A Path Forward for Affordable Housing in Los Alamos

Published on August 22, 2024

As a community development professional living and working in Los Alamos, I recognize the urgent need for affordable housing in our community. This belief is reinforced by the conversations I’ve had with our local community in addition to those who work and visit and would like to become part of what makes Los Alamos special.

Why Affordable Housing is Important to Communities

Affordable housing is crucial for the economic vitality of communities and is notably scarce in Los Alamos County. Increasing the supply of affordable homes in Los Alamos will attract and help retain employees who comprise the local workforce for restaurants, stores, hotels, hospitals, schools, and our local government. In addition, shorter commutes mean that these employees can spend more time with their families and less time on the road. The community benefits of additional moderate density and infill housing are myriad, including reduction of traffic congestion, improved air and environmental quality.  Expenditures on roads and infrastructure in support of new housing also provide the stimulus to repair and replace aging infrastructure and bring new amenities to the community. These new residents in turn support the overall higher quality of life and a more robust economy for local businesses.

To retain employees at small businesses, retail and service industries, and other lower-income jobs, Los Alamos must have a far greater quantity of quality housing both affordable and available to low-income households. Similarly, for Los Alamos to hire and retain educators, trade workers, health and legal practitioners, public safety workers, and small business owners, quality housing affordable to moderate-income households must be accessible in greater capacities than currently present.

Plus, people who work in the community and live here have a vested interest in maintaining the quality of life, spending locally, and participating in the economy – they buy their groceries here, raise their kids here, attend our schools, dine here, patronize our local shops and contribute to the local economy.

Affordable Housing Conundrum

I am often asked why affordable housing has been so elusive in Los Alamos County. The short answer is there hasn’t been sufficient supply to meet the demand and there are not many locations where additional housing can be developed. The supply of new housing has been further strained over the past few years by lack of capital, a shortage of labor and materials coupled to the surge of Los Alamos National Laboratory (LANL) hiring. Recently built and approved units have not been able to keep up with demand. In addition to employees of our local businesses and institutions, many of these new hires would love to live in Los Alamos County but instead are forced to find housing off the hill. While housing in Los Alamos has always been more expensive than homes in our neighboring communities, the increased demand will continue to put upward pressure on housing prices for the foreseeable future unless additional supply is added to the market.

Market prices have exceeded the expected affordable purchase price for many households and are on track to exceed affordability for households making up to 120-percent of the Aera Median Income. Similarly, rental affordability remains out of reach for many, with substantial gaps between market rents and what low to moderate-income households can afford. Given the lack of available supply, there is a justified rational to support the development and rehabilitation of affordable housing units.

What to do about it?

In 2007, the New Mexico Legislature strengthened the Affordable Housing Act, empowering local governments to support affordable housing projects directly. This act enables municipalities to donate or pay for land, finance building improvements, support essential infrastructure, and cover a wide range of project costs in support of affordable housing. However, to leverage these tools, an Affordable Housing Plan and Ordinance in compliance with the State Affordable Housing Act (Act) must be adopted by local governing bodies. The plan and ordinance are pivotal for unlocking state and federal programmatic, policy, and development funding that flow through the New Mexico Mortgage Finance Authority (MFA).

To do this, the Housing Division is finalizing an update to both the County’s Affordable Housing Plan and ordinance as required by the Act and approved by MFA. This Plan provides the necessary data to justify public assistance and donations targeting households burdened by housing costs and earning up to 120% of the Area Median Income (AMI). The MFA has reviewed and approved both the plan and ordinance allowing the County to move forward and deliver affordable housing projects to the community, upon adoption by the County Council. The County Council will open a public hearing on August 27 with final consideration on September 10, 2024.  The proposed Affordable Housing Plan can be found at lacnm.com/ProposedAHP2024.

Addressing the Housing Shortage and Increasing Supply

Supply is critical to market health and essential to affordability. In an ideal housing market with a healthy equilibrium, the private market would provide housing units at various price points and with a healthy supply of available unit types (apartments, duplexes, townhomes, single-family, etc.) for rent or purchase. It will be difficult for Los Alamos to achieve enough supply to have a healthy housing market due to our limited supply of land without modestly increasing density in targeted areas. It is important to limit the supply-demand discrepancy so we can better achieve housing affordability, inclusion of low- and moderate-income households, sustain economic vibrancy, and reduce the long-term reliance on public subsidies.

Increasing the availability of all housing types is critical to market health and functionality, reduces demand-initiated price inflation, and makes it easier to achieve naturally occurring, market-provided affordable housing. A secondary benefit of this growth is that additional residents contribute and support the local businesses. To begin addressing housing needs in Los Alamos, it is projected that approximately 1,300-2,400 units will need to be constructed over the next five years.

The addition of 1,300 units would maintain the status quo by satisfying baseline levels of growth. This is considered the minimum number of units necessary to begin decreasing demand-initiated market pressure and improve the overall health of the housing market.

The addition of 2,400 units would be expected to satisfy the demand for housing and create conditions more conducive to affordability, small business expansion and retention, and economic diversification. This level of growth is expected to increase the overall availability of housing, decrease demand-initiated price inflation, and decrease the long-term reliance on public subsidies.

New units in excess of 2,400 are expected to result in significant gains to housing affordability, economic growth, and community sustainability.

A healthy mix of housing types and price points, including affordable, market-rate, and even luxury rental and for-sale units ensures opportunities for all individuals– including our elder population – to improve their living and economic situation and contribute to a healthy and diverse community.

Setting Quantifiable Goals

Currently, recent building permit trends in Los Alamos County averages 62 new housing permits per year. The plan sets clear production goals to increase permitting to at least 150 new units per year, with a target of 250 units annually, and designating at least 10-percent of the new units as affordable. Additionally, we aim to grow and expand our home renewal and homebuyer assistance grants annually. This won’t get us there, but it’s a good start.

A Phased Strategy

The proposed housing plan outlines a phased implementation over five years, contingent on County Council approval, available funding, and necessary resources. Collaboration with various partners will be essential in addition to leveraging tools such as public-private partnership, tax credits, state and federal grants and funding, and strategic use of publicly held land.

Inspiration and Insight

Case studies in the plan offer valuable insights and models used in other communities to increase housing supply. Successful projects have clearly defined roles between public and private partners, utilized tax credits, grants, and federal funding effectively, and delivered sites utilizing innovative development structures including long-term leases of public land. These examples are crucial to determining what projects might benefit our community in Los Alamos County.

Building a Future Together

The County’s commitment to addressing the housing needs in Los Alamos is unwavering. Los Alamos can and should work to increase housing supply, support expectations that those wishing to live here can, and highlight the economic advantages of increasing the supply of diverse, higher density, affordable and market-rate housing types.

By adopting and implementing the proposed housing plan and ordinance, we can create a healthy and thriving community. The path forward requires a concerted effort from all parties, but with determination and strategic planning, we can ensure that Los Alamos remains a vibrant place for all its current and future residents.

Together, let's build a future where everyone in Los Alamos has a place to call home.

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Dan Osborn Is a Community Development Professional with over 25-years’ experience working in the inter-mountain West. Dan holds a master’s degree in applied science from the University of Denver where he focused on environmental policy and the science of climate change. In the last decade, he has worked in Salida, CO, as Community Development Director and Summit County, CO, as the Housing Program Manager. When not shaping communities through his work, Dan enjoys travel and an active lifestyle, primarily running and biking long and slow with his wife, their dog, and a close-knit group of friends and family.

He is passionate about reframing community development, housing, and land use policy for the changing West.