Public land is not a silver bullet for the housing shortage

President Trump recently proposed opening federal public lands for housing development in response to the growing housing shortage in the United States. At first glance, opening up land to increase housing supply may seem like a practical solution, as more land should equal more space for building housing. However, addressing the crisis requires more than simply increasing the amount of available land. It demands policies that allow markets to coordinate a location-based approach, aligning housing development with demand, labor markets, infrastructure capacity, and community needs.

According to Freddie Mac, the U.S. needs to build approximately 3.7 million housing units to meet current demand. The National Low Income Housing Coalition reports an even more severe deficit of over seven million affordable units for extremely low-income renters. However, as the numbers illustrate the scale of the problem, solutions must take into account not only how much is built but also where new housing is located.

Only about 7.3% of federally owned land is located near high-demand urban areas where access to jobs, transportation, and services is concentrated. Most public land is geographically remote and lacks the infrastructure, such as roads, sewers, and utilities, needed to support housing development. Without these foundational elements, these parcels are not immediately viable for residential construction and may require significant public investment to become feasible. The inability to move the land into the market and to provide long-term public benefit assessments makes it difficult to ensure that the land would be any better used than it currently is, especially if it is not located near urban areas where demand and infrastructure already exist, or that the transfer would effectively address the housing crisis.

Meanwhile, legislative proposals such as Senator Mike Lee’s Helping Open Underutilized Space to Ensure Shelter (HOUSES Act) raise important questions about how public land is allocated and whether these transfers serve broader housing goals. The Act would allow federal land to be sold to states at below-market rates, with minimal federal oversight. While the land would remain government-owned, now by the states, there is no requirement that it be developed at all, let alone for housing. Without mechanisms to ensure that transferred land is brought into the market where housing is needed or used efficiently in high-demand regions, it is unclear whether such transfers would represent a meaningful improvement over the status quo or contribute to alleviating the housing shortage.

Worse, these transfers could promote land banking or speculative holding by local governments, especially if there is no urgency or incentive to develop. They may also reduce public accountability by transferring oversight to state-level institutions without clear guidelines. In regions with inadequate infrastructure or immediate housing demands, this strategy risks creating bureaucratic inefficiencies instead of producing real results.

Rather than pursuing large-scale transfers of remote public lands, a more promising strategy is to focus on well-located opportunities already within reach. The Lincoln Institute of Land Policy has identified Florida, Massachusetts, Washington, Texas, and California—states with both high housing demand and substantial amounts of developable public land—as areas of opportunity. If these parcels were developed at a low density of seven units per acre, they could yield approximately 1.9 million new housing units. At a higher density of 25 units per acre, that number increases to 6.9 million units.

Of course, enabling more housing also means confronting the rising costs of construction. Tariffs on imported materials—including lumber, drywall, and appliances—have added between $7,500 and $10,000 to the cost of building a single-family home, with lumber alone accounting for nearly $5,000 of that increase. These figures could increase if the Trump administration ends up moving forward with high tariffs as promised.

The increased costs from tariffs are passed on to consumers, pushing homes further out of reach for middle- and lower-income buyers. Although the administration has announced plans to expand domestic manufacturing of construction materials, these efforts will take years to materialize, if they materialize at all. Currently, high costs continue to restrict the production of affordable housing at the necessary scale.

Proponents of using federal land for housing sometimes argue that these lands offer a workaround to local zoning barriers. A 2024 task force co-chaired by Utah Governor Spencer Cox noted that federal lands are not subject to local zoning and permitting processes, making them attractive sites for expedited development. And if federal lands were simply transferred from federal to state ownership, zoning rules might then apply. Cox’s argument highlights the challenges of municipal-level obstruction, but it does not address the root issue: restrictive local land-use policies that constrain housing supply in urban areas.

A more effective long-term solution involves reforming local zoning laws and streamlining the permitting process rather than bypassing local governance altogether. Coordinating efforts among federal, state, and local authorities to promote infill housing, accessory dwelling units (ADUs), and mixed-use development near transit hubs and job centers would be more beneficial for improving housing access than prioritizing undeveloped remote lands.

A targeted, flexible approach

One way to effectively address the housing crisis is for policymakers to prioritize the following actions:

1. Expedite infill development in areas that already have existing infrastructure.

2. Roll back exclusionary zoning and outdated land use restrictions that restrict the supply of housing.

3. Allow development by right for conforming projects, speed up permitting processes, and minimize development fees.

4. Adapt underutilized commercial properties and buildings for residential use.

5. Support partnerships with churches, nonprofits, and other mission-driven landowners to create new housing opportunities in urban and transit-accessible areas.

As policymakers explore strategies to expand the housing supply, it’s important to consider not just how much land is available but also where it is, whether it can be developed affordably, and how its use aligns with long-term public priorities. Rather than treating land as the missing ingredient, the real opportunity lies in removing the barriers that prevent us from building housing where people need it most.

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Source: https://reason.org/commentary/public-land-is-not-a-silver-bullet-for-the-housing-shortage/