The Urgency of the Crisis

Albuquerque, like many American cities, is facing a housing crisis—one deeply tied to the way we’ve built and financed our communities for decades. With rising homelessness, a shortage of 55,000 housing units, and an aging infrastructure burdened by deferred maintenance, the city is at a crossroads. At the heart of these challenges lies a pattern of development that Strong Towns calls the “Growth Ponzi Scheme.”

This term describes a cycle in which cities fund their expansion with short-term revenue from new development, while long-term liabilities—like infrastructure upkeep—gradually outpace income. The result? Cities become financially strained, older neighborhoods decline, and new developments sprawl ever outward, exacerbating the crisis.

But how did we get here, and what can be done? Let’s break it down.

From Mixed-Use to Sprawl: A Shift in Development Patterns

Before World War II, cities developed organically, with compact, walkable neighborhoods that evolved over time. But in the post-war era, suburban expansion became the dominant development model.

In Albuquerque, the Northeast Heights mirrored the sprawling, car-dependent developments seen nationwide, such as Levittown—one of the first mass-produced suburbs in the U.S. These new neighborhoods offered affordable single-family homes, but at the cost of exclusionary zoning, car dependency, and an infrastructure model that required constant outward growth.

At first, this seemed like a great deal for cities: new roads, water lines, and services were paid for by developers and homebuyers. But these initial investments only covered the first wave of costs, not the long-term maintenance required decades later.

The Expansion Spiral: More Sprawl to Pay for Old Sprawl

As older suburban neighborhoods aged, the revenues they generated were not enough to maintain their roads, sewers, and utilities. But instead of reinvesting in these areas, cities sought new developments to generate short-term revenue.

In Albuquerque, this has meant expansion into areas like Ventana Ranch, the Southwest Mesa, and Rio Rancho, where new developments bring fresh tax dollars—but also new infrastructure liabilities that will one day become a financial burden.

This cycle of expansion continues until cities find themselves “stretched thin,” unable to maintain all the roads and services they’ve built over decades.

The Cost of Sprawl: Hidden Liabilities and Debt

The financial strain of this growth pattern is now becoming clear. Albuquerque is facing a road maintenance deficit of over $112 million per year. With over 4,600 lane-miles to maintain, and city budgets stretched to cover existing obligations, the cracks are literally showing in our streets.

Other hidden costs include:

• Aging Infrastructure – Roads, sewers, and utilities from the 1950s-60s in areas like the Northeast Heights are deteriorating.

• Revenue Gaps – New developments generate initial revenue but don’t cover long-term maintenance.

• Mounting Debt – Cities take on more obligations than they can afford, leaving older areas neglected.

This financial pressure directly contributes to the housing crisis, as resources that could be used to build new homes and revitalize old neighborhoods are instead funneled into maintaining unsustainable sprawl.

Breaking the Cycle: The Case for Smarter Growth in Albuquerque

Albuquerque is not alone in struggling with the long-term consequences of the Growth Ponzi Scheme. But understanding the root of the problem is the first step toward creating a financially sustainable, livable city.

How Zoning Contributes to the Housing Crisis

At the heart of Albuquerque’s growth challenges is single-family zoning, which restricts housing options and drives up costs. Because this zoning system prioritizes large, standalone homes, it:

• Limits housing diversity by making it difficult to build smaller, incremental housing.

• Reduces adaptability, preventing homeowners from converting their property into a duplex or adding casitas.

• Bans affordable “missing middle” housing (duplexes, triplexes, small apartment buildings) in most neighborhoods.

• Contributes to housing scarcity, which drives up prices citywide.

When neighborhoods cannot evolve incrementally, housing stagnates, disinvestment sets in, and residents face increasing financial strain.

The Hidden Costs of the Growth Ponzi Scheme: Why We Don’t Invest in Our Own Neighborhoods

One of the most damaging aspects of the Growth Ponzi Scheme is how it discourages reinvestment in older neighborhoods. Because most suburban tract homes were built all at once, entire neighborhoods tend to decline at the same time. Roofs, roads, sewer lines, and driveways all start to fail within a few decades of each other.

At this point, homeowners face a decision: invest in major repairs—or just move further out to a new development.

Since most suburban neighborhoods were never designed to incrementally evolve, making substantial improvements—like adding a casita for rental income, a home office, or even a backyard sauna—feels like a risk. Why invest in a neighborhood that isn’t built to last when newer, cheaper homes are available elsewhere?

This mindset leads to:

• Disinvestment – When individual property owners don’t see a future for reinvesting in their neighborhood, they don’t.

• Outward migration – The easiest option for homeowners is to sell and move to newer developments, keeping the cycle of sprawl going.

• Stagnation – Since zoning laws prevent neighborhoods from evolving naturally, homes and infrastructure age without renewal.

The Walkability Gap: Why Pre-War Neighborhoods Become Priceless—and Prone to Gentrification

Meanwhile, the few remaining neighborhoods that were built before World War II—walkable, mixed-use, adaptable areas like Downtown and Nob Hill—are becoming rare, high-demand assets.

Because these neighborhoods allow for incremental reinvestment (duplexes, mixed-use buildings, small apartments), they have retained long-term economic value far better than sprawling post-war suburbs.

But because walkable, adaptable neighborhoods are so rare, they also risk becoming exclusive enclaves, driving up prices and displacing long-term residents. Instead of being the norm, human-scaled development is now the exception, creating a false scarcity that worsens housing affordability.

How Zoning Reform Restores a Natural Cycle of Reinvestment

The solution isn’t to stop reinvestment—it’s to allow all neighborhoods to evolve. Zoning reform can help neighborhoods remain financially strong and adaptable by:

✅ Legalizing small-scale, incremental growth. A backyard casita can become a rental, a triplex can house families, and a single-family home can shift between those uses over time.

✅ Encouraging homeowners to invest in their properties. When residents aren’t restricted by zoning, they’re more likely to improve and modernize their homes—whether that’s a home office, a rental unit, or an added storefront.

✅ Breaking the cycle of outward migration. When people can age in place, generate income, or downsize within their own neighborhood, they don’t feel the pressure to move further out every 20-30 years.

✅ Preventing destructive cycles of boom and bust. Instead of entire subdivisions aging at the same rate and collapsing all at once, incremental reinvestment spreads out maintenance costs over time, keeping neighborhoods financially resilient.

A City That Evolves Over Generations

Albuquerque doesn’t have to follow the same trajectory of endless sprawl, financial insolvency, and stagnating neighborhoods. The key is allowing every neighborhood to naturally adapt to the needs of its residents over time—just like the great historic cities we admire.

By shifting from large-scale, speculative development to small, steady reinvestment, Albuquerque can:

• Make better use of existing infrastructure.

• Create more affordable, adaptable housing.

• Strengthen its long-term financial resilience.

The Growth Ponzi Scheme traps cities in a cycle of boom and bust, but real financial strength comes from small, local investments made by the people who live there.

If Albuquerque embraces zoning reform, mixed-use development, and infill strategies, we can escape the cycle and create a city that remains strong for generations to come.

A Path Forward: Reforming Zoning and Investing in Existing Neighborhoods

Instead of continuing to sprawl outward, Albuquerque has an opportunity to redirect growth inward—focusing on existing neighborhoods rather than expanding liabilities.

1. Embracing Incremental, By-Right Density

Allowing gradual increases in density—such as permitting duplexes, triplexes, and accessory dwelling units (ADUs)—creates flexible housing options without displacing residents.

2. Strengthening Albuquerque’s Tax Base

Dense, walkable neighborhoods like Downtown, UNM/Nob Hill, and Uptown already generate the highest tax revenue per acre, sustaining city services more efficiently than sprawling subdivisions. Expanding this model across more neighborhoods would increase city revenue while reducing the cost of infrastructure upkeep.

3. Prioritizing Public Investment in Core Areas

Instead of spending on new roads and sewers for fringe developments, the city should retrofit older neighborhoods, investing in sidewalks, transit, and public spaces to make them more livable.

What Burqueños Can Do

Solving Albuquerque’s housing crisis isn’t just a policy issue—it’s a community effort. Residents can take action by:
✅ Demanding investment in existing neighborhoods.
✅ Supporting zoning reforms that legalize incremental, by-right density.
✅ Speaking at public meetings to advocate for smarter growth.
✅ Joining organizations like Strong Towns ABQ to amplify local voices.

Albuquerque has a choice: continue down an unsustainable path, or embrace a more resilient, adaptable, and financially strong future. By shifting away from the Growth Ponzi Scheme and investing in sustainable, human-scale development, we can ensure that our city remains affordable, vibrant, and prosperous for generations to come.