Part 1: “It’s Housing Driven”

LANL, Hiring, and Local Housing

Originally published in the Los Alamos Reporter in December 2022

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 rware 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 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