If the US Congress authorizes the sale of federal public lands in the upcoming budget reconciliation bill, then the decision could irreversibly affect the US public land estate—and not solve housing affordability problems as some advocates claim.
The US House of Representatives passed a budget resolution on April 10 by the narrow margin of 216–214 and along party lines. With passage of the Senate bill in the prior week, Congress now officially can work on budget reconciliation legislation. Some news accounts have reported that sales of federal public lands will be included in such a bill to generate revenues that will allow for an extension of the tax cuts in the 2017 Tax Cuts and Jobs Act, which are set to expire at the end of this year. Federal land sales also have been proposed as a way to address housing affordability challenges in the western United States. The legality of federal land sales as part of budget reconciliation is in question, and the long-term implications of including such a clause could be wide ranging and irreversible.
Sell-offs of federal lands, and transfers of federal lands to states, have been on the wish list of some Republican members of Congress and state and local officials in some Western states for years. The state of Utah is often front and center. It filed a lawsuit in 2024 requesting to transfer 18.5 million acres of federal land within its borders to the state. In January 2025, the Supreme Court refused to hear the case. Senator Mike Lee (R-UT), who now is chair of the Senate Committee on Energy and Natural Resources, has long been one of the most ardent proponents of federal land sales and transfers. In the previous Congress, Senator Lee introduced the Helping Open Underutilized Space to Ensure Shelter (HOUSES) Act of 2022, which would have allowed state or local governments to nominate federal public lands for sale (except those in certain protected categories) for residential development. This latest effort by Senator Lee to leverage the housing affordability crisis as a motivating factor for federal land sales also was espoused by Secretary of Housing and Urban Development Scott Turner and Interior Secretary Doug Burgum in a recent Wall Street Journal op-ed. The two agencies have established a task force on the issue.
In this If/Then blog post, we address two questions related to federal land sales. First, can Congress include federal land sales in the budget reconciliation bill? Would such an inclusion be legal under the budget reconciliation process, and how does it square with other laws? Second, would selling federal lands alleviate problems with housing affordability in Western cities and towns? We conclude with our concerns about the slippery slope of large-scale federal land sales, which would be a departure from current policy that could bring about irreversible changes to the US public land estate.
Before Reconciliation: Understanding Current Laws for Managing Public Lands
The federal government owns and manages 640 million acres of land, which represents 28 percent of the country’s land area and more than 50 percent of the land in the 13 Western states. The Bureau of Land Management (BLM) has the largest holdings, at 244 million acres. BLM lands often are described as the “leftover lands” after settlement of the United States led to most lands being given away to homesteaders, railroads, timber companies, and states.
We focus our attention here on BLM lands, as these are the only federal lands likely to be offered for sale. Other agencies, such as the National Park Service and the US Fish and Wildlife Service, have missions of conservation and preservation; land sales would require major changes to existing legislation (and would spark significant public opposition). The US Forest Service, like the BLM, has a multiple-use mandate (laid out in the Multiple-Use Sustained-Yield Act of 1960) but less broad authority to sell land compared to the BLM and has sold or transferred very little acreage over the years.
Credit: Andrey Bayda / Shutterstock
The Federal Land Policy and Management Act of 1976 (FLPMA) established the multiple-use management policy for BLM lands, which still is followed today. The law also repealed homesteading and essentially ended the practice of the widespread and large transfer of federal lands, stating that BLM lands are to be retained in federal ownership except under special circumstances. The law allows federal land to be sold if (a) the tract is difficult and uneconomic for the BLM to manage; (b) the tract is no longer needed for the purpose under which it was acquired, or for any other federal purpose; or (c) disposal of the tract will serve important national interests. FLPMA also authorizes the BLM to exchange federal lands for nonfederal lands under certain conditions.
Since 1976, the disposal of federal land (i.e., sales and transfers) has been limited, and those instances have been targeted and carried out under carefully designed resource-management plans, which the BLM is required to do under FLPMA. Furthermore, land disposals typically have been offset by land additions, often in exchanges with states and other entities. In the 10-year period between 2014 and 2023, 1.08 million acres of land were sold or transferred and 291,400 acres acquired for a net decline of about 800,000 acres in BLM land holdings, a mere 0.3 percent of total BLM land. (The HOUSES Act would have amended FLPMA, adding language to allow state and local government nominations of tracts for sale.)
The Federal Land Transaction Facilitation Act, which was signed into law in 2000 (and reauthorized in 2018) also is relevant. It requires revenues from the sale or exchange of BLM lands to be deposited into a Federal Land Disposal Account rather than a general Treasury account and used only for purchasing other lands (or easements) with high conservation or recreation value.
Our expertise lies in the economics (and not the legal side) of public lands, but our understanding is that strategies are possible for the reconciliation bill to include public land sales if the provision focuses only on raising revenue. Provisions in reconciliation bills that are considered “extraneous” are not allowed and can be blocked under the so-called Byrd Rule. What counts as extraneous is open to interpretation, but if the change in spending or revenue from the provision is incidental to its non-budgetary effects, then the Byrd Rule could be invoked. Thus, any requirements about housing affordability that may be included in a provision for selling federal lands could be interpreted as a violation of the Byrd Rule. But if the language focuses only on revenue raising, a provision may be allowed. The Federal Land Transaction Facilitation Act likely wouldn’t be a hurdle, as Congress simply could state in the reconciliation language how to handle proceeds from federal land sales.
Would Federal Land Sales Improve Housing Affordability?
To address the question of whether BLM lands could offer an opportunity to address housing affordability in the West, we selected 20 cities and towns and pulled together the following statistics: The amount of land area that’s owned by the BLM within a 10-mile buffer of the boundaries of the city/town (we used Census place to define our boundaries) and the amount of currently undeveloped land that could be developed (i.e., is not under protected status) within the same 10-mile buffer. We also used Census data to calculate the ratio of assessed property values to median household incomes, which enabled us to measure housing affordability for each of these 20 places. The 20 places we selected (Figure 1, which also shows the buffers) include most of the major cities in Western states in the continental United States and a handful of midsize cities and towns that have high house prices.
Figure 1. Map of the 20 Western US Cities and Towns (with 10-Mile Buffer Around Each) in Our Analysis
Blue area indicates city buffers, and green area shows public land owned by the Bureau of Land Management.
What did we find? First, in 15 of the 20 places we analyzed, less than 5 percent of the land area in the 10-mile buffers comprised BLM lands. In 9 places, the buffer had less than 1 percent BLM land, and 4 cities—San Francisco, Denver, Seattle, and Flagstaff—had no BLM land at all (Figure 2). An outlier is St. George, Utah, with 58 percent of its 10-mile buffer comprising BLM lands.
Figure 2. Percent of Land Held by the Bureau of Land Management in 10-Mile Buffer Around City or Town
Second, the places with the most expensive housing generally have the least amount of BLM land nearby. This finding is shown clearly in Figure 2, which orders the cities/towns from least to most affordable and groups them into three categories: least affordable, which have ratios of house value to income that are greater than 8; a middle category, with house value-to-income ratios of 6 to 7; and most affordable, which have ratios that range from 4 to 5. Almost all these cities and towns have relatively high house value-to-income ratios. Historically in the United States, ratios have been on the order of 2.5 to 4, and most of these places have ratios above that range (many dramatically above).
Third, many areas have substantial amounts of unprotected, open land in the 10-mile buffer that could be developed for residential use. Unprotected, open lands are lands that, as of 2023, were not legally protected from development; not already developed; and not wetland, open water, or perennial ice/snow (Figure 3, which shows the cities/towns in the same order as Figure 2, from least to most affordable housing).
Figure 3. Area of Developable Land (Unprotected, Open Space) in 10-Mile Buffer
Many of these 20 places have hundreds of square miles of unprotected, open land nearby, with more than 500 square miles in the Denver and Phoenix areas. The Los Angeles metropolitan area, which has some of the worst housing affordability problems in the West, has more than 140 times more unprotected, open land within 10 miles than BLM land. One square mile is equivalent to 640 acres; even if houses were built on one-acre lots, most of these places already have enough land available to build tens of thousands of houses—even hundreds of thousands in some cases. Los Angeles has enough unprotected land to build 140,000 single-family homes, compared to less than 1,000 homes that could be built on BLM land. We are not suggesting that construction of single-family homes on nonfederal, unprotected, open land in outlying buffers of cities and towns is the right solution to the housing affordability problem; that’s up to local planning and zoning officials and market forces. Our point is that using federal land for this purpose is unnecessary given the vast swaths of currently available land.
Plus, making federal lands available for development would not necessarily lead to increased housing stock. Most federal land would lack infrastructure such as roads and water and sewer lines, making development less feasible than on many other lands.
In addition, many of these BLM areas are rangelands, which have high wildfire risk. According to the BLM, 54 percent of wildfire acres burned in the continental United States have occurred on rangelands. And for the cities with the most federal land, such as Las Vegas, the land is arid and lacks water resources.
What’s more, land availability is not the driving factor in high housing costs. Many researchers have concluded that an array of regulations that restrict housing supply are at play. These factors include bans on multifamily dwellings, rules for minimum lot sizes, height restrictions, urban growth boundaries, restrictions on infill development, and much more. Most empirical studies have found a positive correlation between housing regulation and median house values.
A Slippery Slope for Public Lands?
It is unclear at this point exactly how federal lands would be sold if this option is included in the budget reconciliation bill. Whether nominations of land would be made by states and localities, as in the HOUSES Act, or tracts selected by Congress or the BLM, is still to be determined. But one thing is clear: selling public lands to raise revenue for deficit-reduction purposes would represent a major change in modern public land policy.
The days of homesteading are well behind us in the United States. Although 270 million acres of land were transferred to private landowners and states under the Homestead Act of 1862, that practice ended by the mid-twentieth century, when most of the remaining lands were considered undesirable for human settlement. The passage of FLPMA in 1976 reflected both this shift away from homesteading and a growing recognition of the value of public lands for conservation and recreation. Any BLM land sales under FLPMA take place under carefully considered resource-management plans that balance competing objectives and include engagement with local communities.
Over time, through this resource-management process, presidential orders, and congressional action, many BLM lands have been withdrawn from transfer or sale and protected as national monuments, national conservation areas, wilderness areas, and other conservation lands. In some cases, these sites eventually turn into national parks. Even unprotected BLM lands often have high value for recreation, serving as sites for off-highway vehicle use, dispersed camping, hunting, horseback riding, and more. These activities, in turn, drive the local outdoor-recreation economy and contribute to economic growth in Western rural communities. If federal lands are sold for private development, the lands become lost to those recreational uses, and options for protecting that value in the future are gone.
If federal lands are sold through a state and local nomination process, nominated lands almost certainly will be those with the highest value for housing, which likely would be areas near protected sites. Studies have shown that homes near national parks, national wildlife refuges, and other conservation lands sell for higher prices than similar homes in other areas. If newly sold federal lands end up serving the high-end, second-home market, the sales won’t meet the goals of improving housing affordability, of course. A natural tension exists between raising federal revenues from land sales and addressing housing affordability.
At this point—early on in this conversation about the sale of public lands—the outcomes we predict remain speculative, of course. The long-run impacts of public land sales aren’t yet clear. But public lands will not address problems of housing affordability in the West. And using land sales to pay for the 2017 tax cuts is a slippery slope, in our view, raising the possibility of future irreversible changes to our public land estate.
