‘It’s Housing Driven’: LANL, Hiring And Local Housing

BY STEPHANIE NAKHLEH
For the Los Alamos Reporter

In the last election cycle, one issue that dominated local news and social-media discussion was housing: the lack of it, the need for it, and where (if anywhere) it should go. A lot of conflicting assertions were made. I wondered, where can people go to find out the facts?

This is the first of a planned series on development issues in Los Alamos. I’m specifically focused on housing for now, though in the future I may explore issues around other types of development. While I am a Planning and Zoning Commissioner, which is how I got interested in this topic, for this series I am firmly wearing my journalism hat. I speak only for myself, not on behalf of any organization or group.  The purpose of this series is to establish a shared set of facts around housing supply and demand in Los Alamos County, and to seek the perspectives of a wide number of players in the issue, such as real-estate agents, major employers, developers, small-business owners facing staffing issues, homeowners, and renters. The largest employer with the greatest impact on housing demand is Los Alamos National Laboratory, so that’s where we start.

Half a million for a house

LANL is growing, and its employees are struggling to find a place to live. In the last several years, the Lab has gone from employing 12,000 people to 15,000 people, confirmed LANL spokeswoman Kathy Keith. “That 15k number is the highest we’ve ever been,” she said. “And we expect to hire thousands more employees. In the last fiscal year, FY2022, we hired a little over 2000 employees.”

With these hires comes increasing demand for housing, but the supply remains very low, and the Los Alamos housing market remains very tight.

“People are going where they can find housing when they get jobs at the Lab,” said Keith, adding that currently, 60 percent of the LANL workforce commutes, and 40 percent—or about 6,000 employees—lives in the county. That split can change depending on housing availability. Asked where the new hires will likely live, Keith said, “The answer to that question is most likely housing-driven.”

To get a sense of how tight the market is, I turned to Chris Ortega, qualifying broker for RE/MAX First. As of December 2022, there are only 13 homes on the market in Los Alamos, he said, adding that of those 13, only two are under $300,000. The average time on the market is only 17 days, so the few homes on the market get snapped up quickly.

“The total number of homes sold over the last few years has remained relatively consistent,” he said, at about 350 homes per year. “However, the average sales prices have increased significantly.” According to figures provided by Ortega, in 2017 the average sales price for a home in Los Alamos was $298,892. By 2020 it had risen to $414,401. By this year, 2022, the average sales price for a home in Los Alamos has climbed to $501,999. That’s half a million dollars for an “average” house—a 68 percent price increase in only a few years.

Retirees stay in Los Alamos

In many communities, there’s some housing turnover when people retire and leave the community. And people do retire: While LANL has done a lot of hiring, it’s also lost a lot of employees, mostly due to retirement, Keith said. In FY2022, “We lost a thousand to attrition, which is from retirement and other factors. Regarding attrition: we don’t want to lose people, we want people to stay, but we also know that a good portion of our workforce is hitting retirement age. And we’ve seen that people who are eligible for retirement over Covid be more likely to retire than in the past.”

What is different about Los Alamos, however, is that retirees typically remain in town, which means less housing turnover. People move into the town and buy houses, but people don’t leave the town and free up houses. The demand increases, but the supply remains flat. 

“When I first arrived in Los Alamos in 1998, Lab employees almost always left town when they retired,” said Ryan Maupin, associate broker with RE/MAX First. “Over the last 25 years, however, there’s been a big shift. Now, retirees tend to stay in town and enjoy all the wonderful aspects of life in Los Alamos and Northern New Mexico that they were too busy to fully experience while working. Los Alamos continues to rank highly among all towns in the country for quality of life, and retirees have even more time to enjoy it.”

Retirement is one reason for attrition, but not the only one. According to Keith, two big factors behind employees leaving, and potential hires turning down jobs altogether, are childcare and housing. LANL doesn’t keep statistics on how many people leave the Lab or turn down jobs due to housing shortages, “But we hear anecdotally from managers that they lose employees because they can’t find housing,” said Keith.

“People don’t understand how tough it is”

LANL director Thom Mason, during a public Q&A with the Los Alamos League of Women Voters on November 17, addressed the issue as well. “We do exit interviews when people leave, so we know the number one issue is salary,” he said. “But housing is listed in the exit interviews as the number two factor in terms of our challenge. We hired people with great credentials and lots of enthusiasm and exceeded our target for hiring, so our challenge is more on retention than hiring. It may be that people don’t understand how tough it is to find housing until they get here. Then, if you wind up  in Rio Rancho, that may seem OK for a while but after three or four years that starts to be a long commute. So I think the dynamic around housing is that people come here, and then they have a hard time finding something that fits their needs within a reasonable distance.”

Even with a high attrition rate, LANL is still gaining employees overall, and likely will continue to do so, Keith said. “It’s hard for us to project, moving forward, it’s based on budgets. But in the next year we know we’ll be hiring.” Hiring, she added, is expected to continue to outpace attrition. 

Mason, speaking at the LWV November meeting, agreed. “We expect that growth rate to continue for another two to three years and then it’ll likely level off,” he said. “We’ll just be doing the hiring to replace the retirements which is that 500 to 600 that’s been our historical attrition rate.”

With housing demand continuing to outstrip supply for the foreseeable future, LANL faces a problem, and so does the rest of the region. “It’s not just the Lab,” said Keith. “The Lab is part of a larger community. We’re all in this together, trying to find a solution. We all share a workforce, we all share housing in the region. We’re going to have to come up with joint solutions.” LANL is committed to working with regional partners and community leaders to figure out a solution, she said. “And quite frankly, it has to be more than a Los Alamos solution. When you look at the numbers of employees that we’re hiring and you understand the constraints in Los Alamos in terms of development, we’re going to have to expand as a region and offer more housing options in total.”

Barracks are not the solution

The obvious solution to a housing shortage is to build more housing, but Keith made it clear that LANL won’t be doing the building. “When we say we’re hiring more people and we’re going to need more housing, we’re continually asked, well why don’t you just do that yourself?” she said. “But building housing is not in our scope, it’s not in the work that we do. This is why we work very closely with our communities and community leaders. We’re all one community. There are some things that we’re never going to be able to do, like build housing. That’s not what we do. We do research and development.”

Mason, at the LWV meeting, put it even more succinctly: “The solution of building barracks is not one that I think is workable for the 21st century,” he said.

Regardless of who builds the houses, there are hurdles to cross, one of which is a shortage of skilled labor. “In every industry, labor is a big constraint right now,” Keith said. “I’ll tell you from a more global perspective, how it looks from my seat: we’re hiring unionized craft workers, construction trades, and professionals; we know they’re one of our highest demand areas, in terms of who we’re going to be hiring in the next couple of years.” And it’s not just LANL capturing unionized labor all over the state. “What my counterpart at Intel tells me is they’ve done a study that shows they can hire every qualified worker in the state of New Mexico and not have enough to fit their bill,” she said. “Facebook has a new [data center] going on in Los Lunas, and we’re thrilled for them, but that means there’s even more competition for the workforce. On top of all this, we need new housing.” That workforce demand, supplying the needs of LANL, Intel, Facebook, and other industries, is pulling from the same pool of people needed to build housing: the construction trades.

In other words, LANL and other industry leaders are growing their employee ranks by hiring, in large part, the same people who build houses. Those construction efforts go into the buildings needed by the industry, not into housing, because housing isn’t what LANL, Intel, and Facebook build. Even if another entity came along that was dedicated only to building housing, there wouldn’t be much of anyone left to take those jobs. 

“This is not just an issue in northern New Mexico or in just New Mexico, it’s a nationwide issue,” said Keith. “We hear about housing shortages nationwide; we hear about housing shortages with some of our other national laboratory partners. Our numbers are higher, we’re generally hiring more than other laboratories, but we all have our issues of scale.” 

The more rural the area, the harder it is to find the skilled labor needed for construction, she added. “Livermore may be a little different because they’re in an urban area. But if you think about the national laboratories across the country, many of us are in rural areas, for good reason. Washington State, Tennessee, South Carolina.” 

Mason, speaking at LWV, agreed that it’s more difficult for the rurally-located national labs to find employees—of any kind. “We’re in a less-populated region of the country, so there’s not a big base of potential employees,” he said. “Livermore Lab is in the Bay Area so there’s lots of people around. Argonne is in Chicago. A friend of mine once said that Los Alamos is at the end of the world’s longest cul-de-sac—and it’s a very beautiful cul-de-sac, but there’s not a lot of people around that we can draw on quickly.”

A seat at the table: regional approaches

With all this in mind, Los Alamos County has been “very aggressive” in its approach to increasing housing stock, Keith said. “We started conversations [with the county] years ago, knowing we were going to see an uptick in hiring and budgets, knowing that we were going to need housing. Los Alamos County has been looking at developing new housing and entering conversations with developers.” (A future story in this series will focus on the county’s efforts to increase housing stock.)

The City of Santa Fe is also developing a number of new rental units, she said, “and they also have new starts in single-family housing. Generally, when people start having families, they want single-family houses. And if we’re hiring people who owned a single-family home, they want to move back into this market: the single-family home.”

Other regional communities, too, have been working with LANL. “In Española we have a newly elected mayor, and he’s been very eager to have conversations and potentially explore new housing development in Española,” said Keith. “We’ve been working closely with McCurdy Ministries, of McCurdy School—they have a campus that was formerly a school. They’ve decided to partner with Homewise, who’s always had a nice footprint in Santa Fe in affordable housing, to do a new development in Española.”

When asked to clarify what “partnering with” and “working with” means in a practical sense, Keith said that LANL’s support comes in the form of data, not money. “What we can do is be open with people about our hiring needs—how many we’re hiring on an annual basis, what our budgets look like—so that they understand there are net new people coming into the community,” she said. “What we hear most often from developers is that they need financing partners to back them.” The data provided by the Lab, indicating an increased population and continuing demand for housing, helps developers secure financing, she said.

“We offer our regional partners a seat at the table, data, and buyers,” she summarized. “We bring people in who are buying, and renting, houses.”

“Students are really struggling with housing”

That brings renters into the conversation. While much of the discussion about housing is focused on buyers, many people coming into Los Alamos start off as renters. LANL does not keep data on how many employees are renters vs. buyers, but, “We make the assumption that our students and post-docs are mostly going to be renters,” Keith said. “They’re here for a shorter period of time than our permanent employees. And that population of students and post-docs is about 1,600, which is nothing to sneeze at. Not all of them are here year-round, the bulk of them are here in the summer, although we do have post-docs that are here year-round, and they too need housing.”

Summer students and interns often need short-term housing, which is as scarce as any other kind of housing in Los Alamos, she said. “We heard from our students after we surveyed them at the end of the summer that they’re really struggling with housing. And we’re really concerned about our ability to offer internships to the diverse candidates that we want to bring to the Lab because there are socioeconomic barriers.”

About a third of LANL’s workforce were students at one point, Keith said, so the knock-on effects in terms of diversity and equity can be far reaching. “If you can’t find housing and it gets overpriced, and you have to pay more for housing than you’re getting paid in salary, that means there are students who are priced out of an internship, out of an ability to come and learn and have an opportunity in STEM,” she said. 

Asked how many LANL employees are “rent-burdened,” meaning more than a third of their income goes to rent, Keith said LANL doesn’t keep data on that. “We don’t collect that information,” she said. “What I can say is that our current management has put a high priority on hiring locally. Those people would already have housing when you hire them, so it takes a little bit of the burden off new housing stock. It gives opportunities in the region for well-paying jobs at the Lab. Sixty percent of the employees hired last year were from New Mexico.” Whether those New Mexicans hired were able to stay in their houses, rather than moving, isn’t known, but “we do know the population of employees coming in from Albuquerque has increased. So when we talk about the number of commuters coming into Los Alamos, our numbers from Albuquerque have increased,” she said.

Hybrid and telework can also take pressure off housing demand by allowing people to work remotely, she said. “About 3,000 people are currently working hybrid or telework. We’ve also opened two office buildings in Santa Fe [for] accountants, IT, my office, support functions, public affairs; people who are ‘location neutral.’” There’s office space for up to a thousand LANL employees at the Santa Fe offices, she added, which could reduce commute time for many. 

“Surprise birthday presents”: the question of land transfers

A final point of discussion on housing that concerns LANL is where new houses might go. Every time the subject of housing comes up, the question of DOE land transfers comes up with it, and usually this conversation ends with someone disappointed. Keith said that LANL and its managing contractor, Triad, are silent on the topic because the land in question is owned by the DOE, not LANL. To answer the land-transfer question, I turned to Toni Chiri, spokeswoman for the NNSA. 

Chiri said that since the law laying out land-transfer requirements went into effect in 1997, “NNSA has spent nearly $500 million to prepare and convey 1,000 acres to Los Alamos County and the Los Alamos School Board.” Included in this are well-known tracts like Los Alamos Municipal Airport, Middle DP Road, the new Mirador subdivision, and the property where the White Rock Visitor Center sits.

Given the success of earlier land transfers, and plans underway to transfer hundreds more acres, it might seem reasonable to conclude that quite a bit of land would soon become available for housing. However, for many reasons, this is unlikely. 

“I don’t know what land people were dreaming about,” said Thom Mason, when I asked him about DOE transfers at the LWV meeting. “There’s really not a lot of options, to be honest. There’s Rendija Canyon, which has some challenges. Someday that may be possible, but it’s got a lot of lead in it, and there’s unexploded ordnance, and we’ve seen some of the surprise birthday presents that can come with land transfers not that long ago.”

The “surprise birthday present” Mason is referring to is likely the vitrified uranium found in 2020 along DP Road by county workers preparing a site for future housing. No records had indicated hazardous waste would be likely in the area. This unpleasant discovery, and the possibility of other such hidden hazards that might be unearthed in the process of building housing, has made the players involved reluctant to take on risk with other projects. 

“Any place you dig in Los Alamos you’re either going to find unexploded ordnance, historical artifacts of I think in this case cyclotron-produced microgram quantities of plutonium,” Mason said. “Or you’re going to find cultural artifacts or human remains.”

Some residents have expressed hope about housing being built on a future land transfer in Rendija Canyon, north of Barranca Mesa. “For several years, NNSA has been in talks with Los Alamos County regarding conveyance of 885 acres in Rendija Canyon,” acknowledged Chiri. “NNSA is currently awaiting response from the county on a proposal that includes deed restrictions on use of the land.” Those deed restrictions preclude the county “from performing operations or activities that would disrupt the soil and result in possible disruption of buried UXO (unexploded ordnance).” 

Since any housing would require the soil to be disrupted, the deed restrictions on Rendija Canyon effectively remove any possibility of housing being put there.

“Our options for land transfer are actually pretty severely limited,” said Mason at his November 17 LWV talk. “Especially when you take into account both the mission needs of the Lab and the fact that we do need standoff distance for what we do. In fact, in some cases I think there are some people who wish we were further away because occasionally the windows do rattle. We actually do work with high explosives.

“So yes, it would be great if there was some beautiful buildable land for housing that we could just transfer. I would be pushing for that as hard as I could. But I can’t identify what that option would be.”

The number of people moving into the region, and seeking housing in Los Alamos in particular, is likely to remain high in the coming years. And to date, supply has been unable to keep up with demand. As a result, the average price for a home in Los Alamos is now at half a million dollars, far beyond affordable. Barriers to new housing include labor constraints, discussed here, and regulatory constraints, which will be explored in future articles in this series. Some new housing is coming online in Los Alamos, and in Santa Fe even more housing is being built at a rapid clip, but it’s unclear whether the supply will meet the demand any time in the near future. Upcoming articles will explore the housing forecast.   

Editor’s note: Stephanie Nakhleh is a freelance writer and editor. She grew up in Los Alamos, though has lived in other places (Scotland, Santa Fe, Albuquerque, Boston) before returning to Los Alamos 7 years ago with her family. Have ideas for this series? Email sylvan.nak@gmail.com