Council - Regular Meeting

city, and then in the values for other communities in the county. Rents were generally pretty stable between 2015 and 2020, and the same was with home prices. They decreased through the financial recession and then were pretty stable through 2020. And then we see that in both rents and prices. There was a big job, about a 50% jump between 2020 and 2023, 2022. And then prices begin to moderate again. And this trend we see across the country is not just specific to Las Cruces. And then in terms of vacancies, we see that there was a very high vacancy or higher vacancy environment in 2010 and in 2017, but that's really turned in 2020 for for rental vacancy rates. We would like to see them around 5% to be able to allow the churn in the market. That allows renters to, you know, find housing and. At the price that they want and be able to have options. And that's in Las Cruces. It's at 3.5. So that's significantly lower. And then on the homeownership side, we would expect to see about a 2% vacancy rate. And that's also below the 2% mark. So we're seeing that the vacancies show tight markets in in Las Cruces. And then the analysis has more. Data shown by different price levels. And at lower price levels there's even tighter vacancy trends. And I'll pass it to Heidi to talk about the survey findings that we conducted for both the consolidated plan and the affordable housing plan. Thank you. Avila I'm going to speak a little bit about some of the engagement that we did to support these two plans, and

then I will pass it back to Avila to talk about projected needs. So she's going to get into a deep dive in terms of what to expect in the future and the types of housing that people will need. And you're going to come back to me for a bit of a wrap up. So to support the consolidated plans with the HUD required plan as well as the state plan, we conducted a survey. We've got a really good response. Almost 800 responses. 70% of them lived in Las Cruces. So we have a really good sample to analyze about needs. Your homeowner, the share that we're homeowners is pretty much on track with your homeownership rate 25% for renters. If you're doing some math and you figure out that doesn't add up to 100%, the balance of those are people who what we call are precariously housed. So they're overcrowded, they're living with friends or family. They might be in a tent, they're living out of their car. There are people who are very housing unstable. About a third of respondents were over 65. Another third or the smaller third. There's some overlap. There had a disability 13% single parents, 29% said they lived in an overcrowded household, 60% 62% identified as of Hispanic descent, and a little more than a third were very low income, so had incomes of under 25,000. We ask a number of questions that are captured. The total analysis is captured in appendix A of your packet. But just to give you a highlight of some of the most important takeaways from the survey, I wanted to start with those living in poor or fair housing condition. We asked people to self assess the condition of their housing, and then we also asked them if they say I live in poor or fair housing condition, what improvements are needed? This gives you what we call a cross tab. So those responses by demographic groups. The headline here is that precariously housed in single parents reported the highest rates of living in poor or fair housing condition. 40% of respondents to the survey that were either single parents or

precariously housed said they live in poor or fair condition housing. We asked what people need, they said cosmetic improvements, cooling systems, interior walls were a pretty high need, particularly among people living in mobile homes. And when we talk about we asked people with disabilities what type of accessibility improvements they need. The top needs were grab bars, ramps, alarms to notify if somebody with a cognitive or behavioral disability leaves the house. We also give ask a question about displacement. We don't use the term displacement, but we ask people, have you needed to move or had to move in the last five years when you didn't want to? Overall, 13% of respondents to the survey said they did have to move in the last five years when they didn't want to. Those who are currently precariously housed renters, single parents and those with a disability had the highest rates of displacement. In response to this question, on the right hand side here, under the reasons for displacement, I would invite you to take a look at that box. We had an unusual response based on surveys. We do these types of surveys all over the country. And we learned in Las Cruces, the top reason for being displaced was losing a job or having hours cut back. Almost typically I typically or almost always see the the most common reason being that rent increased. So we're in an interesting economic situation right now. We definitely are seeing that reflected in the displacement question. We also ask people, what do you need to feel more secure in your housing. And this shows you those responses by household type. Many, many people said I need rental assistance. I need help paying rent. That was true of people with disability, people living in overcrowded households. But we also saw that people said they needed to make critical money to make critical repairs. And that was true of our large households, people of Hispanic descent. You'll notice here in the over 65. So the senior

population in the non-Hispanic white population, the majority of folks said, I don't need anything that tells us that those folks are more likely to be housing stable than other demographic groups. So with that, I'm going to pass it back to Avila, and she's going to get into some of the data findings and projected needs. Thank you. So in terms of affordability, this figure here shows what the average annual wage is in the county for different industries as well as what can afford, what can they afford to rent and to buy. And then how does that compare with what we are seeing in the market in terms of the median or the typical rent and home prices? So here we can see that at the average wages with one earner, people are generally able to afford the median rent. However, there are a few industries, including leisure and hospitality where that is not the case. And these industries don't represent like a really small share of the county jobs they actually represent around close to 20% of county jobs on the rental side. And then when things get really dim is on the purchase affordability. So with one earner at the average annual wage, none of the industries can afford to transition to home ownership. And then with two earners now we're seeing a few industries financial activities, professional business services and public administration being able to afford this. But these are not the industries that are expected to grow a lot in the future or that have been growing a lot in the past. So yeah, so, so things are really tight on getting this renters into the homeownership side. And then the next two exercise are called market gaps. We did it both in the rental and in

the rental to own market. And it shows the distribution of renters by income as well as the distribution of units that are affordable to them by income. And then the shortage of the surplus for each of the income levels. So we can see here that in 2024, there was rental gap of almost 4500 units in Las Cruces for households earning up to 30% Ami and in the county, this gap was a little bit higher, but most of the gap is concentrated in the city and it's really concentrated on the zero 30% Ami so those very, very low income households that need rents at the sub 500 level, it's important to know that at the 120 and over 150% of the area median income, those red numbers don't mean that these people are cost burden or that they don't have units. What it means is that they are occupying units that would be affordable to lower income households. So then that creates another sort of distortion in the market. Oh, I don't know what happened to the ownership side, but I do have the numbers if we want to discuss them later in terms of population projections, we see that the county is continued to it's expected to continue to gain population through 2040, with a slight decrease in 2050. And we also see that the number of residents under age 20 and young adults is expected to keep decreasing while the population age 35 to 64 will remain the largest. But we are going to see a significant increase, particularly of those age 75 and older. And again, this is in line with what's happening at the state level

and at the national level as well. What does that mean in terms of projected affordability needs? We did an analysis where holding the share of the population that lives in the city constant, so around 51%. If we assume that the city will hold to that share of the population within the county, then based on the household formation rates by age in 2023, these are the number of units that we would need to accommodate the growth in household if the city were to continue to keep its army distribution. So basically, without displacing all the low income households. So then you would need four units below 30% Ami 675 rental units and 225 ownership units. And this is between 2025 and 2045. So in the next 20 years, and then for 30 to 50%, 428 units and 165 61 ownership units for 50 to 80%. We have 521 rental units and 375 ownership units. And for households with incomes between 80 and 100%, 193 rental units and 245 rental units. Some of these units will become affordable as older residents age in place, and this is specifically the case for the very low Ami ownership units. We don't expect those units to be produced by the market, but others will require tenant subsidies. Those are the lower Ami rental units and others will need to be added through new construction of affordable units and filtering of older units into more affordable price brackets. In terms of how this compares to the city's building permit rates in the last couple of years, it's actually very it looks very good. You've been building more than what's projected to be needed. The problem is reaching

those affordability levels, especially at the 0 to 30% Ami. And then we'll leave you with the consolidated plan update. So I'm going to wrap up with some of the events that are happening the next two days. Before I do that, I do want to acknowledge all the great things that the city's been doing. You definitely are a model for the types of units that you've been building, the kind of investments you've been making to help stabilize very low income individuals. And you see that in the data. Your needs are going down. You still have them. And we're we're up here presenting the negative because we're telling you what people told us. They still have in terms of needs. But I don't want that to overshadow all the wonderful things the city's been doing. The consolidated plan is Avi mentioned earlier, is the HUD required plan. It is out for draft comment now. There's a 30 day comment period that is required of the federal government. And this is a plan that tells the community how you propose to spend your block grants. Those are the Community Development Block grant and the Home Investment Partnerships program. So you're required to come to the community and let them know how you intend to spend those dollars, what your vision is over five years, and how you propose to spend them the next year. When specific requirement of the consolidated plan is that it has to meet critical needs. And in terms of critical needs, we often look at that in terms of poverty. I had talked a lot earlier about what people told us their needs were. Avila talked a bit about what the the community survey out of the census is telling us. And this gives you a sense it's a more sort of dialed in specific need for the consolidated plan. These data pieces are connected. They're coming from different sources, but they're they're all telling us the same thing, which is single moms, single parents have very high rates of poverty and are very likely to be

housing unstable. Your poverty rate went up a little bit over the last five years, but you have done a really nice job when you think of looking at that gap that Avi talked about providing housing and stability for those people who are making less than 30% of the Ami. People with disabilities also have very high poverty rates. And as we saw in the survey, they need accessibility improvements and rental assistance to become housing stable. And that's what the consolidated plan focuses on. This gives you the 2026. So the one year funding allocation that is proposed for the CDBG and the home program, those federal programs have specific requirements about the activities that you can invest in. And this is the city's proposal to distribute those funds across a wide, wide variety of categories. CDBG would primarily be invested in home rehabilitation activities, as well as public infrastructure and public facilities. So improvement of playground, some weatherization improvements, a portion of CDBG 15% one 5% can be used to help social service providers who work with special needs populations and people with with people experiencing homelessness or at risk of homelessness stabilize their population. Starting with the Mesilla Valley Community of Hope, you see the proposed allocation of CDBG dollars to public service activities to be able to assist those high needs individuals for home. That's the housing program. So those dollars are invested in both the creation of new homeownership opportunities. Las Cruces is pretty innovative for that use of home. A lot of our clients pair home to provide more leverage to create low income housing tax credit projects. You here are proposing that a share of those dollars go toward homeownership

opportunities. And Avila talked about that need. The balance of those home funds will be allocated or proposed to be allocated to tenant based rental assistance. So thinking back to one of the top needs in the survey, rental assistance was a very high need among the lowest income populations, and the distribution of home dollars would help address that. So your input is next. But before we transition to that, I just want folks to know the there are four opportunities for input for the consolidated plan in the 2026 proposed spending plan. Two of those are tomorrow. Two of those are on Wednesday. They will be held at Sage Cafe at the Senior Center, the community of Hope, and then closing out on McClure road. We're we're holding those in the afternoon as well as in the evening to give people a variety of opportunities to come. There's also an opportunity to email us, email Natalie, call us, give us public input over the next 30 days following that public input, the end of that public input, we will consider any comments, make any changes to the consolidated plan, and then submit that to HUD that is required to be submitted by May 15th. So with that, we'll take questions and open it up to discussion. Council members. Thank you. Thank you Mayor Pro Tem. So yeah, very very interesting presentation. It's nice to see kind of the general feeling of of living in this town actually with some actual numbers behind it. I have a few comments and questions. So on slide four, our packet here I

think is one off from yours. So 14 or 15 maybe. Yeah. Okay. So yeah, I think this should be a pretty eye opening slide for everyone who lives or wants to live in town that nobody can afford a median home in this town, right? That's kind of the takeaway. And then, I mean, in certain industries. I personally felt that I would struggle to afford my own house. I bought it in 2017, and it would be very challenging for me to afford that at its current value. So, yeah, I think that's that's very eye opening and just I don't know what the, the true meaning of, of this size. So I guess related to that, I think 15 so when we're talking about the gaps here, I think we said that in. So what, 21 and over 50% of all those red numbers, which are a negative gap, which means that if theoretically, if we had more high end, higher end units, that those that there are folks that are being brought forward $2,000 more for rent than and would pay it, and if we had 3000 more like, I guess I would say luxury apartments like there instead of where there currently are, and that those would trickle down. Is that kind of the it's a there's a quite a mr. mayor and council members to answer that question. There's quite an ongoing debate about that whether or not something called filtering. So would people move

into the right priced housing for their income if those units were available? A lot of times with folks who are earning that much money, they tend to rent down because they're saving. They're trying to get a down payment, save for a house. They may have other, they may have child care needs. They have medical needs. So in theory, yes, there is an opportunity to provide housing at that level, whether or not people would take advantage of that and move into those higher priced units would be their their personal preference. Yeah. Okay. That's that's kind of what I was thinking. You know, back when I went to for a very long time and I kind of did that personally. Like I moved up into a, whereas at the time a very expensive apartment for town, which is now barely on this list, which is quite, quite unfortunate. And. But yeah, you know, I could have probably moved. And so I would also I was just asking about what the takeaway should be, and it's probably not in particular should be because it's debatable. And, and I think from a personal experience, I would I would agree that that's probably not what we should take away from this. And so. I guess with that in mind, and so some of the blockers are for creating, if we wanted to create housing at a certain price point. Do you have suggestions about what you can do or that's there's not really in the scope of this report or it is in the scope and it's forthcoming. As we wrap up the affordable housing plan. It's not necessarily captured in the HUD document or required of the HUD document, because that's real specific to those funding sources. The city has an investment strategy that has guided its work over the last few years that I think is

fair to say, has been very successful. So the city has been really strategic about using city dollars and also state dollars, applying for funds, leveraging those and then keeping that money flowing by trying to structure properties in a way that they're not. They don't have so much debt that you can roll over those those grant funds and keep applying and keep building homes. So I would I would argue that the city's recent track record of building, investing in the right types of housing and building housing that's needed, and I think Natalie can speak more to the lease up rates. But I would argue that they're showing that that's very successful. In addition to continuing to invest in low income homeownership opportunities to create more stable housing and move people into homeownership, who want to achieve that are really central to being able to meet needs. That 0 to 30%, though, in those truly housing unstable folks who are moving a lot, who are precariously housed, need both housing and supportive services, so they need a little more of a sort of a bigger package of delivery of housing. So public services are key for that. One of the one of the, I would say, challenges to being able to meet their needs in particular, is the federal funds that came in after the pandemic to stabilize the economy, were really useful and were put to great use for a lot of different housing opportunities. Those obviously are going away. There may not be funds like that in the future, so that just the funding constraint to be able to continue the good work the city is doing, particularly from the federal level, I think will be a big challenge. Okay. Broadly speaking. Are there policies that the city should consider adopting to stabilize prices to or to influence the private markets of housing? I guess, you know, back to the affordability example, that

apartment that I lived in when I moved in, the rent went down in the nine years that I lived there. And, you know, since then it has leveled and that owner built the property with a certain business model and certain rents. And like I said, even during that time, they reevaluated everybody's rents in real life, you know, when they were going to have to be charging some fees that were charging and got rid of those. And then in eight years they're just like, well, cool. Rent is not as expensive. Thanks. So and I'll invite you to talk a little bit about this, but one of the things you can do, which she acknowledged is keeping up with demand. So you have done a really good job. The city's pretty unusual relative to a lot of cities in, in building in permitting units and keeping up with your household growth. Avila talked a bit. We've talked a little bit earlier, though, about some of the comments that she had received from interviews that she done. Avila is doing work in Santa Fe as well, where we had developers say just model Las Cruces. Las Cruces is new comprehensive plan in your code. We have some some minor recommendations for changes to the code, which will come out with the affordable housing plan. But for the most part, it feels like those changes have been very well received. And you're seeing that in the return of of development, appropriate development. Nice. That's that's great to hear. And yeah, I think that part is, is a matter for for cities everywhere. And it sounds like we're getting that feedback. So I guess to that end when so the some of the highest needs were repairs interior and repairs. Was there concern. I guess whatever the is there wasn't more money with the permitting, is it. We want to I want to add

on a little bit of, you know, in terms of getting promoted or, or maybe was difficult to wait for the new code and maybe we're doing stuff that's helping. Now we ask people, why haven't the repairs been made? And most people say I couldn't afford it. Occasionally among renters, people say they are afraid to tell the property owner for fear of being evicted or a rent increase. And so there is a segment of of the renter population, largely low income renters, who will just tolerate units in fair or poor condition because they're afraid their rent will go up. Yeah, that's that's something I hope to be in the report. And something I want to look at is. Ways that we can, you know, kind of encourage landlords to improve their properties, but at the same time assuage fears of rent increases and make sure that, you know this, if we want people to live in a certain minimum standard, that that's no excuse for somebody to be like, well, I need to, you know, spend the next $1,000 to upgrade the units. I'm going to let them go rent. You know, we want to make sure that that doesn't happen. But be interesting to see in the report. Sorry, I've taken a lot of time, so I'll give it up for now. Thanks. Other questions or. Councilor from. Thank you. Thank you for this presentation and super interesting information. I think in terms of compelling us to keep moving forward. And I know I really appreciate hearing seeing the affordability index. I know I hear that from my students all the time. Like I will never buy a house. That's not a thing that will happen for me. And I teach at the community college, and that's pretty depressing, you know, especially when in theory, you're training folks to get a better wage. But that wage will never match the the cost of buying a home. It's it's a bleak picture that I'm

glad that we're making efforts to, to address. But I was wondering if you could speak about two specific things or one thing and then a secondary thing. I think home and CBGB. However, you know, are both up for some discussion in the federal sort of funding area. Just this I think right now I'm wondering if you can talk a little bit about what that means in our context specifically, or if you have a sense for what that means in our context. And then secondarily, I think part of the question about mobile homes and, and or livability in places that may not be traditional homes in the way we think of them, large apartment complexes in the ways that we think about them. I don't know that they have the same access to certain types of funding or support at historically or or. If I misunderstand that, but I don't think we can use some of that federal funding in the case of supporting people who have mobile homes the same way we could, for someone who who has a home that they're trying to improve or make lives more livable, that's on a foundation. So I'm wondering if you can talk about those two things, the federal funding thing, and then also a little bit about mobile homes. I think mobile home, I feel like we have a little bit of a blind spot in our plan or work that mobile home folks are really particularly vulnerable in a lot of cases. So I'm hoping that you could talk a little bit more about that. Sure, I'd be happy to. Thank you for those questions. I would also like to acknowledge, which is not in the slides, the survey slides that I presented today. We do ask renters about the barriers to homeownership. And we've got quite a bit of detail there. And it is an inability to come up with a down payment. Assistance is a big one. And so there are programs that you can utilize for that. Or I'm afraid I won't be able to afford a mortgage payment on the federal bill. There are two bills in the federal bills. There are

two bills in the in the in Congress right now. One is the housing for the 21st century, I think, which was the House bill and the road to home. I may get this a little off was in the Senate. Those are moving forward. I think they're in reconciliation. I might be wrong about that, but your mayor is probably there and would know is probably involved with this. Those should a couple of things that those do they I think they would codify CDBG Dr. Which is the disaster recovery portion of it, which we haven't talked about disaster risk, but we do acknowledge that quite a bit in the consolidated plan. And we talked to county folks about it quite a bit as we were preparing this plan. So codifying CDBG Dr. Is huge because that would allow CDBG dollars to come in and address a lot of rehabilitation, rebuilding infrastructure. There are some modest changes to CDBG, and this is a point of much reconciliation that broadens CDBG to be able to use to invest in housing activities more. One, the Senate bill actually ties the continued receipt of CDBG to making progress on housing supply. So it has a penalty if for communities and the. I just saw an analysis a couple of weeks ago that looked at the communities where dollars would be taken away. Las Cruces isn't one of those to my memory, but it would penalize communities that are not keeping up with with housing supply and take away some of their CDBG. So it does have a pretty aggressive this is not this type of thinking around. CDBG is a homeownership tool has not occurred to my knowledge since the program was put into place in the 70s. So there's some positives there. There's also a lot of reform for home to make homes a complicated program, and it's difficult to use. And my understanding is there's some some reforms that would make home a little more efficient. Thank you. I just wanted to follow up because

that is a big topic of conversation and why we have to keep on. I think thinking about this in this context, I don't know. If not, I'm going to pass it to Natalie to answer. I didn't mean to put you on the spot. It's just seems very germane at the moment. So Mr. Mayor Pro Tem Councilor Curran. So we have looked at we can use some of our CDBG to work on mobile homes. We primarily do Ada ramp improvements for that. We could look at. We have thrown around a replacement program for mobile homes. We just want to make sure that if we take out a mobile home and put a new one, that somehow the other one is disposed of or eliminated from the housing market and in its entirety. So if it's not, we just don't want to see those get recycled in the open market in the future. And then we would have to retool the home rehab program because and it'd be almost we'd have to put some thought into it because we currently secure the repairs of our home rehab program against the property, and so we'd have to structure it a little bit differently for mobile homes and a mobile home park. So it's not outside of the possibility. We would just have to figure it out. Thank you. And I'm not I, I'm not necessarily saying that I think we should embark on a new venture. I just think it's an area where hearing some of what's been reflected here and thinking about what's going on with some of the most vulnerable people, I think that I've heard from in my district, there is a lot of exploitation and fluidity in the mobile home market that that leads to people being in even more tenuous housing situations down the road. So I just was curious to hear about that. So thank

you. Other comments or questions? Councilmember. Thank you. Thank you so much for your work on this. Just having lots of thoughts about. What all of this means and how, you know, we can put it to good use. I think there's a couple of takeaways for me that I'll name before I just have a couple of questions. I think I feel like for me, the two biggest takeaways are access, regardless of income, that there is just not enough, right? There's just not enough rental units, whether it's affordable units or fair market price units for people who can afford the higher end apartments, if you will. So just like access to actual quantity. And the second one is access because of economic anxiety. And I you know, I spoke briefly about this at the budget retreat around. So maybe not so much policies and ordinances that will incentivize more building because I think we already did that with realize. But really more policies and programs that go towards economic mobility of our community. Like I'm, you know, page eight, our page eight. The fact that in the survey, there was 36% had household income of less than 25,000. To me is deeply concerning. And, you know, I think that to me, poverty is a policy choice. Like I deeply believe that that's true. And we you know, what else could we be doing to improve the quality of life and the economic mobility of so many of our families, whether their families, their single folks, whoever they are, single parents, people who are living in overcrowded households,

whatever the case is that that to me feels like a huge undertaking that we really must explore. And I that's probably outside of the scope of your work with us. But I think that is important for us as council and city management and Natalie and a lot of us here to really try to tackle, because that to me is deeply concerning. And we'll probably see even more why in the economic outlook after this. And then, you know, as I think about things like the Family Prosperity program, which I'm a huge advocate for and have been for a long time, part of part of that is because of this huge concern that we're seeing in terms of access, because of economic anxiety that our communities facing. And then on page 11, our page 11, when I'm thinking about, okay, what what do you need to be able to secure housing, rental assistance money to make critical repairs is consistently the top two. So it's money, it's cash. It's cash in people's pockets that could make their lives so much more stable. And to me that this is, to me the biggest takeaway. And, you know, I had talked about at the budget retreat, I wasn't even prepared to have this sort of moment. But at the budget retreat, I did speak about, you know, institutionalizing the Family Prosperity program because we, you know, we had a pilot project that was tremendously successful with a couple of nonprofit organizations. And, and I just think it's incumbent upon us to think about institutionalizing it and making it permanent. And I know what folks will say or or folks who don't believe in such a program will say, but the numbers are right in front of us. Like, this is what people are struggling with the most in order to have more secure and stable housing. And and us as municipal government should absolutely take that as a

challenge and a responsibility to try to address. So I just wanted to name that. And. I think, Natalie, I have a couple of questions for you, probably actually, as I as I see the numbers for, you know, an aging population, we also know that and I don't know if this changed. I think this was as of last year that our unhoused population is also more and more seniors experiencing homelessness. Is that I mean, to me, this is very concerning, right? That like, again, lack of access to just actual access to housing with an aging population. And, you know, I think we're we're making huge strides at that. But I am curious if you can speak to that concern a little bit. Mayor Pro Tem Councilor Bencomo. So, yes, we do anticipate that that senior homelessness population will continue to rise. And the plan does have a specific section, if I'm correct, on housing needs assessment for people experiencing homelessness. I do just want to give some next steps to. So after we present this plan and and have our 30 day comment period, we'll adopt the consolidated plan. And our 26 action plan will be submitting that to HUD for review and their corrections if there is any. And then we'll shift focus to the affordable housing plan, which will have targeted objectives for each housing type and each housing population. As staff, we will use that to inform our affordable housing programing moving forward. So when developers come to us, rather than them telling us what they're building, we're going to tell them you need to build XYZ or we are supporting projects that prioritize XYZ. So we'll work on finalizing that plan with Heidi and Avila. I'm going to get it right. Adopt. We'll work on adopting that and submitting that to

Housing New Mexico. And then on top of that, our plan is to bring back all the feed feedback within both plans and then work on some ordinance and policy changes, both programing wise and then whatever we need to do in terms of the Affordable Housing General Oversight ordinance. And then we'll work on some project implementation to address the strategic plans within both planning documents. So we're very much about implementation. So we don't let our plans sit on the shelf. We like to implement our plans. And so you'll see that work moving forward. But we are concerned about seniors. We saw it with Padrino. We were 90% leased up day one. We are seeing it a little bit with peach Tree. So we had 142 applications for 144 units. Repeat that. We had 142 applications, and then there's only 144 units. So in the lease up data or the application data, we phase one has less three bedrooms. There's more three bedrooms. In phase two we had 42 applications for 18 three bedroom units. And then for the public who may watch this later, we still have availability in the one bedroom. So we're looking to fill those. But certainly the need is telling in those pre-leasing numbers for all the housing developments. Yeah, that's that is very telling Natalie. Thank you. When can we expect to see the affordable housing plan? Oh, do we have a timeline? We we have a we have draft sections which will go to review of Natalie and her team. So I would say a month to a month and a half before we get through the review process and then the recommendations. And then I assume we'll have a work session as well. Natalie. Yes, great. Thank you for that. I think those were all of my questions. I actually know I'm

wondering, obviously, this is really great data, and I know that we have another very localized survey happening. I'm wondering if I don't know if the public health coordinator can speak to how, you know, that group plans to. Coordinate with this. And if that's they're not here, it seems like okay. Pro Tem Munoz and Councilor Bencomo I can have Anthony. I can text him to come down if you'd like. That's okay. I think we're probably moving on. But, I mean, I think this is an important conversation for, for public health coordinator to, to be at in the future, especially as we have our, you know, the mayor's. Project on the survey here locally. I think I want us to make sure we're these aren't siloed and that we're, you know, they're moving in conjunction together. So I think to me that feels particularly important. And yeah, I do think that is all of my questions. I feel like I had one more, but now I'm I lost my train of thought. So thank you all so much I appreciate it. Thank you, thank you. Page nine. And thank you. Avila Heidi I we pronounce your name like five different ways here. So we'll get it right. We'll get it right. I grew up in 19. 1990s. And we, you know, the the common thought then was you're going to get a job and you'll, you'll get a home. And so pains me to hear my son just graduated from college and his contemporaries say I'll never afford a home. And I don't know that I'll get into a house. So obviously we have some some work to do together to look at this solution holistically. So

I wanted to talk about the pressure that you see under tenure, where it says precariously housed. You know, the population distribution is 18%, 65 plus 75 plus will will continue to grow in addition to 65 plus. I know that as Councilor Harris mentioned or alluded to, I think that's important for landlords in who have to be aware of of the environment. It seems like we went from winter to summer all of a sudden and, you know, they weren't happy tenants and tenants who are comfortable. And so I think that's important as we look at cooling initiatives throughout the city, I, I sit on a board. We we raise money to contribute money to help our seniors in our in our city, who need things like grab bars, air conditioning and roofs. It's so hard to get around and I'm fortunate I'm not. Having someone really helpful, you know, move around tools and and things like that. I've had the opportunity to visit some sites and, and it is difficult to see, you know, where our seniors who've been there, who've residents who've been there for us are struggling to get around. And we go into their homes on a sweltering hot, and they request things like air conditioning, ramps and grab bars. And so we're able to find that as, as possible. But we we can't be reaching proportion of what's happening in Las Cruces. So I just wanted to to hear from you. What what pressure do you think you see on

precariously housed homes? What what pressure do you see on the market? Sorry. We're discussing who's best to answer this question, but in terms of the the seniors needs definitely the grab bars, the cooling systems, those overlap a lot with disability. And so the incidence of disability once a senior turns 75 goes up dramatically. I do think there's a bit of a myth that people we want to move seniors out of their homes, and then they'll become available to like people like your son to become homeowners, seniors do. Most surveys show that seniors do want to stay in place. And in fact, your survey. I didn't present this data, but showed that the majority of folks do want to stay in their home as long as they can because they're very happy with where they're living. So that does give you even more, I guess, of an impetus to continue the rehabilitation work that you're doing and address the cooling and the and the grab bar, the accessibility needs and all that. Natalie, talk a little more about that. Yeah. Mayor Pro Tem, I just wanted to give. So I think we're in our second going into our third year of the Emergency Handyman program. So we specifically launched that program using general funds to be able to do emergency repairs for seniors so they can stay in place. So that handles heating and cooling during the changeovers. We've also used it some for accessibility and some other things that we determined to be life and safety hazards. It is currently slated to be funded in this year's budget through our general fund. And then real quickly, because I didn't get a chance, I just wanted my entire team is here, so I'm hoping they'll stand and just wave because they are the team that does the work day in and day out. And so they are managing the home rehab program, the emergency repair program, our

home Tbra program. Well, really all the programs they do, all the work. I stand up here and talk to you guys. So we do have a program specifically to address that outside of federal funds, because there's no federal funds can be incredibly challenging to deploy. So we do have some flexible funding that will let us address those. And if there's opportunities to partner with other nonprofits, we're always happy to incorporate that into our programing. We'd like to thank you. Well, thank you to you and your team as well for all the wonderful work that you do. And thank you, Heidi and Avila. Avila, oh, all right. It's all right. We'll stand for for the record, we'll we'll get your pronunciation correctly. Well, thank you very much. If no other. Oh, yes, Councilmember, I just wanted to point out Anthony did make a rundown here. So if he wanted to add to the conversation a little bit, I didn't want to. Mayor Pro Tem, maybe I can reiterate what I was going to ask. Hello. I just, you know, I think as we are talking about this and there's a lot of survey information in here as well, I, I just wonder, I'm curious how you're thinking, I know that you're spearheading that project. And so I'm just curious how you're approaching that and then making sure that, you know, we're working together with this plan and the plan that's upcoming. Yes, indeed. Anthony Turner public Health Coordinator, Mayor Pro Tem Council, the survey that you're mentioning is actually being developed right now in partnership with Nmsu. We're waiting on their proposal, and then we'll move forward with that. But at the moment, well, it's in the development phases. There's not too much to that. And just so I'm clear, Anthony, that will be specifically for unhoused folks. Or are you thinking of expanding that to all folks who are, for example,

you know, living in maybe on it'll be for surfing or, you know, living in their car or it'll be for all four categories of the HUD homelessness, also with substance abuse and mental health. So it covers a wide range. So there's going to be quite a bit of data in that that we have to cover. Okay. Thank you. Do you know if we will have access to the survey before it goes out. Like will we be able to provide feedback. Yes, we will be able to provide feedback. But right now I believe that Doctor Banner is going to be the principal investigator helping to develop it. Okay. Thank you. Of course. Thank you. Okay. Councilors. Thanks. Actually, another follow up on surveys. And this is for anybody who conducts surveys, maybe everybody. So there are some who are responding to this. There's 110, 120,000 people who live in the city. How do we go about doing surveys? Do we have thoughts or how we might improve numbers? This is Heidi Aguilar again, mayor pro tem and council members. In this kind of a survey, what we're looking at, we call this a snowball survey. So we get the word out about the survey. People hold tell each other it picks up like some energy, like a snowball rolling down a hill. I don't know if that's the right physics, but that's what we say. And and then the survey kind of the word of the survey broadens and people get excited to take it. This is the appropriate type of survey to do for a housing needs assessment of this size and magnitude, because what we're trying to get is capture. And you see we captured like those precariously housed in the very low income people very well. We want their voices captured in the survey in some cases when we're doing this right now for a community outside of Washington, D.C. we'll do a statistical survey, a significant survey. So we use a more precise sample to be able to invite people to take the survey. That type of survey on its own is is quite expensive

to conduct, just the sampling in particular. So what we hope to do with this survey, which we achieved, is to use the snowball type of approach and the sort of just informal promotion with the city as a partner and, and nonprofits as a partner, to get enough of a representation of the people who have housing needs, which we did. So it's not a matter of a of the numbers as the representation of that demographic sample with the statistically significant survey, like the magic number for those, just to give you some context, is about 400 responses. And for this one we got 742. So we feel really good about the numbers, but also the demographic representation okay. Yeah. Mayor Pro Tem Councilor Harris, I will add that for this particular survey, staff does make a concerted effort to outreach those least likely to participate. So we mailed about 10,000 postcards to low to moderate income census tracts. In addition to that, we partnered with the Peregrinos, who put survey fliers in all of the food pantry boxes. So that was about 6000 households. And then we partnered with the county on ads. So for those who see the Bulletin weekly, we advertised and they advertised, and then it was also on both Facebook posts. And then I actually did a. A news TV segment with, with our communications team that was advertised on the news. So we do try and go above and beyond the standard outreach process. Cool. Yeah. That's great. And I appreciate the focus on the people who need the housing because that's what we care about, like randomly sampling 20,000 people in the city is probably not. If you get more people who are already on their

own, who also have low needs. So yeah. Thank. Any questions. Okay. Thank you. Let's go to agenda item 9.2 Economic Outlook. Thank you Mayor Pro Tem and members of City Council. My name is Monica Torres economist with Economic Development. And I'm going to give you an economic summary from 2025. I'm going to go over things happening in the nation, the labor market in the city, your revenue, much taxable gross receipts, permits in the city, the cannabis market. Looking ahead, a section for other and questions in the nation. We have a number of things going on. Inflation, as measured by the consumer price index, remains elevated. The average the estimated average for 2025, was about 2.7%, the Federal Open Market Committee said, kept the federal funds rate at a target between 3.5 and 3.75. In their January meeting. The funds rate is benchmark for borrowing costs. It has a larger impact over the short term as compared to the long term. On the long term, we have other variables that play a role, such as expectations in their future meeting. Their next meeting is next week. If I'm not in March 18th. The future of the rate is data dependent, so it's a balance of between inflation risk and

employment stability. Just for reference, in 2021, the upper limit of the federal funds rate was 0.25%. Among other things, we have tariffs. Two weeks ago, the Supreme Court ruled all the tariffs enacted on the law were illegal. So that doesn't cover all the tariffs. But now there's uncertainty if there's going to be refunds or not. And if they're going to happen, how the process is going to be. And also new tariffs were enacted last week. In other things, there's changes to programs such as Snap, Medicaid. There's also going to be a number of tax incentives this year for both corporate and individual. Some are extensions of things that already were in place. Some are new implications of tax incentives. Well, some individuals might benefit, some money might go back into the economy, so might go to savings or to pay down debt, among other things. We have changes to student loan repayment on the global scale. The geopolitical conflict. And last, there's going to be a new share for the Federal Reserve this year. Now talking about the city, the labor market, we don't have data for October 25th because the lapse in government appropriations. But if we compare 2025 to 2024, excluding October, we see an increase in all categories. Labor force increased 1%, employment 1%. The number of people actively looking for a job 3%. In regards to the unemployment rate we have during 2020 and 2021, we saw one of the highest unemployment

rates in the city during the pandemic. Then 2022, 2023, we saw one of the lowest unemployment rates in recent years. There was also a number of fiscal and monetary stimulus in the nation. By 2024 and 2025, the unemployment rate increased to 4.3 and 4.4 approximately. Due to weakness in the labor market, the Federal Open Market Committee cut rates three times last year at 4.4. Still consider a low unemployment rate. Employment was strong in 2025. Now, if we talk about December, December is a very strong month in the city. If we compare December 25th, we see preliminary and subject to change to December 2024. We saw an increase in labor force employment in the number of people actively looking for a job as well. And the unemployment rate jumped from 3.9 to 4.2. Revenue. There was an increase of 9.6%, which is about 12.6 additional million total in about 143 factors that could have contributed. Well, we had a higher rate, which already we have higher. Rate, obviously, but we could also have seen some anticipatory response ahead of higher rates and also tariffs, which were announced on April 25th. For example, if you were going to buy furniture next year, maybe you went ahead and bought it just to prevent higher rates. We also have a strong employment. We have high prices due to inflation. And again, December is a strong month in the city. Does December 25th was the highest December. Today. It was not adjusted for inflation increased 6.6% to a

total of 13.9 million. Much taxable gross receipts are a measure of economic activity. The all industry sectors increased 4.4%, not not adjusted for inflation, to a total of 4.3 billion to 3. Main contributor sectors were retail trade, health care, social assistance and construction. Health care and construction increased 13 and 6%. We, while retail trade experienced a decline of 0.8 percent. Together, these sectors contribute about 57% to the total industries. Retail sector is an important sector is about 30%, healthcare about 16% and construction 11%. In regards to permits, new business registration increased 24% to a total of 649. New residential construction permits experienced a decline of 12% to a total of 571. Factors that could have an influence on this on business and investment decisions. Well, we have a strong employment. We have consumer expectations, interest rates. For example, the 30 year mortgage rates in 2021 was about 3%. In 2025, it's 6.6%. We have wages. The average of the average total private sector, weekly earnings, not adjusted for inflation, is above pre-pandemic levels. And. That's pretty much the main contributing factors. In regards to the cannabis market. We see a decline in all the categories. Total sales. Sales dropped 10% to a total of 33

million, medical use about 12% to a total of 1210 million adult use, which is about 70% of total sales, declined 9% to a total of 23 million. Transactions declined also 2% to a total 1.1 million, and the estimated transaction expenditure was, which was 30.4 is 8% lower as compared to 2020 for the excise tax, which increased from 12% to 13%. And is charged. Not all use declined the revenue 6.4% to the total 721,000. This was expected because we're seeing lower auto sales in regards to medical licenses in the county. On a year over year basis, we have a 4.3 decline, but if we compare to pre-pandemic levels, we're still above that. That level, about 14% on the licenses we were seeing increase on the number of enrolled patients and patients. And when the pandemic hit, we see statistically significantly increased. And then we see a decrease when adult use sales started, which could lead to. Could indicate that some of the demand will have not occurred if the pandemic had not happened to up to date, there's about 30 qualifying conditions. And looking ahead well, economic activity as measured by the all industry sector match taxable gross receipts continue to expand in 2025 as compared to 2024. The pace was lower as we experienced in 21 and 22, but those two years were above average growth. On the regards to the labor market employment rate initially or

higher employment was strong in 2025, we had an increase in business registration as compared to a previous year. On the other hand, we did see the decline in retail trade activity, but measured by max match taxable gross receipts in the last Cruces MSA, the average of the average weekly earnings private sector declined 2.7% and inflation remains elevated, which can have an impact in the labor market and in business investment. Just this is just a friendly reminder that every quarter we publish the economic outlook on the following link. If there's any data or an additional information that you would like to see there, please let us know. I forgot to mention that we keep track of prices with the Cost of Living index, and in 2025, the city was. The groceries in the city were 3.3 lowers compared to the average of the participating cities. We cannot compare the index one year to another because it's different cities that participate. That concludes my presentation. If you have any questions. Councilor. Thanks, mayor. And yeah, thanks for the presentation. Question on slide point. Actually, both questions are on slide eight. So I mean, we just talked about housing and building more units. So there was a so we we need more units. But our website, our residential construction permits are going down. Is that

like in in absolute number in terms of units. Or. I think I maybe I will defer to Chris. I guess the gist of my question is does an apartment complex count as one permit for the purposes of this or 400? Mayor Pro Tem Councilor Harris multifamily is considered commercial. So this would be. Yeah, yeah, okay. So then overall kind of is the feeling that the units are still we're still getting more units or units have kind of leveled off or. Mayor Pro Tem Councilor Harris. So given some of the changes in the land development code, we are seeing an uptick in multi-family duplexes, triplexes, Quadplexes. So we are seeing more of that. So I would expect to see some of that reflected in the numbers as January 1st was of this year was when we went exclusively to the new code. So I think over the next couple years we'll definitely see those units increase. All right. Great. And then the second question is on the new business registrations, is there a breakdown on kind of category? I don't expect you to rattle off every category you know by memory, but. Mayor Pro Tem Councilor Harris, our software doesn't really allow us to get that granular. But what I will say is some of that isn't just new registrations versus there's been more of an aggressive effort on the part of staff to go out and make sure that those who have had expired are now getting their registration, so we can work to try and break down those numbers a little bit more as we kind of figure out industry versus renewal versus new, so we can try and get that information to you. Okay. Well, that's something I'm interested

in. Like what what kinds of businesses are coming in. You know, the breakdown of renew versus new because there's something going on. Feels like a lot of businesses to have opened for. Not a lot of public facing. Just sitting around. And then also to kind of see it would be interesting to see maybe next quarter, like the churn, if we could get an idea of it because, you know, it's common to see like restaurants open in a place and then run for a year and then close and then another one open. So yeah, we'll just be, I think, an interesting data point to to see that churn. Mayor Pro Tem Councilor Harris Yeah, we can certainly look at some of that. A lot of these are home based businesses. So when you think businesses, you're always and I that was kind of my first thought too was we're seeing a lot of those, but a lot of it is home based. And again a lot of it is maybe there's been a lapse. And so when they come in and renew, so it's not necessarily a new it's more a new registration. So okay thanks. That's that's all I got. Council. I really just have more of a comment and appreciation of you. Doctor Torres, what a time to be alive and understand macroeconomics. Know? Yes, it's an exceptional moment. Anyway, I just appreciate you breaking it down as much as you can for us. And I know that macro, that economics is a science and I know that you know it. But also, thanks for the crystal ball insight that you're trying to throw here. So I appreciate you very much for giving us this context and, and for us to, to help us understand this volatile, wild place. So cheers.

Thank you. Always happy to see you. Likewise. Okay. Thank you. So I just general questions without the contract from four five what do you think it's going to again. First of all what do you think where we're heading increase decrease also same thing for interest rates. Where do you think those are. What. You know just just a guess. That's a very difficult question to ask right now. Especially with the things happening. Like right now we have geopolitical conflict. We have a major trading route that just closed. That led to a 39% increase in oil prices. This could have some inflationary effect depending on how long it takes. But we're also seeing some softening of the labor market. So it's a very. And also indicators are not typically behaving like they used to PC, which is a preferred measure for inflation for the Federal Reserve, has been running about 2% target for five years now. We're seeing PCI a little lower than PCE when it's typically the low. The opposite case, I think most likely the interest rate is going to kept at the current level for the next meeting. Maybe a a cut by the end of the year. But there's a lot of changes. Since the pandemic,

nothing has been it's been very difficult to forecast things because we've seen an unprecedented amount of stimulus. Now it's going away, but now we have other things changing. And so I probably didn't answer your question. It's just very complicated. If there's a more weakening of the labor market, probably there's additional Cat in the horizon. But I think they're going to stay for the next meeting. Gotcha. Thank you, thank you. Graduated in economics out of I think it was 12, 1600 graduates. He was the only economics major. So conversations around the kitchen table around industrial economics and macro tables, all that was always interesting. It's interesting to me. And he loves he loves that stuff. Thank you so, so much for your presentation. And thank you, Elizabeth as well for coordinating. Appreciate you. Other questions or comments. Councilor. Thanks. So that the other question I have, which also is probably a crystal ball question, how how sticky do you think some of the inflation and price increases and housing price increases might be in the context of this, as I just wrote, to be fair, the executive summary of a study in Europe, they had actually a situation where they had added a tax to a service and then a few years later removed the tax. And so the study was actually looking at the price increases and how sticky they were after the tax was removed. And basically it was prices went up immediately after, you know, the tax effect. And in this

case, this would be another housing price increase. Because it was taken out. Consumers did not see the benefit but the reduction. So. Tax rates for haircuts or so prices after the tax prices went down by providers. So anyway, just kind of curious your thoughts on that. I know that like the components, I see a separate line item for the tariff on there and I that I have to pay. And so that's that would be pretty hard for the end of the quarter. But if butter that's not there, maybe it still cost an extra dollar next year. So thoughts okay. Could you repeat your question please. Yes. With some of the changes that you were bringing up, you know, we're seeing some struck down which obviously impact us. We're seeing a lot of housing prices rise for various reasons. We're trying to increase supply and other policies. How? How sticky. Do you think those changes are like, do you think there's actually a chance in the short to medium term of actually seeing price decreases due to these things? That's kind of a consumer question. Again, a hard question. We see inflation trending down, but the level of prices still elevated. There might be some changes in regulation at the federal level that might help with with home prices, but still is nothing like finalized. I don't think I have the information to fully answer

your question without making a number of assumptions, and I would rather give you a more informed answer that works for you. Yeah, of course, that was a that's a very complicated question. So thank you, Doctor Torres. You could literally tell us anything and we would be like, oh yes. And that would be it. You could, you know, we would believe you and you're legit. So you certainly know more than we do. So just for the record, whatever you say. We're here to hear it. Oh thank you. That's the power of accomplished. All right. Any other comments or questions? Thank you very much. Thank you. Thank you. And then are there any other comments or questions. If not if there are no objections I will adjourn. Second okay. Move to adjourn. Second Christine, this is on the motion to adjourn the work session. Councilor McClure. Yes, councilor Matisse's absent councilor. Harris. Yes. Councilor. Bencomo. Yes. Councilor. Koran. Yes. Mayor pro tem? Yes. And mayor's absence. We are adjourned. Thanks, everyone.