A Washington, D.C., based right leaning think tank says the sale of a minuscule portion of the land owned by the federal government could result in the construction of more than three million houses across several Western states. But it would take more than four decades to do so.
The Bureau of Land Management (BLM) holds 267,000 square miles of land in the lower 48 states, according to the American Enterprise Institute. If it sold just 850 of those miles – less than 1% of its holdings –1.5 million new houses would be built near existing cities in Nevada, Arizona, New Mexico, California, Oregon and several other states over a 10 to 20-year period.
The sale would also yield another 1.5 million new houses in new cities over a 40 to 50-year build out, AEI projects. It labels these places “Freedom Cities.”
Selling and leasing government land is part of the Trump Administration’s initiative to spur the housing market. And AEI’s Housing Center co-chair Edward Pinto believes the BLM could play a pivotal role, even by selling just a tiny portion of its holdings.
The sale of the aforementioned 850 square miles to the private sector would generate some $100 billion in proceeds to the U.S. Treasury over 10 years, Pinto claims.
The economist labels the White House home building efforts as “Homesteading 2.0,” and says they have the “potential” to be one of the biggest federal housing programs since President Lincoln’s Homesteading Act of 1862.
As he sees it, the land management agency has a mandate to promote “thoughtful development in the right places.” And the law, he says, authorizes the Secretary of the Interior to auction off land directly to the private sector when disposal will serve public objectives, including expanding communities and economic development.
In one initiative, Homesteading 2.0 would cover 250 square miles of ground within existing city limits or within 10 miles of their current borders. The land would be sold to developers for subdivisions totaling 1.5 million lots. Half the land would be auctioned by lottery, with the winners credited with a protected, tax-free raw lot acquisition benefit.
In another proposal, 600 square miles would be sold to developers for the creating of 20 new cities that would yield 100,000 homes upon build out. Each of these Freedom Cities would average 30 square miles, but the houses would be sited on just 40% of the city’s land.
Most of the land BML holds is in the lower 48 states. But those in the west are among the nation’s fastest growing, yet the least affordable, Pinto points out. If developers were required to reduce lot sizes by half and increase production of townhouses, he contends the land would yield 131% more units with 17% lower prices.
Not only does the AEI have outsized ambitions, it also thinks its ideas can get off the ground quickly. Pinto believes it is feasible for Homesteading 2.0 to be “well underway” by July 4, 2026.
