Whats good for the goose

The story behind our fair and historic city is a long and romantic one. It is also filled with assorted groups claiming Northern New Mexico with swords and knives and later being overthrown. The dirt we grow our roses in has been governed by several nations and has been subject to differing methods of land ownership verification over the last 400 plus years. Today one gets a title insurance policy when one buys real property, most of the time. On occasion a family transfer occurs and title is not researched and insurance is not purchased because there is a presumption of clear title on behalf of the family’s elders.

You can trust anyone you want, but it is usually a good idea to verify what they are telling you; check on what they are selling you. While there are rarely title insurance claims filed, probably because the title companies do excellent research, there are too often bad feelings and threats of lawsuits after a simple real estate transaction. Many times that has to do with someones perception of what a Realtor is supposed to do or say, or what the seller did or did not disclose. A leaky roof is a very bad thing to discover in your new (to you) home, but it happens to the best of us. As we rarely get rain and or snow to test the integrity of our roofing systems, months can go by without a drop of moisture while the tar or foam or aluminum flashing holding out the moisture is failing slowly but surely. Then when we get a big wet late April snow storm, it may feel as if the seller was dishonest in not disclosing a roof leak. But did it ever leak before? That is a difficult question to answer with 100% accuracy. Some sellers might not be honest but I would submit to you that most are.

So buy a home and ask lots of questions, get lots of inspections, order and read lots of reports so when you walk in the door for the first time as the owner, there won’t be surprises and disappointments. Buying a home is not the time to save a couple hundred by choosing not to investigate the quality of the construction of your new dwelling.

Some roof leaks, canale leaks, skylight leaks and other places water can get inside are only wet for a few hours, plenty of time for them to dry while we are at work or in Albuquerque shopping at Costco. Go away for a week and who knows what is going on inside your home. I have seen homes so large that I doubt the owners can physically see every inch of their home on the inside to even know if a leak exists. Vigilance is a good thing when you are fighting leaks, and other unwanted invasions.

The wisdom of owning a home usually is greater than leasing, but when your home requires a bunch of work just to bring it back to normal, it may feel like you are not doing the right thing to own a home. If you were leasing you could just call the landlord, right? Let’s hope you have a good landlord; most are good in my experience. But the money required to maintain a home is not somewhere to skimp and save. The true savings in home maintenance seem to be when the owner can do much of the work herself without having to call a professional. Painting, tile and grout, cleaning, re-sealing wood surfaces, are all known to be projects an owner can take on with confidence. Electrical and plumbing maybe require more journeyman help than Uncle Jimmy who is handy with a hammer. You must keep the home in good condition if you want it to maintain value. If you want it to increase in value, consider adding on with a quality addition, or remodeling key areas of your home, such as the kitchen.

If you were not up to speed on our particular market characteristics, appreciation of home values is still a story we will hope to write in the future. If you find a home that has grown in value over the last 5-7 years, either it was bought for a song and is now fixed up or the owner make improvements that added value. Just running the vacuum and washing windows will not make your home worth more money.

Funny how I can show a home to a couple that says they rarely cook and yet they are quick to criticize a home with an outdated or small kitchen. If I ask them why they care, they are slow to admit it makes an impression, good or bad, on their visitors and house guests. Hope springs eternal for the day when a homeowner stops trying to keep up with the Joneses and just lives a simple and happy life. Then there is the shock when they find out their home seems to be a mid-century modern with a certain panache that makes it “unique”. Speaking of styles what exactly is soft contemporary? Is that something you can define or put your finger on? Does it mean contemporary but that some of the hard and straight lines have curves in them? Someday I will catch up on the jargon. Still my fave is 5 minutes to the Plaza. The most fun a person can have when they live south of St. Michaels Drive and try to get to the Plaza from home in 5 minutes or less.

Take a gander at this: home sales continue to climb, with April sales for the month well above last year’s April. I will let you look it up in the attached spreadsheets so you can have that moment of joy when you see the numbers.

So now an important question for you. Please vote by your site visits over the next month. I have been contemplating making this website more about marketing my listings, if I happen to have any, than just dry and hard to understand numbers. What do you think? Would you still come by and visit if you had to look at some banner ads with my listings? Many have told me I should charge admission for access to the information herein. I would settle for an occasional commission check from selling one of my listings from a feature post with photos right here. If you are not happy with the changeover to a more “retail” appearance, then make me an offer and you can buy this very blog with its history and first page of Google pedigree. Is it for sale? Show me something that is not for sale and then I want it. Speaking of the goose, I want to visit the Bosque soon and see what birds are hanging out there. I hear January is the busiest month.

Enjoy the spring and coming summer as we live in a wonderful part of the world with little to distract us from the beauty of nature and the mixing bowl of the people of Santa Fe.

You always hurt the one you love

When and if you ever choose to buy a home in the Santa Fe area, please consider treating yourself kindly and fairly and do the right thing for your family. Too many times a real estate transaction gets sideways because of poor communication or the lack of contact with customers. If you are interviewing buyer brokers to potentially work with, ask about the methods and timeliness of their communication habits. If you have a home listed for sale as a Realtor and you tell me you have not communicated with the owners of the home in more than a week’s time, I am concerned for your ability to do a great job for them.

Selling the home is the paramount task for a listing broker, but until it sells, is there not some minimum level of communication that should be reached? Would you put yourself in their position and think you would be perfectly happy without any communication for any period of time? How long would you be willing to wait between updates and reports of any interest or activity? A week seems to be about the longest tolerable time, to me. And what is that seller to the broker anyway? Are they not one of the most important business contacts they have while the listing is active? Realtors fight and claw to get listings, then amazingly drop the ball and stop the communication (why?) with their seller because they have no real news.

Being a seller of a home listed for sale is tough enough, with strangers walking through your bedroom and opening cabinet doors everywhere. No privacy and no taking a break from housecleaning and making it shine for a prospect. But if you are a seller and you know there have been showings of your home, or maybe there have not been many at all, should you expect an update or report from your chosen Realtor as to what they think is going on. Maybe as a minimum, the listing broker should share the feedback from the showings where feedback was provided. That can be invaluable and can lead to a serious consideration of the pricing and/or the condition of the home. When prospects continually say that they could not see the value of a home as it’s currently priced, that might mean its time to think about the price.

If I may be so bold as to speculate that your seller is someone you “love” — they are paying you a commission when their home sells — it seems they would be the last person you would want to hurt or treat badly. And yet it happens. And Realtors can hurt their buyers too, sometimes. A buyer who has chosen a Realtor to work with for assistance in purchasing a home should expect professional help and expertise. They should expect communication as befits the buyer’s agenda and timeline. Some buyer customers are going to buy in a couple of years. They likely do not expect weekly updates on our market conditions. How about the buyer that thinks they may be ready to purchase in the next 3 or 4 months? Seems like frequent communication would be in order. Don’t hurt the one you love; don’t hurt anyone, for that matter. But if you must choose because your time or energy is limited today, stay in touch with the ones you love. Days may feel long, but life can be unexpectedly short sometimes. Treat each day with respect, gratitude and appreciation.

Down to the wire

The hubbub encompassing the POTUS contest and many of the other positions up for voting is unique in United States history, say those who might know. This year may go down as the least active year for the Legislative branch of our national government, while the contest to see who gets to live at Casa Blanco lumbers on. I am not predicting anything, nor am I telling you what to do, but please do vote as if your future depended on it. The belief that your vote does not matter is the same mistaken belief that if you throw your trash along the roadside, it will not matter, And yet it does.

In politics, as in real estate, there is not always a fact-checker around to verify or dispute what someone says. If I say to you that if you buy that home on Main Street and keep it well maintained, it will grow in value 7% a year for the next 10 years, would you believe me? You should not. First I cannot predict the future. The chance of that coming true is quite small anyway. Because I said it does not make it true, either. If I say it 100 times it is no more true. Best to verify what I am telling you, along with those talking heads on TV that say they will lower your taxes, end all wars and make our cities and neighborhoods safer. A chicken in every pot? How about reducing nepotism and corruption. closing some special interest loopholes and keeping big, unaccountable money out of our decision making process?

Let us debate the relative merits of living in Santa Fe versus other towns in the Southwest. Let us debate the types of views you like from your portal, the number of interior steps are OK with and the sex appeal of radiant heat. Do you mind living on a dirt and gravel road? Are you aware of alternative energy sources people are using to heat and cool their living spaces? Are you interested in a rural area where you will have a water well and a septic system? Is the walkability of your new home important to you? When you and I discuss Santa Fe real estate, I will do my best to share my 30 plus years of experience and good judgment to help you accomplish your goals. If your ideas and goals are not supported by market statistics, I will tell you that also. Please fact check me and vet me for the type of professional you want to work with. My reputation speaks for itself. I approve this message.

The world of Santa Fe real estate is Flat

Pick your own ideal angle of repose, but mostly its flat around here when you gather the numbers. Five months in the books for 2016 came up as almost identical to the same five months of 2015. Sales are strong in the lowest price ranges and the best of the rest takes some time to move. Some seem never to sell. Maybe they just become listless? The foreclosure inventory is still a factor in some neighborhoods. When there is a home within a block or two of your home and it is bank-owned or for sale in a distressed situation, it affects your home’s value and marketability.

We could call the current mood the calm before the storm or another catchy phrase, or is it the early blip of a small recession or downturn? It is quite difficult to predict things will head the wrong way right now as so much activity and robust sales are taking place in our surrounding states. Friends of mine in Denver and Dallas report plenty of buyers and strong sales. Arizona and Utah are doing well. We, on the other hand, are working toward acceptance that someone moves here for reasons other than overall economic health and a new job. Our City administration and many power brokers talk about attracting and keeping younger people… those whose futures are bright and need high speed internet, a larger airport and better housing close to services (walkability). They can consider Santa Fe and end up choosing another city. So the push is on for more nightclubs and places to consume alcohol as if that is the answer.

You may know of the plans for rapid transit thru the heart of Albuquerque (along Central Ave) that is intended to establish a backbone of economic growth. People will want to live near it and be able to get anywhere in 20 minutes. What is along that route? Old Town, Downtown, Hospitals, Rail Runner stations, UNM, Nob Hill and the farther reaches of East and West Central that is the historical Route 66. It has been a commercial route for decades and over the next 20 years we are likely to see many housing units built within a couple blocks of Central for people in all stages of life. Santa Fe does not have a similar geography nor the will to create the infrastructure that would support the growth of our economy and create jobs and the housing that people need. We don’t even know how to attract or keep our younger population or if we really want to. Some prefer to keep things the way they are now. Meanwhile the gap between the haves and the have nots increases and the average age of our citizens climbs higher.

An interesting statistic I just saw showed that nationally the average square foot size of a single family detached home reached 2500 square feet. That is the highest ever, I believe, yet the longer term trend lines show more single person households and smaller dwellings to be more in demand in the future. Maybe that is only for the progressive and innovative communities that are able to attract the most recent generations of workers that have a slightly different set of needs. 2 car garage? Maybe not so much in the future. A half acre of land surrounding your personal palace? How do you ever build a community when neighbors never talk but only wave as they come and go? Are communal spaces (shared gardens, parks, areas to get together) necessary for long term health and growth? Do we want to attract more folks my age (65) that are not going to be working much longer or do we want to attract people in their 20s and 30s that can build and expand their ideas and energy into making Santa Fe a place that has a pulse and a vibrancy? Many cities have serious questions to answer. Those are a few of ours.

The fudge factor, a strategy

Once upon a time, the Multiple Listing Service was in its infancy and a small group of people sat around a table at La Fonda and talked about their listings; price, location, condition, size, etc. That was the start of the MLS for Santa Fe real estate. Licensing was kind of optional and brokerages were usually one or two people. The entire population of real estate sales professionals was less than 15 people.

Times have changed because everyone knew how EASY it is to make a good living in real estate sales. We have had enough people get licensed in the Santa Fe metro area over the last 40 years that more are “former” members of our Santa Fe Association of Realtors than are presently active members. And 10 years ago we had hundreds more than we do now, probably reflective of the average number of sales per month. Comparing improved residential sales of 2005 with 2015, the typical month back then saw 233 sales while the most recent complete year saw 167 sales a month. No wonder our membership is down over the last 10 years. There is less pie to slice and distribute. Or is it less fudge?

But what about fudge? Is there more fudge today, or less? I have to venture a guess that there is more, even with fewer sales. My use of the word FUDGE is to depict cutting corners or selectively sharing information. Maybe disclosing some of the facts, but not all of them, is anther way to put it. Like Sammy, when asked how he did on his school test, said he fudged a few answers. Maybe you have a better word?

The fudge factor in Santa Fe residential real estate, in this blog post, describes the behavior and habits of some of our members as they strive for advantage in finding success with their seller and buyer customers. There are easy-to-find examples seen daily in the MLS database. A property might have been listed off and on for the last 5 years under 123 Main Street. Now that its back on the market again with the 4th Realtor trying to sell it, the address shows up as Main Street. The numbers are gone. That way the “history” of the property does not include the failure of previous listings. And it makes it look as if it’s on the market for the first time. The listing broker needs to be careful not to say “never before on the market” because that would be false. Even though effort went into hiding the information that it had been listing before.

In our state, there is no requirement that the sales price be published in print or website listings. We are a non-disclosure state for that information, along with about 5 other states. So finding out what a home sold for in the past takes some work and fact checking. That is, unless you are a Realtor and are able to find it in the MLS database listed as a sale in the past 14 years or so. (Earlier records are in hard copy format). A sale older than 14 years or so is not all that relevant anyway, but a sale from 2 or 4 years ago can be quite informative for a buyer looking at a home today. Is the new asking price a great deal higher than what the current owner paid 4 years ago, or about the same? What kind of work have they done to the home to improve it? If they did a complete remodel and added on to the footprint, its likely worth a great deal more. If they kept it clean and repaired a few items that needed attention, it might only be worth what they paid in 2011, or 2008 or in 2004…

You see, appreciation has taken a holiday in the upper half of our price ranges. Little or no appreciation has taken hold, sadly for many sellers, so a home is not growing in value year over year these days (unless it’s in the lower price ranges where demand is higher than supply). Shifting information around to hide or disguise facts that are not publicly released can serve to throw off a buyer looking to find out what a home sold for in the past. Is it a trick that works? And whom does it work for?

Mostly the fudge stuff is with address, price, history of prior listings, etc. There are systems in place such that a prior listing should be linked to a current listing if it is the same property. That means the same tax ID # and legal description. But still people try to put a new listing into the system as if it had not been listed a year ago with a different brokerage. Some will say their client gave them lawful instructions to do what they did to hide the information. Those could be lawful, yet may also be unethical. The same Realtor is a member of a professional organization with rules that run counter to those instructions. Look no further than about 12 years ago when a sizable number of sales  were reported at a dollar value of Zero or maybe $1. The Realtor that reported that sale would usually say that’s what their seller or buyer (or both) wanted them to do. Yet it clearly undermines the value and integrity of the MLS database and indicates that they wanted to play by their own rules.

The reporting at $1 ceased long ago, but we do occasionally see a sale go unreported. The property was first entered into our MLS as an active listing, The buyer and buyer’s broker learned about the listing by its appearance in the MLS. Somewhere along the line, one or both parties thought it would be a good idea not to have the price information known in the real estate community. So that listing was withdrawn from active status in MLS and no sale information was ever reported. Years later you could track it as an active listing that was withdrawn, but no further information could be found, until you searched title and saw a chain of transfer documents ( a deed for example) that showed the change of ownership. Maybe someone had a tax issue, or a divorce issue, or just a paranoia or privacy issue. Maybe they were too proud to have it known that they overpaid years ago and did not even break even with the sale.

Some other kinds of fudge might include the use of confidential data in ways that could be defined by some people as less than full disclosure. When a broker meets with a seller to potentially list their property, the seller often has work to do on the home, ranging from painting to landscaping, from moving a tenant out to getting professional photographs. There is a form the broker can use to officially list the home but not enter it into the MLS database immediately. A home can be on “waiver” with a simple stroke of a pen by the seller and their broker and the brokerage Qualifying Broker. The time frame while it is not in the MLS can range from a couple days to maybe a couple months. During that time the listing broker can proceed to try to market the home “on waiver” without the 750 plus Realtor membership knowing about it to the same extent and detail as the listing broker knows about it. They might secure a buyer within the waiver period and that alone might make the seller quite happy. To secure a buyer before the home ever hits the market in a public manner might seem like a victory for the seller. But did the home’s sales price equate to what the entire marketplace of buyers would come up with had it been made public? When we see daily listings show up in the new listing category in our “Paragon” (MLS) website, sometimes its a new listing that shows up at first as Pending (status). It always makes one wonder what happened when none of us knew about it.

There is almost never anything wrong with the way those things are handled. The problem can be the perception and appearance, plus the dialog a broker might develop, in their presentation script, that they have a buyer waiting in the wings and they have a corner on the market that nobody else has. Is the waiver process used fairly and honestly? I would say likely yes about 98% of the time. But when I get a blast email from a broker that distributes listing info on properties that are on waiver, and there are seven of them all on waiver and they are now sending out emails to market them, I do wonder what is going on. Is the effort to limit which brokers know about the listings? Maybe I got an email because I have sold homes in every price range and am well known in the industry, while others are not sent those emails?

Get your sweet tooth out and get ready. Call a Realtor today and ask them what they know about fudge.

Election year and a stock market shakeup

What are the stable factors in our economy today? Growth is primarily in service industry jobs, I guess. And medicine and health care. The energy sector is reeling from low prices and excess inventory. And yet people want to drill baby drill just outside the Chaco Culture National Historical Park because they think they can extract gas or oil there and make a profit. Or maybe they can just keep their equipment in use and their employees busy while the market flounders for energy resources. Politics have been the primary headlines for several months and now the fix is in with the GOP: Trump seems on his way to the party nomination. Nobody has jumped off of a highrise balcony yet, to my knowledge, but there is some consternation and worry about his rhetoric meshing with what really might need to be done. I have not found a great deal of honesty in the entire batch of candidates, yet when were they ever honest? A chicken in every pot? Read my lips; I will not raise taxes. Name your poison.

Wherefore art thou real estate? 2015 was a solid seven plus percent increase over 2014 for our Santa Fe area residential real estate market. Offices and retail seem to be more in demand, though plenty of vacant space still sits. New residential development is out on the edge of town, away from services and a long and painful ride into the centers of employment with existing mass transit options. The new stuff you see and read about close in is the upper and high mid range priced product that few locals can afford. The buyers for those homes are usually coming from somewhere else, which is great for Realtors and home builders. Defend your profession as being valuable to people if you dare, but do not protest too much. We all make money when another million dollar home is built off of Hyde Park Road or in Las Campanas.

The jobs picture in Santa Fe is not what we brag about. We have jobs and a low unemployment rate, but we do not have much to offer in high paying jobs requiring skills more advanced than providing excellent customer service. Sure, you have to know how to work with numbers, at about a 10th grade level. Manners and listening skills might have been learned at the family dinner table when you became a teenager. What is the unique talent that you bring to the equation?

We brag about quality of life, a near-perfect climate, clean air, views, the art scene, cultural diversity, small town friendliness and no traffic headaches. Anyone with a sense of style or half a brain (did Trump say that too?) wants to live here. But who can afford to, or should I say who would want to if the average priced home is a 20 minute commute to work and 15 minutes the other direction to get the week’s groceries.

Santa Fe city government is in dire financial condition with a budget shortfall of many millions. A classic argument has come up; should we tax our way out or reduce services and expenses? Even a combination of the two seems hard to arrive at as our City power brokers (not real estate brokers) resist laying off the nephew of the cousin you love and hesitate to add fees to water bills and anything that moves. Failure to face the problem some 6 or 8 years ago is now coming back to haunt us. Nobody thought (well some of us did but we were not being heard) the economic woes that began in 2007 or 2008 would still be burdens on our health and our prosperity. The loss of jobs over the last near 10 years in Santa Fe does not even come close to the lack of job reductions for City employees. Maybe the City Hall folks just wanted to keep their equipment in use and their employees busy until the economy turned around. But, you say, we have a Plaza to decorate and maintain!  And we have parades and fiestas and reenactments of royalty processions to support.  And we have museums to show off the history of the Northern New Mexico region. How much should we subsidize? If a free day at the museum can be enjoyed by a family here on vacation that spends $250 a day while visiting, it that a good trade-off? Should we charge admission to walk around the Plaza?

Real estate is not fickle. It is not wishy-washy. It is not undecided. When it decides to roar it will roar and when it wants to rest in the shade and watch the day go by, it rests in the shade. Real estate could and maybe should be the engine that will pull us forward, but it will need to be fairly distributed and available to all who choose to live and work here. Many say we have visionaries and creative people everywhere you look in Santa Fe. Can we put them to work on our limitations and true needs?

Once again I have asked more questions than I have answered. How might I fix that problem?

In memoriam, Dale Ball, 1924 – 2016

In memory of Dale Ball, I am providing a link to an article in the Santa Fe New Mexican from the front page of today’s paper. Dale made a large impact on the quality of life in the Santa Fe area by virtue of his civic and philanthropic efforts, along with making a huge impact on my life as my father.

Dale Ball article

If you knew Dale, you knew him to be charming and intelligent, forward thinking and always considerate of others. He gave so much to the communities he lived in that he made a positive and lasting difference to many people.

Wish you were here

What a time to be in Santa Fe! As of now we have over 70 inches of snow base on the ski mountain and the shops are full of gifts for those you love. We have many worthy charities that will accept your donation and we have hundreds of fine restaurants (and cafes) that will serve you a square meal for a small fee.

Visit the Plaza after dark and enjoy the lights and the festive atmosphere. Maybe join in with some caroling. Or travel to Chimayo and visit the Santuario decorated for the holiday season. At dusk the lights along the portals and eaves framed in front of the pale moon make a wonderful memory. If you are fortunate, maybe you will be invited to a staff holiday party with pizza at a large downtown hotel. But do behave yourselves as there is no such thing as privacy any more. If you are out and about, you are likely to be on tape or on film, doing what you thought was private between you and your friends.

You could show up on the base cam at the Santa Fe Ski Basin, the Plaza cam overlooking the historic town square (with a bandstand) or just ambling along the sidewalk in full view of a security camera under a roofline above you. Your family could be capturing your smile in front of a brightly lit tree with a date/time stamp and a GPS location affixed to the picture, forever placing you in that spot at that time. How quaint.

There are many apps that will allow you to post where you are at any time, if you are so inclined. It seems clear that different generations want different things. Us old folks may not want to share what we had for lunch on a social media platform, while some younger ones have apparently no boundaries and enjoy sending so much information out that there can be little doubt what they enjoy doing at any given time.

Enjoy the holiday season and don’t forget to track Santa’s travels Christmas eve as his reindeer drag him all over the world delivering presents and filling stockings. Is it too late to order online and have it delivered by Thursday noon?

If real estate is on your list, please know I am happy to talk with you about your wishes and your plans. Use a professional and get the most out of the experience.  Alan Ball  505-470-7153…

You had me at Hiya Howdy!

Greetings to all of you from distant parts of the universe, like Texas. You are visiting a blog (known to be available world-wide) that is local in flavor and focus. If you presently live in Santa Fe, you may find some familiar information about your town in these pages. If you are in the real estate industry you may recognize the data that is presented here as a glimpse of what is going on in Santa Fe NM residential real estate. If you are from Texas, I would like to see your hat and your checkbook please.

So a hearty Hiya Howdy to you too! Just over from the Metroplex for a long weekend of shopping and dining? Sundays are great days to absorb some of the culture of the area. There are museums that often have free admission on Sundays. (check local listings). There are scores of open houses to visit and explore. And there almost always is something going on down on the Plaza or in the convention center on Marcy. The parades and festivities are constantly expanding.

If you happen to pick up a newspaper, don’t be alarmed about the current headlines that say our Secretary of State MIGHT have helped herself to some funds that were not technically hers to spend. We may never know where she spent the money but how telling that a great deal of the money withdrawals occurred at casino ATMs. Ten thousand here, thirty thousand there. It’s all in the game.

Our local Boss, the Mayor, started out very popular (his father was Mayor years ago), but has fallen on hard times in the court of public opinion over some mixed messages and seemingly senseless decisions about proposed growth and new development. That subject gets anyone into trouble. Just ask Trump. But our Mayor is likely to bounce back. He seems a resilient fellow.

The aspen trees are about to put on a big show. If you can only take one short hike into the mountains nearby, choose Aspen Vista off the “Ski Basin” road and revel in the color and cool fresh air. And please have a leash in your hand that your wonderful and perfectly behaved dog is attached to. You know we don’t want to hear about your last job, your in-laws, your rotten luck at golf, and we certainly don’t want to have your dog jump up on us and try to lick our little faces. Just because they can.

Let’s look forward to a crisp and aromatic fall season here. Roasting chiles leads to pinon wood burning in kivas which leads to that first snow and the holiday season with enough joy for anyone’s chosen beliefs.

This just in: pleasing everyone is still impossible

The City of Santa Fe has a short term rental ordinance that attempts to regulate and control the activity of leasing a dwelling unit for a period of time less than 30 days. There are several reasons why many think this is necessary and just as many people think it may be invasive of property owner’s rights and their ability to make money on an asset they own. You may or may not already have a strong opinion about this matter, but what I wanted to mention is that there are some confusing stories and assumptions about this wide-ranging issue that are not black and white even to the casual observer.

Some of you may own or manage or know about a property that is leased as a vacation rental and its quite possible there are issues not raised in this post that deserve to be considered.

Santa Fe, through its Mayor and other City leaders, promotes the City Different as a wonderful place for tourists and visitors to see and enjoy all we have to offer (and spend money!). We all seem to welcome the film industry as an influx of non-residents beyond the typical tourists, plus we have some very popular events that draw thousands of out-of-town visitors here during the busiest season for tourists. Motel and hotel rooms are often sold out during Indian Market. On occasion between July and September, any decent lodging can be difficult to find. Over the years, websites such as VRBO.com and AIRBNB.com have grown quickly and are now merely the top two “national” sites available to help someone find a room or a house to rent in Santa Fe. Many locally owned and managed companies will help arrange a vacation rental for your next visit. Google vacation rentals Santa Fe and see for yourself.

Most of us welcome visitors and we offer them many great cultural attractions, art galleries and creative venues, restaurants, museums & shops, not to mention top notch outdoor recreational opportunities in the area. Those of us in real estate sales would like those visitors to enjoy their time here and then explore the idea of owning property here. It has happened that way for decades and newcomers to our fair city are a large source of business for many industries beyond just real estate. Yet the City has a limit on the number of short term rental permits they issue, despite the increase in tourism we are enjoying due to the economic recovery we are all very happy to take part in.

Many property owners might want a permit to use their property as a short term or vacation rental, but are told there is a waiting list and they may have to wait a year or two until their property can get approved. They might decide to market their property on one of those websites mentioned above and take their chances that a neighbor will not contact the City to report unauthorized rentals (based on the ordinance mentioned above). It is possible that there are twice the number of short term rentals out there as there are permits in existence. That seems high, but there is no foolproof way to check. Why not build a bigger tent and get more or almost all of the property owners into the program instead of being blind to that sort of underground economy that has grown to meet demand? Should the City do something to bring in the outsiders and enroll them in the program with an expanded number of permits? Maybe an amnesty program and/or the first year free for existing but not enrolled landlords to get in the program?

What is happening is not fair on many levels. Those denied the opportunity to rent their home for short term use might struggle to stay afloat in this town, The cost of living is a serious issue for many in Santa Fe. Should hotel and motel ownership be paying taxes and employing thousands of New Mexicans to then have to lose the occasional customer to a mom and pop rental available in a residential part of the City? The large events that fill up rooms around Santa Fe are usually in the summer months. They are rarely full once outside the summer stretch, but the bricks and mortar have to be there to accommodate us.

There is another major or minor issue: lodgers tax and the municipality tax that the City might be imposed on someone that realizes income from renting a room or an entire home. Should that income be taxed? Nobody escapes taxation completely and I am just referencing a City or Lodgers tax. No mention here of the Internal Revenue Service and how they would treat the income a property owner would get from their vacation rental. Is this a IRS tax loophole also?

What can you find online? How about a sweet detached guest house that has a full bath and a small but functioning kitchen? Would you pay $100 a night for that? Does the party running the ad mention that gross receipts tax is added on? Or lodgers tax. And if they collect such a tax, do they actually pay it to the State of NM? How is that audited?

Any gross receipts taxes paid in Santa Fe go into a fund that is distributed to various State departments. That includes money flowing back into the City of Santa Fe from the taxes paid. Without those funds, the City has to do the same job but with less money. Its not as if there are fewer visitors and therefore fewer demands on services. The demand is there but we are all a bit shortchanged by the lack of accountability and flow of funds to pay for what needs to be done. Street lights, environmental enforcement, safety officers ready to help with a disturbance or accident, food service inspections, animal control… you get the idea. There is always something you can think of that affects you directly.

Back to square one, the City website says 424 short term rental permits exist. I might be able to learn the number that are on a waiting list and will report if I do. Has that total changed since the ordinance was made law? How many units are actually used as short term rentals in the City, regardless of how many permits exist? Some units are in a commercially zoned area and are not subject to permitting. Others are outside the City limits and not subject to any such ordinance. Not only does the City attempt to regulate this event of dwelling unit use, so also do subdivision and development restrictions. How do those apply?

Is all of this even a problem? I guess it depends on what your perspective is. And whom you answer to.