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This study analyzes the housing market in Taos, identifying causes of crisis and proposing solutions. Recommendations include economic development for higher paying jobs, land supply increase, and infrastructure extension.
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THE MARKET FOR AFFORDABLE HOUSING IN TAOS Funded by: Town of Taos University of New Mexico – Taos Jeffrey Mitchell, Ph.D. July 12, 2011 Bureau of Business & Economic Research
Housing Costs • The majority of those in the workforce are unable to afford market-priced housing in Taos County. • About 12% of households could afford the median price of a market home (about $300 thousand). • Only about 5% of households employed in Taos County could afford the median price of a market home. UNM Bureau of Business & Economic Research
Capacity to Pay vs. Cost of Housing Gap between two lines represents shortage of affordable housing. UNM Bureau of Business & Economic Research
Causes of Housing Crisis • Two underlying causes: • Demand for housing by seasonal residents drive up property (esp. land) values. • Supply of land is constrained by state regulations and limited development of services (water & sewer). • Slowdown in the market is NOT a cause. UNM Bureau of Business & Economic Research
Household Responses to Housing Crisis • Households respond to high cost of housing in three ways. • Publicly subsidized housing • Substandard housing (esp. trailers) • Subdivision of family land • These strategies are not sustainable. • Without effective, intervention high cost of housing will limit labor supply and long term economic growth. UNM Bureau of Business & Economic Research
Future demand for affordable housing • Optimistic scenario – growth of middle income employment base (professional & business, healthcare and education services) • Est. demand for 250 low-income units (monthly costs <$850) by 2018 and strong demand of affordable owner-occupied units ($160k-$200k). • Pessimistic scenario – continued growth of low income employment in hospitality & construction. • Estimated demand for 1,500 low income units by 2018. UNM Bureau of Business & Economic Research
Recommendations • Economic development that emphasizes higher paying jobs, increasing the capacity of workforce to affordable available housing. • Increase the supply of land available for residential development. • Extend water & sewer infrastructure. • Encourage higher density residential development on serviced land. • Town & County collaboration. UNM Bureau of Business & Economic Research
THE MARKET FOR AFFORDABLE HOUSING IN TAOS Funded by: University of New Mexico – Taos Town of Taos Jeffrey Mitchell, Ph.D. July 12, 2011 Bureau of Business & Economic Research