Republicans have proposed selling off millions of acres of public land in an effort to tackle the U.S. housing supply shortage—but experts say the move would offer only limited benefits.
The U.S. is facing a massive supply gap of nearly 4 million homes—a persistent deficit that has pushed prices ever higher and made homeownership unaffordable for a growing number of Americans.
On the campaign trail a year ago, then-presidential candidate Donald Trump pledged to rectify the situation by opening up large tracts of federal land for housing construction.
This sping, Utah Sen. Mike Lee, a Republican, put forward a controversial plan to make more than 250 million acres of federal land across 11 Western states eligible for sale.
The idea was to offload 2 million to 3 million of those acres—and it even made it into President Trump’s One Big Beautiful Bill—his flagship trillion-dollar tax and spending package.
But before the sweeping legislation was passed by the House in early July, Lee was forced to remove the land sale provision from the legislation after it was found to have violated budget reconciliation rules.
(Realtor.com)
In theory, selling millions of acres of public land for housing development could help narrow the supply gap. However, according to Realtor.com® senior economic research analyst Hannah Jones, in practice, the impact would be minimal at best because of geographic constraints.
Here’s the issue: The vast majority of federally managed land, especially that overseen by the Bureau of Land Management, is located in sparsely populated areas like Alaska and the West, where housing markets are not overwhelmed with demand.
On the other hand, the densely populated Northeast, where the housing shortage is felt acutely, has little public land that could be sold to ease the crunch.
“In short, while releasing federal land could offer incremental gains in housing supply in select Western metros, it is not a comprehensive solution to the national housing crisis,” Jones explains in the Federal Land Report from Realtor.com. “Targeted reforms that address land use, zoning, and construction capacity in high-demand regions will be equally, if not more, essential to closing the housing gap.”
U.S. government’s land holdings
The federal government owns about a quarter of all land in the U.S., which amounts to some 640 million acres.
A handful of federal agencies manage the public lands, led by the BLM, which is charged with overseeing roughly 240 million acres.
Alaska has the biggest share of BLM-managed federal land, totalling 70 million acres, followed by Nevada, with 48 million acres.
Much of the rest of the public land is scattered around Utah, Wyoming, New Mexico, California, Arizona, and Colorado. There are virtually no BLM-managed lands east of the Mississippi River.
(Realtor.com)
At first glance, the vast federal land holdings might seem like the key to the nation’s pervasive housing shortage, but it is important to keep in mind that much of this land is isolated, not easy to build on, and lacks both infrastructure and job opportunities, which are crucial to community development.
“Building homes in remote, disconnected areas does not offer much in the way of usable housing inventory in the short term,” notes Jones.
Selling federal land for development is only the first step. Next, it would be necessary to determine how densely to build homes on this land.
At New York City’s highest-density level, 61 housing units could be built on 1 acre of land.
Taking Chicago as an example of a mid-density area, where four homes could be constructed on an acre of land.
At the low-density side of the spectrum, with Las Vegas as an example, a single housing unit could be built per 5 acres of land.
The typical American lives in a county with a density of 1 home per 2.5 acres. At this rate, it would take 10 million acres of land to build 4 million homes.
How to fix the Northeast
Overall, only about 10% of the 900 metropolitan and micropolitan areas—urban centers of 10,000 to 49,999 people—across 30 states contain BLM-managed public land, but practically none in the Northeast, where the housing shortage is most critical and home prices are skyrocketing due to surging demand.
Among the four U.S. regions, the Northeast saw the smallest annual housing inventory increase of just 17.6% in June, according to the latest available monthly housing trends update from Realtor.com.
Compared with pre-pandemic norms, the housing supply in the Northeast last month was less than half that in 2019, even as inventories in the West and South have fully recovered, at least in part thanks to recent construction booms.
So how can the sale of public lands alleviate the housing crunch in high-priced, densely populated areas like New York City, Boston, and Philadelphia?
One thing to keep in mind is that only a small share of U.S. metros have BLM-managed lands within their borders, and virtually none in the hardest-hit Northeast.
“When estimating how many homes can be built in a given land area, it is important to consider not just homes alone, but also the infrastructure and amenities necessary for new residents to thrive,” explains Jones.
According to the analyst, simply selling public lands for development in the West would not directly boost inventory in the East—but it could serve as a starting point.
“A broad increase in housing supply in lower-cost, land-rich regions could eventually help redistribute population pressure,” says Jones.
But to persuade large numbers of people to move from densely populated, pricey areas in the Northeast to more affordable parts of the West and South boasting higher inventory levels, a major shift in the U.S. labor market has to take place, namely, expanding remote work flexibility and investing in the infrastructure of remote areas.
To address the problems of housing availability and affordability on a national scale, simply selling parcels of public land is not enough, contends Jones.
A constellation of creative solutions will be required to fix the national housing crisis, including policy reforms, zoning changes, transit development, incentives for multiunit housing, and federal support of infrastructure to make land usable.