Selling federally owned land to private housing developers may help ease inventory shortages in certain areas — but it’s unlikely to solve the nation’s broader housing crisis, according to a new report from Realtor.com.
The report estimates that nearly 10 million acres of land would be needed to build 3.8 million homes — the number required to ease inventory shortages. But the potential impact of federal land holdings is limited by geography.
Most of these lands are located in the western U.S. and Alaska, far from the population centers that are experiencing the most severe shortages, according to the report.
“(The housing shortfall) has built up over more than a decade and continues to push home prices out of reach for many Americans,” Realtor.com chief economist Danielle Hale said in a statement. “Opening up federal land for housing development may generate incremental supply in parts of the West, but it’s not a silver bullet.
“The most severe shortages exist in places like the Northeast, where developable federal land is virtually nonexistent. As a result, we’ve also got to make better use of the land we already have. That will require meaningful changes to zoning and land use policies to alleviate the housing affordability crisis, especially in high-demand markets.”
Density and location are keys
Roughly 640 million acres — or nearly one-quarter of all land in the U.S. — is federally owned and managed by agencies such as the Bureau of Land Management (BLM).
States like Nevada, Arizona and Montana contain large federal land holdings. But many of these areas either already have sufficient housing, or lack the infrastructure and economic activity needed to support major residential development, Realtor.com said.
In contrast, the most pressing shortages are found in places like the Northeast, which faces an estimated deficit of 830,000 homes but has little to no available federal land to support new construction.
The report emphasizes that how land is used — not just how much is available — plays a critical role in addressing the housing gap.
Development density can dramatically alter how many homes can be built on a given plot of land.
At Manhattan, New York’s, density of 61 housing units per acre, a 90-acre parcel could support more than 5,000 homes. In comparison, at the current average density in Clark County, Nevada — one home per five acres — that same land would yield only about 20 homes.
To construct 3.8 million homes, the report says between 4 million and 31 million acres would be needed, depending on how densely the housing is built.
Building at the median U.S. county density — where half of Americans live in denser areas and half in less dense areas — would require close to 10 million acres.
Local reform seen as crucial
Some success has come from selling small, strategically located federal parcels, which has occurred at recent BLM auctions in Las Vegas. But the report stresses that piecemeal solutions will not solve a nationwide crisis.
“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 said.
“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.”
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