New Mexico, and its largest city, have an advantage that many states and metro regions lack: low costs. From energy to food to shelter, the cost of living compares quite favorably to the Pacific Coast and Northeast — which is why so many retirees head our way.
But as scholar Wendell Cox, an invaluable resource for clear-minded analysis of demographic data, points out, housing affordability is deeply impacted by one’s income. A house that is “cheap,” when compared to domiciles in expensive locales, may not be so affordable if homeowners’ incomes don’t keep up.
Every year, Cox issues an “International Housing Affordability Survey,” which examines “293 metropolitan housing markets (metropolitan areas) in nine countries (Australia, Canada, China, Ireland, Japan, New Zealand, Singapore, the United Kingdom and the United States.” The project’s key metric is the “median multiple,” which gauges affordability by the “price to income ratio … calculated by dividing the median house price by the median household income.”
The good — and hardly surprising — news is that the Duke City is nowhere near the neighborhood of affordability nightmares, a region that includes Honolulu (median multiple of 9.2), San Jose (10.3), and worst-of-all Hong Kong (19.4).
But compared to the communities Cox analyzed that are located in New Mexico border states, Albuquerque scored … not so great. Of the 26 metro regions in the American Southwest, the Duke City ranked in the bottom half of median multiples. Oklahoma City, El Paso, Houston, and Dallas-Fort Worth are each more affordable. Scan the chart below for details.
The takeaway? Yes, homes are “cheap” in Albuquerque, but given the low wages in New Mexico’s largest city, not as affordable as they might appear. Real economic-development strategies are needed to boost the metro area’s pay. Also, the burden of land-use regulation needs more attention. The Integrated Development Ordinance is a step in the right direction. As the Albuquerque Journal noted, the revamp intends to cut “the city’s roughly 1,200 zones to 20.” But that’s not enough. In a study issued last year, the Rio Grande Foundation noted that the IDO is “443 pages, and covers a staggeringly massive list of matters, regulating everything from motorcycle parking to landscaping, ‘pedestrian circulation’ to the height of lighting, signage to fence and wall standards.”