According to Realtor.com chief economist Danielle Hale, the housing shortfall has been accumulating for over a decade, making home prices unattainable for many Americans. Opening up federal land for housing development in parts of the West may help increase supply, but it is not a complete solution.
Hale emphasizes that the most severe shortages are in regions like the Northeast, where federal land available for development is scarce. To address the housing affordability crisis, significant changes to zoning and land use policies are necessary, especially in high-demand markets.
Density and location are keys
About 640 million acres of land in the U.S. is federally owned and managed by agencies like the Bureau of Land Management (BLM). States with large federal land holdings, such as Nevada, Arizona, and Montana, may not necessarily have the infrastructure or economic activity to support substantial residential development.
In contrast, the Northeast faces a significant housing deficit with no available federal land for new construction. The report highlights that not just the availability but also the utilization of land plays a crucial role in bridging the housing gap.
Development density can greatly impact the number of homes that can be built on a specific piece of land. For example, Manhattan’s density allows for over 5,000 homes on a 90-acre parcel, while Clark County, Nevada’s current average density would only yield about 20 homes on the same land.
To build 3.8 million homes, the report estimates a need for between 4 million and 31 million acres, depending on the density of housing. Building at the median U.S. county density would require close to 10 million acres.
Local reform seen as crucial
While selling small federal parcels strategically has shown some success, the report underscores that fragmented solutions will not address the nationwide housing crisis effectively.
Hale suggests that while freeing up federal lands for housing is part of the solution, aligning supply with demand requires local reforms such as easing zoning restrictions, promoting missing-middle housing, and investing in infrastructure and transit to unlock land close to essential amenities.