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Several of the candidates at the council Q&A session talked about the need for affordable housing in Los Alamos, evincing what to me is a basic ignorance of economics.
The cost of housing is based on the cost of its economic inputs; that is, land, labor, materials and capital. The price of housing is established in an auction market between a willing buyer and a willing seller.
As the run-up and collapse of the recent housing bubble illustrate, the two are only loosely linked.
A developer analyzes the local market and attempts to find the right combination of land, labor, materials and capital to entice buyers to his product. He can reduce the land inputs by building higher density housing (trailer parks, apartments, town homes, duplexes and quads).
He can reduce the labor inputs by using mass-production techniques based on common designs (see Piñon Trails in White Rock), or factory assembly line processes for modular, Denver Steels, mobile homes, or pre-assembled panels (SIPS).
Material cost can be reduced by using cheaper materials or less of them by building smaller homes.
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