies for a community or region should be revised every five years. For these reasons, it
makes better sense to find ways to support New Mexico communities with resources so
that they may conduct housing studies to support greater local economic development
efforts, rather than requiring local businesses to conduct and pay for studies that may or
may not be relevant to the entire community or to their own expansion or relocation
plans.
EDD also notes the existence of local government planning grant funds through New Mexico
Finance Authority and Department of Finance and Administration that communities could use
for planning purposes.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB223 is a duplicate of House Bill 135.
SB223 relates to Senate Bill 169 (SB169), which proposes the Economic Development Site
Readiness Act and a site readiness fund which, if enacted, could fund site characteristic studies
that assess the suitability of a proposed economic development site. The Senate Tax, Business
and Transportation committee substitute of SB169 includes housing availability as a factor to be
assessed in site characterization studies.
JR/hg/sgs/SL2