COMMENTARY: Homesteading 2.0

The Western Governors’ Association met in Las Vegas last week and has a once in a lifetime opportunity to solve the housing crisis facing the western third of the nation.

The federal government owns 47 percent of all the land area of 10 states (Nevada, Utah, Idaho, Oregon, Wyoming, California, Arizona, Colorado, New Mexico and Montana). The Bureau of Land Management manages undesignated federal land totaling 24 percent of all the land area of these same 10 states. It does not include reservations, national parks or other landmarks.

The incoming Trump administration has signaled an openness to building on federal land. North Dakota’s Doug Burgum, Mr. Trump’s secretary of interior designate, was the 2020 chair of the Western Governors’ Association. Trump 2.0 opens the door to Homesteading 2.0.

The nationwide housing shortage is currently 4.5 million homes. This has driven housing prices skyward, a problem particularly acute in Clark County, where home prices have tripled since 2012, outpacing wage growth by 600 percent. This has led to its shortage of 78,000 affordable homes, which is in large part driven by pressure from people fleeing California for relatively affordable housing near Las Vegas. While Nevadans feel the effects of rising home prices, the state remains a relative bargain for San Franciscans, who buy newer, larger homes for half the price of their original homes.

Sale of a minuscule 0.3 percent (about 800 square miles) of BLM land would be enough for about 3 million to 4 million single-family detached and townhomes. Yet, since 1976 the BLM has shown little willingness to use its authority to sell land for the expansion of communities and economic development. Given the current crisis, the BLM must change its approach.

In more concrete terms, preliminary estimates by the American Enterprise Institute for the Las Vegas metro area indicate developable BLM land within two miles of any city limits totals 180,000 acres and that 1.4 million homes could be built at eight homes per acre. This constitutes about 9 percent of all the land the BLM manages in the metro area. This would help ensure the future economic vitality of the Las Vegas metro area, which currently has a population of 2.33 million, having grown by about 1 million since 2000.

Because Southern Nevada has been one of the nation’s leaders in water conservation, it is well-prepared to accommodate this population growth. While growing by 50 percent (780,000 people) since 2002 Southern Nevada has reduced both its per-capita and total water use since that time. New developments must continue to adhere to the region’s successful conservation and reuse standards. Southern California is helping, having saved more than 1.2 million acre-feet of water of Colorado River water in just two years, potentially raising Lake Mead’s water levels an estimated 16 feet.

This principle — building single-family homes on BLM land within two miles of a city — would ensure the future economic vitality of the 10 Western states noted earlier and make the entire nation stronger. The estimates also include only feasibly buildable BLM land, not steep land or water.

There is also the opportunity to develop “freedom cities” — an idea that Mr. Trump supports — on larger parcels of BLM land away from current cities.

Of course, the sale of BLM land alone cannot solve all the housing problems in Nevada or the western United States. Housing must follow the “housing success sequence” to be built — making housing simple, legal and naturally affordable by clearing away regulatory barriers. The opportunity is here for the taking, and Mr. Burgum, if confirmed, has signaled a willingness to pursue innovative housing solutions.

The sale of BLM land is the rare opportunity that makes everybody better off. The federal government could potentially generate $100 billion from land sales over 10 years. Governors, legislators and public officials throughout the West would see billions of dollars of revenue from taxes on construction, permits and property. Builders and developers would profit from selling homes. The Trump administration could claim victory on one of the largest domestic policy concerns of the day.

The greatest beneficiaries would be homebuyers. Building more housing is the only way to ensure homeownership remains affordable for the next generation of Americans. First-time homebuyers have become increasingly over-leveraged in the past decade, and the Las Vegas metro is one of the least affordable in the country. Even NIMBYs would be reassured that their children and grandchildren could find attainable housing.

Western governors must work with the federal government for a sensible housing policy that can usher in housing abundance and prosperity for their states and nation.

Edward Pinto is a senior fellow and co-director of the American Enterprise Institute’s Housing Center. Arthur Gailes is the center’s senior manager for housing supply solutions. They write from Washington, D.C.