Advocacy groups including the U.S. Chamber of Commerce and the American Enterprise Institute (AEI) earlier this year proposed auctioning off federal lands to address the national housing shortage.
In an interview with Scotsman Guide, AEI’s housing director Edward Pinto suggested that states in the Western U.S. with large swaths of lands controlled by the Bureau of Land Management could be developed with new housing stock, with the greater land supply pushing down the costs of newly constructed homes.
A report released Tuesday by Realtor.com argues that unlocking those federal lands would have limited impact on the nation’s housing shortage, as states like Nevada, Arizona and Montana that have developable federal land “either already have sufficient housing supply or lack the infrastructure, jobs and population density to support major new development.”
“Opening up federal land for housing development may generate incremental supply in parts of the West, but it’s not a silver bullet,” Realtor.com Chief Economist Danielle Hale said in a press release. “The most severe shortages exist in places like the Northeast, where developable federal land is virtually nonexistent.”
The U.S. faces an estimated shortage of 3.8 million homes, according to Realtor.com. To build that many homes at a population density matching the median county in the U.S., the real estate listings company estimates it would require nearly 10 million acres.
That acreage is hard to come by on the East Coast, though — particularly in the densely populated Northeast, where the housing shortage is most acute.
If a large percentage of the U.S. population looks West over the long term to seek affordable housing, it would bolster the argument for developing federal lands. But the Realtor.com report maintains that “such migration would require major transformations in the labor market, especially increased support for remote work and new economic hubs.”
Hale argues instead for zoning and land use reforms in densely populated, high-demand markets.
“While freeing up federal lands for housing is one of many solutions on the table, addressing the housing crisis at scale requires aligning supply with where demand actually is,” Hale stated. “That means advancing local reforms — such as easing zoning restrictions, encouraging missing middle housing and investing in infrastructure and transit — to unlock land that’s already close to jobs, schools and amenities.”
