An idea that picked up steam during the presidential campaign is to address the national housing shortage by auctioning off federal lands. Both President Donald Trump and then Vice President Kamala Harris talked about the potential.

The U.S. Chamber of Commerce and the conservative-leaning American Enterprise Institute (AEI) back the idea, calling it “Homesteading 2.0,” referencing the 1800s-era policy that granted 160 acres of western territory to people who agreed to live on the land for five years or more.

“We have a housing crisis in America and businesses, employees and families are feeling the impact every day,” said Makinizi Hoover, the Chamber of Commerce’s senior manager of strategic advocacy. “The chamber wants to do all that we can to help ensure that our businesses have the employees they need to continue to grow and thrive.”

Everyone agrees the U.S. faces a housing shortage, with estimates varying but running into the millions. The federal government owns large swaths of open land mostly in the West, about 650 million acres in the U.S., or about 30% of the land in the country, according to the U.S. Government Accountability Office. 

AEI’s housing director Edward Pinto points to states with acreage controlled by the Bureau of Land Management (BLM) in the West: Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah and Wyoming. All those states suffer from significant housing affordability issues, with median home prices growing much higher than median incomes, he said. Greater land supply would push down costs of newly constructed homes, he argues.

AEI identified multiple cities in the West with nearby BLM land that could be developed including Las Vegas; St. George, Utah; Lake Havasu City, Arizona; and Bend, Oregon. He also suggested that even new cities — what he called ‘freedom cities’ — could be built, a process he said could take decades.

“We are not talking about Smokey the Bear land here, national parks, natural forests or military bases,” Pinto told Scotsman Guide earlier this year. 

Still, some are skeptical. Ali Wolf, chief economist for Zonda, a data provider on new home construction, doesn’t see this as a viable option to address the housing shortage.

“Homebuilders haven’t really been focused on the prospects because they see all the hurdles,” Wolf wrote in an email. “To convert land into a developable lot takes city approval, grading the land and infrastructure. Each of these steps take time and money.”

She says much of the land in the West is in mountainous or hilly areas or in desert areas. There could be issues with access to infrastructure, congestion patterns, water supplies, fire dangers and other problems.

“The land is often not positioned where people want to live,” Wolf wrote. “For example, there could be land available two hours outside of a central business district. There may be some folks that want to live there, but it’s unlikely to make a difference to home price in core parts of a given market.”

There’s an appeal to this “untapped potential” of federal land being used to answer the housing shortage, said Brett Theodos, senior fellow at the Urban Institute. He thinks the idea should be explored, but the potential impact might be smaller than what people expect.

“The challenge starts to be when we look at where that land is, how developable it is, how much water it has and how proximate it is to a job,” Theodos said. “So, the Venn diagram gets pretty small when we begin to think through what are the parcels and properties that are really attractive to develop and that the Feds could put in play.”

The Trump administration made moves in early March to offload hundreds of federal office buildings. The administration said the buildings are underutilized and disposing of them would save taxpayer money. 

Federal land within existing cities could be expensive to convert to land for residential use. Theodos pointed to federal buildings in Washington, D.C. To be repurposed, the federal government or a developer would need to spend millions to remove asbestos and lead and get the property ready to be repurposed.

Even vacant land would likely need to be sold for $1 or some other nominal amount, Theodos said. If the federal government would subsidize development in that sense, Theodos said there’s “lots of room in Syracuse and Rochester and Buffalo and Youngstown and Cleveland and Detroit.”

“It’s one thing for the government to make land available,” Theodos said. “It’s another thing for the government to add a subsidy because there’s a lot of things they could be prioritizing.”

As for new cities, Wolf said it would require a developer willing to take the risk, saying there may be someone out there willing to do it. Theodos thinks it would be difficult to create a city out of whole cloth.

“Cities are dense, organic, economic nodes,” Theodos said. “They are not just asphalt, concrete, bricks and wood. There needs to be an economic engine or a driver for a city to exist.”