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Santa Fe is New Mexico's most expensive city, especially for housing but it will soon be the first in the nation to link the minimum wage to consumer prices as well as fair market rental prices.

A new ordinance to take effect in 2027 will increase the city’s minimum wage from $15 an hour to $17.50 and tie future increases to rental costs.

Reilly White, associate dean of teaching and learning in the Anderson School of Management at the University of New Mexico, is among those who worked on the proposal. He said a blended formula will now be used to calculate the annual wage increase, with the Consumer Price Index making up one half and fair market rent data making up the other.

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"We know that it's an expensive city but it's an expensive city around one particular dimension, and that's real estate," White pointed out. "Grocery costs, other living costs, utility costs, actually are favorable in Santa Fe compared to other places."

In recent years, many cities and counties have raised their minimum wage higher than the state wage. For example, Washington's state minimum wage is about $17 per hour, but it's $21 in the city of Tukwila – the nation's highest – with multiple Washington cities close behind. The federal minimum wage is still $7.25 per hour.

White argued it is critical to incentivize both business owners and individuals to get behind housing reform and increase the city's supply but he stressed trying a new approach to address the minimum wage is a good start in terms of balancing both positive and negative outcomes.

"There's a compelling case that said, 'Why don't we make it higher?' And then there are other people who are like, 'The minimum wage is already too high, we should lower it'" White observed "In threading the needle a bit, the goal was to find a 'Goldilocks' scenario that created the least disruption for local businesses but also simultaneously created the biggest impact for low-income individuals."

In signing the minimum wage ordinance, outgoing Mayor Alan Webber noted Santa Fe's history, culture and diversity and called it an important tool for addressing an affordability crisis that threatens the city's fabric.

According to the National Low Income Housing Coalition, the lowest income renters are disproportionately Black, Native American and Latino.