Key takeaways

  • Federal land could be a safety valve to ensure access to housing in western states.
  • With a few important adjustments, the HOUSES Act can be part of a broader package of pro-housing reforms with broad transpartisan appeal.
  • The HOUSES Act, as written, leaves room for improvement to ensure communities are serious about increasing housing supply before transferring federal lands to them.

The United States owns a lot of land within the United States. But the federal government’s vast land holdings are not evenly distributed around the several states. Because homesteading was historically less attractive in the West, the federal government relinquished less real estate there, and it still owns 47 percent of the land in the region. 

America’s western states– California in particular–are in the midst of a severe housing shortage. This makes it difficult for individuals and families to maintain their standards of living, or to relocate to areas with more economic opportunity.

Congress is trying to address the problem, with most proposals focusing on building more housing in already-developed areas and on encouraging more infill growth around existing infrastructure like transit. However, there is one proposal that takes a different approach.

Federal land for housing

Senator Mike Lee’s (R-UT) HOUSES Act makes federal land available for housing development. Federal land ownership can provide natural areas close to population centers but can also burden residents struggling with housing scarcity and affordability by restricting developable areas. The proposal offers a framework for states and cities to purchase adjacent federal lands for housing construction, with protections for important historic, environmental, and recreational sites. 

The Bureau of Land Management is the largest landholder among federal agencies, followed by the U.S. Forest Service. While vast tracts of land are preserved as national parks or monuments and thus off limits to development, much more federal land is not preserved and is open to resource extraction like oil drilling and logging. This nonpreserved land is where Lee sees an opportunity to mitigate the housing crisis.

His bill would have the federal government offer to sell land for local housing development. This would be most effective in areas where un-utilized Bureau of Land Management parcels are within or directly adjacent to growing cities. Under the HOUSES Act, states and local governments could petition the Department of the Interior to purchase federal land from the relevant agency and use it for housing development (page 21).

A report accompanying the bill from Republican staff in the Joint Economic Committee estimates the policy could alleviate 14 percent of America’s housing shortage by transferring 0.1 percent of federal land to local control. The report is realistic in its assessment: 99.9 percent of federally owned land is too far from jobs, infrastructure, or potable water to be desirable for habitation. But even just a fraction of federal land could potentially accommodate the demand for up to several million homes in the West. 

The proposed development mechanism does not mandate or force development into undesirable locations. The policy would merely allow the disposal of idle federal land where states, localities, and market actors together expect housing development to be marketable and desirable. The legislation recognizes parks, national monuments, and other pristine areas as off-limits from development, so you wouldn’t see new suburbs pop up in Joshua Tree or the Everglades. Proceeds from land sales would fund improvements to national parks.

Once transferred to state or local authority, the land would have to be used for residential development, with any nonresidential uses limited to what was needed to support the new residential development. Additionally, developed land would have to offer at least four homes per acre under the policy, close to the average compactness for all new housing. 

What are the pros and cons?

Benefits: Making unneeded federal land available for housing is valuable. This policy is consistent with an all-of-the-above, pro-housing abundance agenda and contains reasonable guardrails to protect sensitive or special lands from development. 

Drawbacks: The bill misses an opportunity to encourage local governments to undertake needed, pro-housing reforms on lands they already control. The bill grants the Secretary of the Interior the authority to evaluate proposals for transfers to states or local governments. However, as written, it prohibits the Secretary from preferring transfers to communities that enact local reforms like allowing denser housing or improving transportation infrastructure to support growth. The bill also allows local governments to impose relatively low densities on disposed land with measures including a quarter-acre lot size minimum, single-family zoning, and bans on “gentle density” like accessory dwelling units and duplexes.

Suggested Improvements: The bill’s authors could require communities that receive federal lands to increase their by-right zoned capacity by a certain percentage before purchasing federal lands under the act. This modest reform would allow communities to plan for growth on their own terms without an overly prescriptive, top-down mandate on how to do it. There is a temptation to let the perfect be the enemy of the good in this area, but letting communities choose how they want to grow in exchange for denser zoning seems like a fair tradeoff to ensure transfers of federal lands are leveraged for additional housing growth. Another possible improvement could be allowing manufactured homes on transferred land. Manufactured homes, also called HUD Code homes, are unfairly excluded from many communities, but  have a place in the list of solutions to the national housing shortage. 

The drafters should also ensure the same excesses of local land use regulations aren’t simply repeated on federal lands after transfer to local control by allowing property owners to build townhouses, duplexes, and ADUs by right. That should be seen not as a federal mandate, but as a recognition of the federal government’s duty to leverage its bargaining position to ensure ceded land makes a meaningful difference in the housing crisis.

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