New Mexico Legislature needs to help local governments permit more housing, report recommends

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The report, “How to Streamline Housing Permitting in New Mexico,” says the Legislature should offer state-funded incentives to local governments that adopt “by-right” or “administrative” housing permit approval policies. Such policies enable local planning and zoning officials to approve housing permits without a public hearing, so long as the project adheres to land-use ordinances.

While some cities in New Mexico have adopted or expanded “by-right” permitting in recent years, most rely on a “discretionary” process that is sometimes based on vague zoning codes and approve projects on a case-by-case basis, the report says. 

Too many housing projects die at the finish line, according to the report, because “local permitting processes overrepresent public input from a narrow demographic rather than weighing the interests and needs of the community at large.”

Instead of allowing local input on specific projects, the report recommends, municipalities should “elevate public input to the policy level” by soliciting feedback on city-wide comprehensive plans and land development codes. 

Homewise President Johanna Gilligan told Source NM on Wednesday that the organization is increasingly looking to state government, versus localities, to help address New Mexico’s housing shortage. 

Homewise backed House Bill 200 last legislative session, which created a $25 million subsidy for the construction of starter homes. Gilligan said the nonprofit will seek sponsors to carry bills in the upcoming session that are based on the report released Wednesday.

One such bill would offer local governments $300,000 if they adopt modern zoning practices, including “by-right” approvals, and also commit to collecting and sharing their permitting data with the state. The report highlights the lack of statewide data that tracks how much time elapses between when a developer requests a permit and receives it. 

Another bill would create a Division of Housing within a state agency tasked with tracking that data, administering housing grant programs and providing technical assistance to local governments updating their zoning codes. 

The Legislature in 2025 created the Office of Housing, which is administratively attached to the Department of Workforce Solutions, and awarded it more than $100 million in funds aimed at increasing the supply of affordable housing. Gilligan told Source NM that the office has “done a lot of work delivering a lot of subsidies to really great housing projects across the state.”

But the scale of the housing shortage, a problem she described as 15 to 20 years in the making, requires a department with more staff, more visibility and more autonomy. The housing shortage that has compounded since the Great Recession, combined with ballooning construction costs due to inflation in recent years, mean a new department or division is necessary.  

“It really needs to be given the kind of positionality within the state government and sufficient resources and staff capacity to succeed,” she said.