While the Trump administration touts the prospect of unlocking federal land for housing development, a new Realtor.com® analysis suggests it won’t be enough to meet buyer demand and has serious limitations.
Realtor.com’s research found that addressing the estimated 3.8 million home shortage in the U.S. would require developing between 4 million and 31 million acres of land, depending on housing density. At the median county density, the country would need to develop nearly 10 million acres to close the housing gap, the real estate search platform found.
“The U.S. faces an estimated shortage of 3.8 million homes, which is a shortfall that has built up over more than a decade and continues to push home prices out of reach for many Americans,” said Danielle Hale, chief economist with Realtor.com. “Opening up federal land for housing development may generate incremental supply in parts of the West, but it’s not a silver bullet.”
In March, the Trump administration launched the Joint Task Force of Federal Land for Housing, a collaboration between the Department of Housing and Urban Development (HUD) and the Department of the Interior.
HUD Secretary Scott Turner and Interior Secretary Doug Burgum announced plans to identify “underutilized federal lands suitable for residential development” and streamline land transfer processes to states and localities.
“Streamlining the regulatory process is a cornerstone of this partnership,” Turner and Burgum said when the joint task force was announced. “Historically, building on federal land is a nightmare of red tape—lengthy environmental reviews, complex transfer protocols and disjointed agency priorities. This partnership will cut through the bureaucracy.”
A plan to sell around 2 million acres of federal land was originally included in the recently passed Republican megabill, but was pulled after push back and a decision that the proposal would violate Senate rules.
The federal government owns roughly 640 million acres—nearly 25%—of all land in the U.S., with the bulk of it in the West and Alaska, Realtor.com research found. Meanwhile, the Northeast faces a housing inventory shortage of 830,000 homes but contains virtually no federal land available for development, the study noted.
“The most severe shortages exist in places like the Northeast, where developable federal land is virtually nonexistent,” Hale explained. “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.”
Some lawmakers are piggybacking on the Trump administration’s proposal to use public lands for housing development. Senator Mike Lee’s (R-Utah) HOUSES Act, for instance, would allow local governments to nominate national public lands for below-market purchase with residential development plans.
But critics argue that Lee’s proposal wouldn’t lead to affordable housing developments for the people who need it most.
Headwaters Economics, a Montana-based nonprofit research firm that focuses on land use, found only around 2% of 181 million acres of federal land it analyzed would be viable for housing development—and even those face significant risk of wildfires and flooding.
“Whether there is a real opportunity to improve housing affordability by building homes on these lands depends on a host of local factors,” the analysis concluded. “Essential considerations include whether there is enough water to support new development, builders willing to develop housing at affordable price points, and a labor force to construct new housing. In many communities with unmet housing needs, a lack of available land is not actually the barrier.”
Realtor.com’s analysis shows that at Manhattan’s current housing density (61 units per acre), just 90 acres could yield more than 5,000 homes. However, at the average density in Las Vegas’ Clark County (one unit per five acres), those same 90 acres would only yield 20 new homes.
“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.”
Beyond land availability, there are other drawbacks to using federal lands for new development, with safety being chief among them.
More than half (58%) of the federal land near communities with housing demand are in areas that face high wildfire risk, according to the same study from Headwaters Economics. Realistically, that only leaves about 1 million acres available for safe development, the firm said, and many of these places also face severe flooding and drought risks.
“We estimate fewer than 700,000 new homes could be built on the suite of federal lands that are near Western towns and cities with unmet housing needs,” Headwaters Economics said in its report. “The potential is concentrated in just a handful of states: Nevada, Arizona, California, New Mexico and Utah.”
Editor’s note: this story was updated on July 30 to clarify references to the Headwaters Economics study.
