‘It’s A Crisis’: Housing And The Community Development Department

My family in the mid-70s on the deck of the La Senda home. Courtesy photo

for the Los Alamos Reporter

This story is the fifth in a series of guest articles about the housing situation in Los Alamos. The first is on LANL, whose hiring has caused a further housing crunch in a town with an already-acute shortage; the second looks at housing from the real-estate-agent perspective; the third takes on the viewpoint of several young renters struggling to find adequate housing and debating their future in the town; and the fourth is a brief history of how the new low-income housing on DP Road came to be. For this month’s story, I sat down with Paul Andrus, director of Los Alamos County’s Community Development Department, and Dan Ungerleider, the county’s economic development administrator (also under CDD), to talk about the role Los Alamos County has in housing production. Our wide-ranging discussion on everything from housing affordability to traffic, schools, and infrastructure will result in more than one article.

“It’s a crisis”

When my parents first moved to Los Alamos in the early 1970s, there was still room to stretch out. We lived in a little house on Grand Canyon Drive in White Rock for a few years while my father built our house in La Senda. Somehow, he managed to work full time at the Lab while also building the house we would grow up in. Like a lot of physicist- or engineer-built houses in Los Alamos, the house is a little quirky, but it’s been lovingly maintained through several other owners since my parents sold it in the early aughts.

My family in the mid-70s on the deck of the La Senda home

The southwestern end of White Rock—La Senda and Pajarito Acres—was just being built out in the late 60s and early 70s. My parents were lucky enough to be among those able to capitalize on the available land while it still existed. Some of those houses are still owned by the people who built them. Those residents are sitting on a treasure: my old, odd childhood home is now valued at about $800k. Drop the same house with the same acreage in a town that isn’t landlocked, that doesn’t have an Area Median Income (AMI) of $100k, and it will not fetch that sum. 

This will seem like a truism to anyone who knows real estate, or who has a general grasp of economics, but the value of a house is relative. Even though homes in Los Alamos are on the older side and tend to not be updated compared to other communities, they are so expensive because there are so few of them to begin with and demand for them is high. 

“It’s a crisis,” said CDD director Paul Andrus. “We currently cannot address the need. There’s functionally no housing supply. Based on what we understand on the Laboratory’s hiring, and also [the hiring projections of] the other major employers like the County and the hospital, we won’t be able to address the full need. Even the projects we have coming online won’t scratch the surface.”

“We have no greenfield opportunities”

Andrus said a few small vacant parcels remain, such as the little field on North Mesa where the proposed Arbolada subdivision is slated to be built, but there are no more La Sendas and Pajarito Acres for the town to expand into. “We have no greenfield opportunities,” he said, using an urban-planning term that describes an undeveloped parcel, where “you have to bring utilities, water, electricity, sewer, everything, to it. In Los Alamos we don’t even have that option.” 

Previous articles have touched on this, but it’s worth revisiting why Los Alamos doesn’t have that option. Some housing developments in Los Alamos were once land transfers from the federal government to Los Alamos County, and many residents have pinned their hopes on future land transfers taking housing pressure off the town. However, in spite of the town’s and LANL’s urgent workforce-housing needs, it’s unlikely more land transfers will be forthcoming. LANL, Triad, and NNSA (National Nuclear Security Administration) leaders have made clear that future transfers are not in the cards, at least not in the near term. Parcels have been analyzed and found unsuitable. Ted Wyka, the manager of NNSA’s Los Alamos Field Office, emphasized this at a recent County Council meeting: “Now, I recognize the county’s desire to receive more land from NNSA to build housing is critical,” he said, addressing Council at a March 14 meeting. “Unfortunately, we do not have any that is free of possible environmental challenges, Native

American cultural sites, or not within our programmatic buffer zones—specifically for the high explosive mission work that we do.” 

In other words, the county has to work with what it’s got. When new land for spreading out is unavailable, cities historically build up and add density to maximize the use of what land is available. The county’s 2019 Housing Needs Analysis projected that the town has the capacity to increase housing by thousands of units by maximizing “infill,” a term that means adding density to places that are already developed. If La Senda and Pajarito Acres were once examples of “greenfield development,” an example of “infill” is the proposed redevelopment of the old Mari-Mac shopping center by Columbus Capital.

The Housing Analysis found that given the zoning rules of the time, the town could accommodate at most an additional 5,200 housing units. “County-owned land that is currently being used for a public purpose accounts for 3,000 units of capacity,” the study said, “leaving a capacity of 2,200 units if these properties are not considered.” 

County studies have estimated that downtown Los Alamos alone has the potential for many more housing units, with a more realistic chance of being built than repurposing county-owned land already in use. The county’s 2021 Downtown Master Plan states that “The Development Framework, as depicted, is capable of infilling an approximated 507,996 square feet of commercial space and 2,591 housing units” in downtown Los Alamos.

Andrus has set his sights on a more modest number in the near term: “Let’s say theoretically, and it’s not beyond reason, that within the next few years we have an additional 800 to 1000 residential units in the downtown Los Alamos area,” he said. “This would include supportive services, so we’d want to build-in [to this vision] a daycare, a dry cleaner, more places to grab a breakfast burrito. We’d also look for a transit center of some sort, with an efficient parking lot.” This vision, he added, is spelled out in detail in the 2021 Downtown Master Plan.

The “missing middle”

The reason for the county’s pivot toward infill isn’t just the dearth of greenfield parcels, it’s also affordability. While a typical LANL scientist may be able to afford the town’s average home price of $500k, that price tag is out of reach for those making less than the $100k AMI. The type of housing needed is called “the missing middle” and refers not to “middle class” but to medium-density housing, somewhere between single-family homes and high-rise apartments.

“The approach we’re taking is not to recreate the historical [low-density] development, it’s to look at that missing middle,” said Andrus. “Single-family development is almost instantly outpriced for the missing-middle folks, for the younger folks. The development that we want to support in the downtown areas is that missing-middle type of product.”

The shift to higher-density development is evident on the ground this year, with active housing construction visible in pockets around town, but it happened years ago on paper. The town’s guiding policy documents have long listed housing as a top priority, have said that infill should be the focus, and have recommended policies to get the town’s housing supply in better balance with demand. “A land use and policy review pointed out the existing low-density housing pattern and the potential for higher densities,” says the Housing Analysis. “The [Comprehensive Plan] recognized the code incentives that are in the development code, including accessory dwellings allowed in some residential districts, high-density mixed-use projects allowed in downtown overlay districts, and reduced parking requirements for mixed-use projects.”

Getting the zoning right

Such affordable-housing policies have been illegal in the past, not only in Los Alamos but everywhere in the nation. Zoning is legislated at the local level, so each town decides its own housing policy, and for the 100 years of American zoning history, low-density housing has been the only legal option for most residential land. Cities are beginning to rethink this. Los Alamos, sitting at a decision point, has moved in the direction of allowing higher-density housing than it has historically. In 2022 the County Council adopted a major overhaul of Chapter 16 of the Development Code, a move aimed to meet the Comprehensive and Master Plans’ directives to increase development and revitalization, and to reduce what the Master Plan called “outdated” restrictions on housing. In May of this year, Council unanimously voted to adopt two key provisions to increase housing and downtown revitalization: one to allow taller buildings downtown, and one to reduce parking requirements. These changes set the stage for hundreds and potentially even thousands of infill units—and while setting the stage is not a guarantee housing will be built, it does make it possible.

Meeting the need

Asked how the numbers from the 2019 Housing Needs Analysis hold up, Andrus said they were holding up well until Triad, the management and operating entity for LANL, decided to increase LANL’s workforce dramatically. “Almost overnight the hiring projection from the Lab changed,” said Andrus, “And so that gap of projected need is still something that we need to work on.”

The numbers from the Housing Analysis, in other words, are now outdated—with the demand/supply balance only likely to look worse in the near term. 

Andrus added that the silver lining is the increased need plus the code overhaul has the attention of developers who previously did a hard pass on the isolated, landlocked community. LANL provides developers hiring projections, the town provides a development-friendly atmosphere, and this combination has attracted the attention of home builders, he said.

“We just spoke with a developer yesterday who understands what that [demand] number is, and so in terms of their perceived risk, they’re not worried,” said Andrus. “We know that the affordable housing units on DP road, the 70 units, filled up overnight and there’s a waiting list for those as well. We don’t have nervous developers.”

A picture containing outdoor, sky, building, car

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A rendering of the proposed Mari-Mac redevelopment, which includes 322 housing units,
a parking garage, and ground-floor retail. Source: Columbus Capital

While the stage is now set for more housing, it’s a long road ahead before supply ticks up to the point it meets demand and normalizes cost. “Even if the Lab were to freeze today and not hire anymore, the housing market is still broken,” said Dan Ungerleider, the county’s economic development administrator. “In terms of affordability and all the things that Paul was talking about: It’s capital, it’s contractors, it’s land, and that all results in just a broken market. And that’s why you’re seeing homes that should be affordable, aren’t. That’s why you see people not leaving their homes. Because they have one, they’re not going to take the risk of moving somewhere else. And there isn’t a place to move.” 

The “somewhat good news,” Ungerleider added, is that Los Alamos County isn’t the only entity rising to the housing-crisis challenge. Surrounding counties, whose economies are also impacted by LANL’s workforce growth, are looking at ways to address the shortage. “The region is trying to correct for it,” he said.

“Maybe one of the key differences, at least from a policy perspective, is that we understand that we’re going to need a bigger boat,” said Andrus. “We need to get our regional partners to recognize that they can help. They have land.” 

Española, Pojoaque, and Santa Fe County have been collaborating with Los Alamos, he said, in a way that didn’t always happen in the past. “Anybody who will come to the table, we’re talking to them. We want to help the municipalities. Also, I’m introducing the development community to other communities right now. I’m saying, if you can’t build here [in Los Alamos], and we’re not ready for you, take a look at this other site. We need housing. We are reaching out and seeing the region as a housing whole.”

“People are traveling from Rio Rancho, from Albuquerque, Taos, Santa Fe, because they’re living there to work here,” said Ungerleider. “People are driving much further to get here to work. So now we’ve got a broken housing environment, which is causing a strain on our business environment, because our businesses have difficulty attracting a good employee base. It’s more difficult to provide services to our residents.”

The impact on small business

The connection between housing supply and the strain on the business environment may not seem obvious at first, but housing affects everything. In Los Alamos, the business strain comes from two fronts, housing and salary. On the housing front, high-income LANL employees are outbidding lower-income service workers for the limited housing that is available. It doesn’t take long for this sorting mechanism to price out everyone except the highest-income people, meaning there’s nowhere to live for waiters, childcare workers, mechanics, line cooks, cashiers, dish-washers, and shelf-stockers. This leaves local businesses in a lurch. On the salary front: if you have any skills that LANL can use, you may take a higher-paying job at LANL over a lower-paying job for a small business. Both are factors, among others, in why local retail has failed to thrive and Los Alamos has many empty storefronts.

NNSA’s Wyka recognized this reality: “I’m hearing from the community that the supply of available workers is shrinking for small business, which is a concern,” he said in his March 14 presentation to Council. “While I will never apologize for the high wage jobs that NNSA and the Lab offer, we do need to look at more ways to partner with our local communities to grow the available workforce.”

Ultimately, economists agree that housing supply is the primary problem so, increasing supply is the fix. In a healthy market, new-built houses (like new cars) would be bought by people with higher incomes, while older homes (like used cars) would remain affordable for others: this is a process called “filtering.” But when supply has fallen so far from demand, the initial beneficiaries of a supply increase will still be those with the highest incomes—this can make it appear as though a supply increase isn’t working to reduce prices, which frustrates people seeking affordable housing. So long as there’s more demand than supply, those with more resources will win. Empirical research shows that increasing supply really does reduce housing costs in the long term, but for a town to maintain healthy diversity, other measures may be needed to increase housing affordability in the short term. So other than a supply increase, how does affordable housing come about?

Getting enough affordable housing

There are several federal programs that provide housing assistance for Americans who can’t afford market-rate housing, but two of them are dominant: Section 8 housing vouchers on the demand side, and dedicated IRS Low Income Housing Tax Credit (LIHTC) development on the supply side. Under Section 8, voucher recipients pay a third of their income toward housing and the government covers the rest. Although on the whole economists prefer Section 8 as a housing subsidy, and many policy experts recommend expanding the program, the program is poorly funded and voucher recipients often face tremendous challenges, including landlord discrimination.

I covered the LIHTC (aka “tax credit”) housing program extensively here, but in short, private developers build dedicated low-income apartment buildings, reserved for people whose salaries fall a certain percentage below the AMI; this income restriction prevents high-income people from outbidding lower-income residents. Tax-credit housing has its own shortfalls and critics, but it is currently the primary way most new-built, below-market-rate housing happens in the United States. 

There hasn’t been much dedicated low-income housing in Los Alamos, but that has been changing as the county has redoubled its efforts to entice tax-credit developers. “In New Mexico, the Affordable Housing Act enables local communities to provide incentives, or financial, or land, or any support, to developments that are going to provide housing for lower-income households,” said Andrus. “The county has its own ordinance: it’s tied to that state law that allows us to do that. I’ll use the two projects that are down on DP Road: we donated the land, so total donation, and we provided brand-new utilities to serve those developments.”

Los Alamos County has other tools to help with housing affordability as well: “We also have two programs that we fund on a yearly basis that the housing partnership, a nonprofit, runs,” said Andrus: “The Homebuyer Assistance Program, which helps with down payments, and the housing rehab program (also known as the Home Renewal Program). We have a multi-year contract with the Los Alamos Housing Partnership to administer that program, and then we provide funds to actually provide the loans as well.”

“The housing rehab program is a super-powerful program that allows people to stay in their home, in a home that needs serious maintenance work done to it,” said Ungerleider. “So we’re reinvesting in our existing housing stock, allowing someone to stay there, and there are energy-efficiency implications as well. But more importantly, that person could stay in a good home, and then it allows for someone that might not be able to afford to live here to come in and live in a quality home and improve one of the older homes. They can get it renovated to current standards or expectations.” Both Andrus and Ungerleider said the programs are underutilized and encouraged more Los Alamosians to look into them. 

Not in the toolbox: inclusionary zoning and rent control

Two affordability tools that are not in the Los Alamos County toolbox are inclusionary zoning (IZ) and rent control. Even though they aren’t used in this county, it’s worth discussing them because both policies tend to come up in discussions around housing affordability. 

Inclusionary zoning is a regulatory tool that requires market-rate developers to set aside a certain percentage of new-built housing as “affordable housing,” meaning those units sell below the market rate. The term is meant as a contrast with “exclusionary zoning,” which refers to the typical American city’s low-density zoning codes—in Los Alamos, 77 percent of residential land is zoned as low-density (i.e., single family homes), and this is considered “exclusionary zoning.” IZ, however, almost always applies to multifamily housing, not single-family zoning, so it’s not a solution to exclusionary zoning. It also, very often, has negative downstream effects.

Los Alamos does not have an IZ ordinance, but Santa Fe does. “My dad wrote Santa Fe’s inclusionary program in 1997,” said Daniel Werwath, a Santa Fe resident and affordable-housing expert, in an email interview. “Inclusionary zoning can be an important tool as part of a suite of programs. It’s typically the last program I recommend after every other type of program is implemented—incentives, funding zoning reform etc.—because it has a high potential for negative unintended consequences, including either decreasing supply or driving up the cost of entry level market rate housing.”

This isn’t to say that IZ never works. “Inclusionary zoning works well where you have high production luxury markets and ample incentives to offset the cost of compliance,” Werwath said. “In supply-constrained markets, any increase in cost—i.e., selling a house for less than it costs to build—will be absorbed not from profits but by increasing the cost of the other housing and therefore end up being paid by consumers. Poorly designed inclusionary programs actually slow or stop development, shut down housing creation and exacerbate affordability problems; see Santa Fe rental housing 2005 until the fee in lieu option was created.” The fee-in-lieu is an exemption that allows a developer to pay a fee to the city in lieu of having to provide below-market-rate apartments. Because it’s a one-time predictable cost, developers often prefer to pay the fee rather than be saddled with the long-term unpredictability of IZ. The fees collected by the city usually go to affordable-housing programs.

There are other negative unintended consequences of IZ that are more abstract, Werwath added. “To make projects with high affordability requirements cash-flow, you need bigger economies of scale, and in places like Santa Fe, scaled projects can only go at the urban fringe. You then end up de facto segregating affordable housing.”

Andrus agreed. “From a small-community perspective, in a market that’s so difficult in and of itself, we’ve tried to stay away [from IZ]. We don’t have proper market dynamics to go there,” he said. In other words, if “bigger economies of scale” are necessary for IZ to succeed, then the smaller a community, the less good a fit IZ is. 

Having said that, Andrus indicated there are ways to get the good outcomes of IZ (a certain percentage of affordable units) without the downsides (less development, and more expensive development, overall). As with the Bethel tax-credit housing on DP Road, the county could effectively subsidize affordable units for a developer, but without necessarily going through all the bureaucratic complications of tax-credit housing. The state does allow the county to donate resources toward affordable housing, so the county could donate land or utilities in exchange for a certain number of affordable units. This has not happened yet, but it has been discussed, said Andrus. If the county “financially participates, that brings up-front costs down, it’s a little easier to get projects going, and it reduces the level of risk a developer is taking,” he said. “We haven’t yet structured a development agreement with these aspects in mind, but Council has had the conversation. It’s in the mix at this stage.”

Rent control, like IZ, is a policy that sounds appealing in the abstract, but it’s more complicated, with more downsides, than many people realize. For this reason, rent control has fallen out of favor generally, although there are indications of a comeback. In any event, rent control is not a policy in Los Alamos, or in New Mexico generally. Rent is de-facto controlled in income-restricted housing like that on DP Road; Section 8 housing vouchers, which cap housing costs at 30 percent of income, could also be considered a form of rent control. But the formal kind of rent control, where the government limits what a landlord can charge, is “not legal under New Mexico state law currently,” said Werwath.

“For rent control, I appreciate this analogy: If you have 10 families who want a pizza and only five pizzas, fixing the price of pizza doesn’t help the other five,” he said. “I agree with the type of rent control deployed in Oregon that protects people from shock increases—I think it’s an 8 percent annual cap. But the schemes where the government sets prices for housing produced through market forces are doomed to fail, and actually disincentivizes building more housing, again increasing the core problem.”

Rent control is also “a blunt tool, subsidizing housing for many that don’t actually need subsidy,” he said. “Like Land Trusts, it was also tried widely in past decades, and I think if it was really successful, we’d see more policies like that, rather than the majority of them having been abandoned.”

Both rent control and IZ are appealing to policy makers, who like that it costs them nothing, and to the general population, who like the thought of “sticking it to the greedy developer,” said Werwath. “But in reality [both policies] can harm consumers and overall affordability much more than help if not deployed thoughtfully. And again, there are so many better things to do first.” He made another analogy: “It’s sort of like putting a solar [panel] on a shack. You want to insulate and put good windows in first.”

Back to density

This brings us back to the CDD’s primary solution to the Los Alamos housing crisis: increasing supply through dense infill.

“When we’re talking about densities, that’s one of the primary reasons why we wanted to re-envision our downtown areas,” said Andrus. “And that is one of the key elements that we wanted to build into the White Rock Town Center and the Downtown Los Alamos plans: to provide a policy environment by which people wanting to come in and develop or redevelop would have some flexibility to be able to say, ‘hey, we’re addressing the needs that were identified in your vision.’ The best situation for densities is in these downtown redevelopment areas.” 

The recent Metropolitan Redevelopment Area (MRA) designation for White Rock Town Center was another win for the Community Development Department in their goals to increase housing and revitalize neglected areas. New Mexico’s MRA designation goes beyond simple rezoning. It’s a more intensive tool, meant for areas that are blighted, underutilized, and/or economically depressed, which allows greater government assistance in housing and revitalization. White Rock’s MRA designation “actually loosens up some of the Anti-Donation Clause elements, and supports economic development activities such as mixed-use development,” said Ungerleider. “So that’s more housing. The county can now help demolish buildings, paper infrastructure, and relocate roads for projects that comply with our goals and objectives as outlined in our downtown master plan. That’s going to be a great tool once we attract someone who can do what we’re asking them to do.”

Different dreams

The house my father built in La Senda was his dream: a suburban home on a large lot, a feeling of being “away” from everything. Yes, this meant an hour-long bus commute to Los Alamos

Middle School for me, but for my parents’ generation, suburbia was the goal and the land was there. Now in high-opportunity cities like Los Alamos, the land is gone. Sprawl in the West has reached its limits, bumping up against the fire-prone wildland-urban interface

But also, the dream has changed. Young people aren’t just settling for dense infill housing: many seek it. My daughter, 25, is thinking about where she and her husband will live after she finishes graduate school. “I would be much more likely to move back to Los Alamos if it had both more housing and more businesses,” she said. “I would rather live somewhere that is walkable and doesn’t require a car to go everywhere.” She has a model in mind: her husband’s hometown of Ibi, Spain, roughly the same size as Los Alamos but with dense housing intermixed with shops, cafés, and pubs, the way European cities and towns typically look. “If Los Alamos were more like Ibi, which has a lot of restaurants and bars and is easy to walk around, I would be much more inclined to live there. Not only are there more things to do, but it also creates a much more social atmosphere because people live near each other and have lots of convenient places to congregate,” she said. 

“You can have all those things, and even for the older folks too—why not?” said Ungerleider, when asked about planning for a livelier, more social live-work downtown. “Even this little park here next to the bank in front of the Municipal Building—that’s a gathering place. We’re trying to create these places and downtown development. With the numbers of people you bring in, you could justify it. You could really do some great stuff.”

Stephanie Nakhleh: About me: I’m a writer by trade and volunteer my time as a member of the Planning and Zoning Commission of Los Alamos. Note that I do not speak for the Commission—the hat I wear here is that of a journalist. Have ideas for future articles? Email me at sylvan.nak@gmail.com

Further reading: 

Ten Actions Cities Can Take to Improve Housing Affordability: https://bipartisanpolicy.org/blog/10-actions-to-housing-affordability/

To Solve the Housing Crisis, We Have to Increase the Housing Supply: https://jacobin.com/2022/09/housing-supply-rents-crisis-canda

Zoning, Land‐​Use Planning, and Housing Affordability: https://www.cato.org/policy-analysis/zoning-land-use-planning-housing-affordability

To Improve Housing Affordability, We Need A Better Alignment of Zoning, Taxes, and Subsidies: https://www.brookings.edu/policy2020/bigideas/to-improve-housing-affordability-we-need-better-alignment-of-zoning-taxes-and-subsidies/

Universal Housing Vouchers Would Change the Face of Poverty: https://www.vice.com/en/article/yp7ppj/housing-vouchers-would-change-the-face-of-poverty

Housing Policy and Affordable Housing (an overview from the London School of Economics): https://cep.lse.ac.uk/_NEW/publications/abstract.asp?index=9259