We can have affordable housing: why it’s scarce and how to fix it - part 1

Breaking the myths around housing affordability

Screenshot from Zillow showing the price history of a typical Los Alamos home

One of the hardest lifts I have as a professional explainer-of-things is getting people to understand how housing affordability happens. People carry ideas so cemented in their heads that they’re almost impossible to budge. I know because I had those same ideas—that’s how received wisdom works. You just know things because, well, everyone knows them! Duh?

But then I joined our local planning and zoning commission (obligatory “I speak only for myself” clause for the lawyers), and my narratives got shattered, one by one.

Allow me to shatter yours.

Here’s the thing about Los Alamos: we’re in a housing crisis largely of our own making. When LANL began its massive hiring spree in 2018, adding thousands of employees and growing its workforce by more than 50%, our housing supply remained virtually frozen. Predictably, home prices saw a 75% spike. Paychecks have not kept up, not even close, rising just 18% in the same period. Average rents have jumped an astonishing 100-130%. This isn’t just an inconvenience—it prices out our teacher neighbors and firefighter friends who keep this town running.

The basic economics

Supply and demand work on housing like they do on anything else. Consider eggs: if a bunch of chickens get bird flu and die, egg prices go up. Whenever demand outstrips supply, prices rise. You see this with Los Alamos housing, where huge demand from Lab hiring smashed into supply scarcity and sent prices soaring.

The numbers tell the story clearly: According to the county’s Affordable Housing Plan, Los Alamos needs 1,300 new housing units by 2029 to maintain the status quo on affordability—i.e., just to keep things from getting worse. Yet we’re permitting only about 62 units annually—less than half the 150-250 units we need each year to close the gap.

Hey, those people we’re not housing here can just commute, right? Well, it matters how close houses are to jobs. Shoving people off the Hill (and out of sight) is like shoving trash into a landfill or carbon into the atmosphere. Just because the problem is blissfully out of your face doesn’t mean the damage isn’t real.

The physical distance between the job a family needs and the housing a family can afford keeps getting wider. Almost 70% of the local workforce—nearly 10,000 people—commute into Los Alamos. That’s thousands of cars on our roads, thousands of hours of family time lost, and a tremendous burden on our infrastructure and environment. Those lengthy and increasingly dangerous commutes aren’t usually a personal choice—they’re a necessity driven by a rental vacancy rate of just 2.4%, far below the 5-7% that’s considered healthy for a functional market. For homeowners, that vacancy rate is even lower at 0.8%.

Image from the 2024 Los Alamos Affordable Housing Plan

Who really benefits from housing scarcity?

People get mad at developers—like the ones building the apartments by the hospital—but that company (I don’t know them, no inside-baseball here) is probably bleeding money. Even at their asking prices, I bet they’ll be lucky to recoup their costs given today’s construction and financing realities.

So sure, call them “greedy developers” if you want. But are they the only ones deserving that label? What about the average homeowner who bought her house for a strawberry and sells it for a suitcase of Benjamins just because she got lucky on timing? If you want to call someone greedy, call homeowners greedy. They own land. They profit from it. Why do they get a pass?

Photo by Kostiantyn Li on Unsplash

In Los Alamos, about 73% of housing units are owner-occupied, and on average these owner households earn 45% more than renter households. Meanwhile, 24% of renters in Los Alamos are cost-burdened, spending over 30% of their income on housing. The system works exactly as designed, benefiting those with a foothold while making it increasingly difficult for others to gain entry.

This isn’t new. In the landmark 1926 Euclid v. Ambler Supreme Court decision that established zoning as we know it today, the court characterized apartments as “mere parasites” on the good, productive citizens who own homes. This perception—that homeowners represent virtue and renters vice—is embedded in our policies, if not our explicit attitudes. The result is a housing system that transfers wealth from the young to the old, from newcomers to established residents.

The real culprits: policy choices that create unaffordability

There are easy answers for why housing is unaffordable—and harder, uncomfortable ones.

The easy (and true!) answers:

• Land for sprawl is scarce in Los Alamos, with only about 250 acres deemed feasible for residential development

• Labor is scarce, especially skilled construction labor

• Materials are costly post-2008 and worse post-Covid

• The Fed jacked up interest rates to fight inflation, which worked—ish—but made housing even more expensive

And yes, in Los Alamos, these factors have scared away homebuilders and stalled some developments that were approved.

But we weren’t building enough housing long before those factors came into play. Housing (and thus, population) has been relatively flat here since I was a child, and I grew up in the Cold War. It’s been a while.

Source: US Census

So what’s the real reason?

The uncomfortable truth is that the market has been distorted by design. Zoning. Land use. Regulations that lock in advantages for a privileged few.

Los Alamos County’s restrictive zoning designates the vast majority of our residential land for single-family homes only. These rules prohibit the “missing middle” housing—duplexes, triplexes, quads, townhomes, and small apartment buildings—that throughout history have provided affordable options for young families, for workers, for entry into the middle class. Our land-use code requires minimum lot sizes, maximum building heights, significant setbacks, and extensive parking mandates, making it nearly impossible to legally build affordable housing.

These aren’t natural market conditions—they’re policy choices. According to the 2024 Polco National Community Survey, only 13% of Los Alamos residents rate the availability of affordable housing as good, and just 23% feel positively about our housing options. Both metrics are significantly lower than national benchmarks. And when asked directly about priorities, residents ranked housing at the top of their list.

We know what we need. We’re choosing not to build it.

(I’m vowing to keep these posts short! If they get long, I’ll break them in half. Stay tuned for part 2: The supply side of the solution … and what you can do to help.)