Failed Housing Developments of New Mexico

Although growth rates for Albuquerque and New Mexico as a whole have been generally disappointing for years, the real estate development industry seems to possess an unfailing optimism for home sales that manifests throughout the Albuquerque Metro Area. The approval by Bernalillo County of the enormous, near 14,000 acre, Santolina community on the West Mesa has produced no small amount of controversy due to its overall size, questions about the impact of large new developments on freshwater supply, and concerns over increasing traffic on the few major routes from the West Mesa into central Albuquerque. Yet Santolina is far from alone. It sits just south of I-40 on the outer West Mesa, just north of I-40 in the same area is the proposed Estrella community, a project of around the same scale.

Both of these developments lie on land currently owned by Western Albuquerque Land Holding, a company stood up by bank Barclay's to handle land it came to own after the previous developer, SunCal, defaulted on a $212 million loan. This somewhat questionable history of ownership speaks to the deeper questions surrounding ambitious commercial urban development: if you set out to build almost an entire city at once, will almost an entire city worth of people even want to live there? This is a tough call today in New Mexico, where growth projections are optimistic but the recent Mesa del Sol planned community sits mostly empty, dominated by the prefab metal warehouses of Albuquerque Studios and anchored around an impressive office building that no one seems to want.

Perhaps Albuquerque will be the center of the upcoming Southwestern migration, with today's master plans turning into thousands of acres of near identical, vaguely Spanish-styled homes. If the land rush does not materialize, though, it will be nothing new around here. Before the ill-fated SunCal, there was Horizon Land, and before Mesa del Sol, there was Rio Rancho. Real estate futures looked bright in the 1960s, too - and these two skeletons of that era have a great deal in common.

Some might bristle at my labeling Rio Rancho a failed housing development. In fact, about 90,000 live in Rio Rancho, and in many ways it forms the remainder of the “Albuquerque metro area” after Albuquerque itself. Rio Rancho today, though, is a mere shadow of what it was once supposed to be, and you can see this from just about any high vantage point in the area.

Rio Rancho consists of about 90,000 acres of land purchased by real estate developer AMREP in in the '60s. The land was subdivided into suburban lots of one to two acres, tastefully arranged to help houses seem more isolated than they really were and to provide ready access to shopping and recreation, and sales of lots commenced via magazine advertising and other methods of selling at a distance. An important thread in these suspect '60s land developments, you will find, is that the buyers are seldom anywhere near the land they are buying. We'll get back to this later, though. First, lets look at these thousands of lovely desert homesites.

The original AMREP development, called Rio Rancho Estates, stretches from the northwest end of Albuquerque to the beginnings of the mountains to the west and trails off mid-hills in the north near the Santa Ana pueblo limits. What we think of as Rio Rancho today, the incorporated City of Rio Rancho, consists of the southeastern corner of this area plus land outside of the original development which has been annexed over the years since. Rio Rancho city limits are just over half of the original Rio Rancho Estates and much of the City of Rio Rancho remains undeveloped. The remainder of the original Rio Rancho Estates, though, measuring about 60 square miles, are unincorporated and sparsely populated, essentially undeveloped.

This area might be largely unnoticed, being just empty desert, were it not for the detail that the land developer had to establish a road network in the area in order to subdivide and begin selling land (this is a legal requirement in New Mexico to encourage to real estate developers to actually, well, develop). Although in the decades since this road network has largely faded back into the sand, from an overhead view the scars on the land are extremely visible, and more than just a bit surreal. I have previously written about California City, but this is the California City of New Mexico.

Rio Rancho's history as a failed mass enterprise is made most awkwardly apparent by “Rio Rancho City Center,” the collection of administrative buildings including the city hall which were placed at a point roughly central to the Rio Ranch Estates - but not at all central to the City of Rio Rancho today. In fact, the city center is awkwardly off the northern end of the city, surrounded by empty land and a few straggling developments.

From a few places in Albuquerque, such as at the very western limits of Paseo del Norte, you can look across at Rio Rancho and see the faint outlines of the original streets in neat rows as they crest the hill. Three years ago Bernalillo County approved a new Rio Rancho Estates Master Plan to attempt to develop this area, but the Development Plan itself awkwardly admits that the State Engineer has estimated the water needed to serve this community at more than twice what is available in the aquifer, effectively halting any large-scale construction.

The Rio Rancho Estates benefitted from their close proximity to Albuquerque which made some development in this area inevitable, even if it occurred significantly later and in much smaller quantities than the developers had intended. A similar project, the even similarly named Rio Communities, has had no such fortune.

The Rio Communities consist of approximately 200,000 acres of land south of Albuquerque and roughly east of Los Lunas and Belen, purchased by the Horizon Land Corporation in the 1960s and established as several large master-planned communities full of lots ranging from one to ten acres and sold via print advertising and direct sales. We are fortunate that Google's archives of LIFE magazine have captured an original advertisement for the area, showing the grand promises made about the quality of life and amenities in the area.

New Mexicans will scoff at this. They know what's East of the Rio Grande in this part of the state: miles upon miles of nothing. The Rio Communities are “near Belen” in the same way that Belen is “near Albuquerque”, which is to say, “sure, in the scale of 40 miles of empty land”. Limited major highways in the area, difficulties laying new bridges and roads, and the general remoteness of the area made much of the Rio Communities difficult and time consuming to reach from any nearby major areas (including the freeway today), and so development has never really happened at all.

Today, the former Rio Communities include several small incorporated towns (including the towns of Rio Communities and Rio Communities North), all combined under the Valley Improvement Association (VIA) to attempt to recover the wasteland left by Horizon Land after selling thousands of lots on the promise of urban infrastructure and then quite simply not building the infrastructure. These are small towns, though, and not particularly well-off ones at that. The suburban streets of the Rio Communities are some of the most desolate I have ever seen, now mostly almost impossible to identify from ground level but still apparent from above.

One of the curious common factors between these developments and other failed real estate developments in New Mexico, Arizona, and Texas is the location of the buyers: nowhere near the land being sold and, primarily, in the northeast. In particular, New Yorkers were a major target of advertising for large Southwestern developments. While many were flown out to see the land before buying, many others bought sight unseen. When you consider that the visitors were handled by staff of the developer for their carefully planned tour, all of them bought the land without any close familiarity with what they were buying.

Opinions differ as to whether or not AMREP and Horizon were perpetrating an outright scam. AMREP seems to have actually intended on building a large community, but Horizon in particular owned similar operations throughout the desert southwest and it is impossible not to critically note their habit of advertising remote land with no infrastructure as being in a desirable area near many attractions. In 2005, the New York Times carried an almost heartbreaking editorial titled High Hopes and Worthless Land by an individual who inherited one of these plots, and a tremendous number of “owners” in Rio Rancho and the Rio Communities today find themselves in the same position: Their parents or grandparents bought an acre somewhere in the desert, and simply by inaction, they still own it today.

In fact, this has posed a challenge in the Rio Communities in particular where attempts at planning redevelopment have been tremendously slowed by the number of separate and completely absent land-owners. In the mean time, those land owners who do remember their sunny property are often trying to sell and finding that to be very difficult. Real estate websites are full of listings for empty lots in Rio Ranch and the Rio Communities, often selling for as little as a few hundred dollars, and even so the seller may be happy to be rid of the hassle of sending their annual tax bill of just a few dollars to the county. What else do you do when you own a great quantity of nothing?

Today there are still lawsuits ongoing against AMREP and Horizon, both of which have essentially disappeared. In the meantime, just south of abandoned the Rio Rancho Estates, work will soon begin on Santolina. I have not yet heard any reports of Santolina advertising in New York magazines, but if you are offered a few acres of pristine desert, in the healthful outdoors and near skiing, perhaps pause a moment before dropping the down payment on a family heirloom that your great-grandchildren will struggle to sell.