UPDATE: The future of affordable housing in Santa Fe hangs in the balance as the crucial Paseo del Sol extension has been excluded from the city’s capital outlay requests for the upcoming 2026 legislative session. This development is vital for the Tierra Contenta Phase 3 project, which promises to deliver 1,500 homes, with 40% designated as affordable housing.
Despite the pressing housing affordability crisis in Santa Fe, which dominated this year’s mayoral race, city leaders have not prioritized funding for this essential infrastructure project. Homewise, the nonprofit developer managing the project, expressed deep disappointment. Deputy CEO Johanna Gilligan emphasized, “We really believe that the city, particularly the new administration, has an opportunity to demonstrate their commitment to affordable housing.”
City officials released a statement indicating that they consider themselves partners in the project, working alongside Homewise and other nonprofits. However, the absence of financial support raises significant concerns. The Paseo del Sol extension between Jaguar Drive and Herrera Drive is critical for initiating housing construction.
The need for affordable housing has never been more urgent. Since 2016, rents in Santa Fe have soared by 74%, while home prices skyrocketed by 80%. With a growing population and limited housing options, the city is facing a crisis that impacts its workforce directly.
Tierra Contenta has a complex history, beginning as a partnership between the city and private developers in the 1990s. Phase 2 of the development halted during the Great Recession, leaving Phase 3 dormant until Homewise stepped in last year. They committed to a $2.3 million agreement for the land, taking on the responsibility for developing the necessary infrastructure, including the expansion of Paseo del Sol.
Gilligan noted that the organization requires at least $6 million more in subsidies to ensure viability, highlighting that the affordable nature of many homes complicates cost recovery. The situation is critical as Homewise aims to break ground on the infrastructure in early 2026, with hopes of securing final plat approval from the Planning Commission in December.
The city’s Infrastructure and Capital Improvement Plan currently does not include funding for the Paseo del Sol project, even though it was previously listed. Mayor Alan Webber is set to present this resolution for a vote on December 10, 2025, raising the stakes for the project’s future.
Gilligan stated that despite ongoing discussions with the Webber administration regarding funding sources, including potential road impact fees, no tangible progress has been made. “We have gotten no movement on any source of subsidy for this project,” she lamented.
The city has previously allocated $8.9 million in funding for similar infrastructure projects, illustrating the potential financial support available if prioritized correctly. However, concerns over the city’s ability to manage these funds efficiently have hindered progress. Local lawmakers are frustrated, with District 3 Councilor Pilar Faulkner indicating a willingness to seek state funding if necessary.
As the deadline for the 2026 legislative session approaches, the urgency for action grows. Gilligan emphasized the importance of breaking ground to instill confidence in lawmakers. “We really do want to demonstrate that we are taking these state funds and deploying them as quickly as possible,” she stated.
The city initially demonstrated leadership by purchasing the land for Tierra Contenta, but bureaucratic challenges have stalled its vision for affordable housing through public-private partnerships. “There is no city in America that’s solving the housing crisis by building all of their own housing,” Gilligan pointed out, reinforcing the need for collaboration.
As discussions continue, the community watches closely, hoping that city officials will recognize the pressing need for affordable housing and take swift action to support this critical project. The future of Santa Fe’s housing landscape depends on immediate and effective collaboration between the city and its partners.
