A Guide to Building an Affordable Home in New Mexico

A Value Driven Approach

There are many aspects to building an affordable home. The most obvious is just simply the initial cost. The initial cost is going to be the most obvious factor in the monthly mortgage payments and is the most easily evaluated, but what are some of the other considerations? Let’s look at Location, Design, Execution, Operation, and Resale.

  • As a real estate agents say, “Location, location, location.” This aspect is going to determine the value of the home and any future improvements. A good location will improve the initial value of the home, the cost effectiveness of future improvements and will determine many other aspects in the livability and long term return on investment (ROI). A higher initial cost for the location can be quickly recouped by the effects it will have on subsequent investments. A poor location will reduce the value of all initial and future expenditures. It can also affect transportation costs, school quality, and insurance costs. The most important effect of a location will be on the eventual equity or resale value.
  • Design. Construction cost per square foot, maintenance, resale value, and operating costs will be very strongly influenced by design. The trend today is towards ostentatiousness instead of good design. In particular home designs that have lots of exterior corners and exaggerated elevations have an adverse effect. They cost more in every aspect of initial construction and will cost more to operate and maintain. Good design that will retain value involves simplicity and aesthetic choices derived from dividing simple masses into usable areas rather than joining lots of little spaces into a building plan. Initial design is not the place to save costs, but higher design costs don’t insure good design.
  • Execution. “The devil is in the details” is a motto to live by during construction. There are hundreds of decisions to make during the construction of a house. They will affect how well a home looks, feels, it’s operating and maintenance costs, and even how much cleaning it will require. A common mistake is to expect the builder to make all the right decisions. Another is to expect the building inspector to catch any mistakes. Diligence and legwork by the owners are essential. Independent third party inspection should be considered, such as required by LEED (Leadership in Energy and Environmental Design) Certification. New Mexico has a unique Sustainable Building Tax Credit that will offset the costs of certification, and meeting the requirements of this tax credit will help insure air quality, energy efficiency, durability and other criteria. Certification should also increase resale value. Other tax incentives to consider include Solar Tax Credits and Solar Sales Tax Exemption.
  • Operation will have recurring costs that should be considered as one of the most important criteria. An obvious example is energy costs. The amount of the home mortgage payments will usually be fixed for a long period while energy costs have risen 4-5% annually for the last 40 years. What was initially considered a reasonable energy cost will increase over the long term while expenditures are in after tax dollars without any return. In contrast, initial expenditures for energy efficiency will appreciate when energy costs go up and also with the increase in building costs, and share the tax advantages of a mortgage. There are energy efficient mortgages that essentially trade a higher initial cost for lower operating costs, allowing more equity to be retained.
  • Resale should be the uppermost criterion in all home ownership decisions and will be determined by paying attention to all of the above.


Contact Sun & Earth

  • Email: jimgraha@gmail.com
  • Location: 3314 East St, Las Cruces, NM 88005
  • Phone: 575-521-3537

Energy Efficiency

The wholesale price of propane increased at 3.8% per year from 1990 – 1999. That is the lowest annual increase we are likely to see given:

  • propane is tied to the price of petroleum and natural gas
  • petroleum prices have increased and are likely to be unstable, and storage facilities for petroleum, and especially propane are limited

Natural gas prices have increased sharply in the 1st part of this millennium because:

  • natural gas is difficult and expensive to transport, especially overseas
  • the United States has over invested in natural gas as a fuel for power generation.

The embodied energy (that is the energy used to make the building) can equal 5- 20 years of the energy consumption of a building. That one reason is why we prefer to use fly ash. It is a waste product that replaces part of the Portland cement in concrete. Portland cement production requires strip mining limestone, crushing the limestone, and enormous amounts of energy to convert the limestone to cement. Fossil fumes are consumed and carbon dioxide is produced both by fuel combustion and limestone conversion.

Buildings are a major source of the pollution that causes urban air quality problems, and the pollutants that contribute to climate change. They account for 49 percent of sulfur dioxide emissions, 25 percent of nitrous oxide emissions, and 10 percent of particulate emissions, all of which damage urban air quality. Buildings produce 35 percent of the country’s carbon dioxide emissions the chief pollutant blamed for climate change.

There are many opportunities to make buildings cleaner. As just one example, if only 10 percent of homes in the U.S. used solar water-heating systems, we would avoid 8.4 million metric tons of carbon emissions each year.

Sun & Earth Construction uses quality materials with low embodied energy, while caring about the environment around us and building cost efficient homes.

Reasons for Choosing Energy-Efficient Design

  • Tangibles
    • Economics – the short term returns to building owner
      • immediate reduction in utility bills
      • decreased household maintenance, especially cleaning
      • increased appraisal without increase in property tax assessment
      • qualification for energy efficient mortgage programs
    • Economics – long term returns to building owner
      • energy costs increase more rapidly than inflation, so energy efficient upgrades increase their cost effectiveness. They appreciate more rapidly than other building amenities, which may even depreciate
      • energy efficient upgrades will be saving money at the same time they are appreciating. Similar to rental property except that they are a passive investment.
  • Intangibles
    • Human rights and political self determination
    • Sustaining the environment

We are very pleased. The house has exceeded our expectations in terms of aesthetics, quality, and energy efficiency.”