New Mexico’s capital of Santa Fe has become the first US city that will directly connect wages to housing affordability, with the goal of linking minimum wage increases to both fair rental market prices and consumer prices.
The Associated Press reports Santa Fe’s minimum wage will rise to $17.50 in 2027. The annual increase is tied to consumer prices, but under a new ordinance that will be updated in 2027 with the Consumer Price Index making up one half of the equation and fair market rent data making up the other. A 5% cap will be in place if costs skyrocket. However, if consumer prices or rents decline, the minimum wage will not be reduced.
Roughly 9,000 workers, or 20% of the city’s workforce, will see a wage increase when this new ordinance goes into effect. Santa Fe is using a “mansion tax” aimed at home sales over $1 million to finance a trust fund for affordable housing projects.
“The purpose is to make a serious difference in assuring that people who work here can live here,” said Mayor Alan Webber.
