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Just because land is vacant doesn't mean it makes economic sense to build on it. The idea of turning ... More lots of vacant federal land over to housing should be explored, but it might not be very realistic.
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Did you hear that sound? It was my eyes rolling about Homesteading 2.0, a Trump administration initiative to sell off or somehow turn 800 square miles of federally owned land into housing. The homesteading reference is to Homesteading Act of 1862, signed into law by Abraham Lincoln. Why am I skeptical? Well, I’m skeptical of almost any “solution” to housing that promises big results. I’ve been at this long enough to know that almost every solution is weighted down with ideology, lack of consideration of the interplay of regulation and economics, or both. I’ll go back to my necessary and sufficient test. Is land necessary for more housing? Yes. Is it sufficient? Of course not. Let’s take a high level look at the idea of federally owned land for housing.
Details of the proposal sound Brobdingnagian; according to the American Enterprise Institute (AEI), by selling off Bureau of Land Management land, “the West could build 3 million new homes, closing the housing supply gap and restoring housing affordability and economic vitality for generations to come.” This is where we run into what I call the “scale problem.” What does 850 square miles look like. Let’s go all Harper’s Index here for a bit.
Let’s start with the smallest state in the country, Rhode Island. It is 1,214 square miles. Wow. That’s huge, isn’t it? But it takes 45 minutes to drive across the state. Let’s think of it another way. Many single-family lots are about 5,000 square feet. There are 23,696,640,000 square feet in 850 thousand square miles and that 4,739,328 lots measuring roughly 5,000 square feet.
There are, according to the Saint Louis Federal bank, about 90,837 local governments in the United States. If we guess that the 850 square miles are in the western half of the country, and we just divide that number in half, we’re talking about 45,000 building and land use codes that would apply in those 850 thousand square miles.
According to the National Association of Homebuilders, it takes about 10 months to build a single-family home. According to the Association, “homes ranging from 1,200 to 3,999 sq. ft. are built at the average building time, typically around 10 months. As the size increases beyond 4,000 sq. ft., there is a noticeable upward trend in completion times. Homes with 4,000-4,999 sq. ft. take about 12 months, while those between 5,000- 5,999 sq. ft. extend to a little more than 14 months. Homes over 6,000 sq. ft. take the longest to build, requiring almost 18 months from permit to finish.”
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