Public Land, Private Houses: A Proposal To Address The Housing Crisis

To solve homelessness, housing insecurity and address the high cost of housing, we should establish new communities on public land. Build houses there, and give or sell those houses to qualifying Americans.

-by Dr Liam O’Mara IV

The basic theme of this piece can be summed up in less than a sentence: Give people houses using public land. This will sound like a radical idea, like “socialism” or some scary government intrusion into society, which is unfortunate. But I argue such reactions are more an indication of how skewed to the right our political culture has grown. I hope to show that the idea is far from radical in its theory or practice. In addition, attempting such a thing would have an immeasurably positive impact on the country.

Land Ownership, Usufruct Rights, and Paradigm Shifts

As a historian, I’ll start with a quick bit of history! It is worth remembering that land ownership is a relatively recent idea, and that communal working of the land and variations on usufruct rights were quite common in world history. For those unfamiliar, usufruct gives you the right to claim and put into use a piece of land and to build your house or business on it. However, this does not transfer the title for the land to you-- that remains with the community as a whole or the state.

This article will propose constructing communities on public land and then selling or transferring those houses, either with or without the land. It may seem strange that people could own the home but not the land. However, this model still frequently appears in everything from university housing to condominiums, and was a common alternative nationwide to private ownership as recently as the nineteenth century.

In other words, keep your trousers on and don’t go screaming, “That’s Communism!” because it’s not. I happen to think we need to get past the stale communist/capitalist divide and investigate innovative hybrid ideas like market socialism, Georgism, and mutualism; or concepts with justifications on left and right like universal basic income. It’s time to get out of our rotting boxes, folks, and look for practical solutions to real problems!

With that out of the way, let’s look at why there is a problem, and then move into the particulars of how to solve it.

Housing, Income, and the Death of the Middle Class

The average new house sale price in the United States as of March 2021 was $409,000. Flashback to 1965 and the average new home price was just $21,000. Pretty big difference, huh? And contrary to a lot of right-wing lies, this is not due to inflation, at all.

The median family income in 1965 was $6,900. In 2019 dollars that works out to $56,000. In 2019 (the most recent year figures are available via the Census Bureau) the median income was $68,700. Not a big difference, given how much our national wealth and productivity has increased. If we take that $21,000 house from 1965 and put it in 2019 dollars, the cost is … $170,000. That’s much less than half the current sale price for houses.

Given forty years of virtually stagnant wages (again adjusting for inflation), with some jobs actually seeing a decline, that massive increase in cost for housing is utterly obscene.

When my grandparents were my age, they were able to pay off multiple home loans on a working class income. None in my family were college-educated professionals, and my disabled grandfather ran a small antique store-- yet he managed to pay off his own house, and buy and pay off a cabin in the mountains.

American Decline and the Need for a New War on Poverty

When we think about people climbing out of poverty, one of the bigger factors is the acquisition of assets which appreciate in value, whether we’re talking about real estate, stocks and bonds, or what have you. Having something that is yours, and which you can tap in case of emergencies, keeps people from falling back down the ladder once they’ve taken that step up a rung.

And we know that if people are more financially secure, they spend more and are better able to contribute to economic growth. In addition, they are better positioned to put their kids through college, to take risks such as start a business for themselves, and to retire without losing everything.

So if we really care about addressing poverty in this country, why not address the question of assets, and help people get a good start so they can pick themselves up? As Dr Martin Luther King Jr once said, “it’s a cruel jest to say to a bootless man that he ought to lift himself by his own bootstraps.”

We have for too long been headed in the wrong direction, and at this point there is more poverty in the United States than there is in Mexico. We are, in fact, one step from dead last among OECD countries. That we aren’t treating that as the scandal and emergency that it is, is incomprehensible. Country after country surpasses us in every metric on quality of life, and Americans just sit back, close their eyes, and scream “We’re number one!”

Let’s turn the page on decline and try something new.

The Jobs Guarantee, Federal Lands, and a Solution

Two of the biggest expenses in housing are the land values and the construction cost. We could solve both by deploying the resources of the federal government. The policy of a jobs guarantee can fulfil the New Deal promise and ensure a higher standard of living and dignity for all. Funds can be used to stimulate private businesses to engage in sustainable construction projects, offering well-paid union jobs to create whole new communities and to revitalize older ones.

The key to making this work is the availability of plentiful land which would cost virtually nothing to put into use. The federal government directly owns and controls ~640 million acres, 28% of the land area of the United States. Of that land, probably about one-third is suitable for development, drawn mainly from the 244 million acres held by the Bureau of Land Management.

(192 million acres are managed by the Forestry Service, 89 million acres by the Fish and Wildlife Service, and 80 million by the National Park Service. I have no interest in seeing more development in forest and wilderness as such, so those lands ought all to be sacrosanct.)

I am thinking specifically of the vast open spaces in underpopulated states like the two Dakotas, Montana, Wyoming, Colorado, Idaho, Oregon, and Washington. Many of these states are better positioned for the unfolding climate change, and a string of new cities in these areas would create an economic explosion of productivity and growth in the US. New road and rail lines could connect these areas to the rest of the country, and they would go from isolated rural states to major commercial and industrial centres.

But how do we get the people there?

Give People Houses: The Simple Solution to a Simple Problem

Imagine the following scenario, if you will. The federal government offers contracts for new roads, housing communities, and the laying out of future commercial centres on these lands. It then divests itself of the assets, allowing markets to take centre stage. The space for stores and the like would be available to businesses interested in moving into these new areas, and their development costs would be greatly reduced by not having to purchase the land or deal with the former lack of infrastructure.

The houses built, the communities, could be divided into two categories. Some would be sold outright, land and house, to those who meet strict requirements-- i.e., being below a particular income and wealth threshold, but still able to borrow for, or front, a nominal purchase price. The houses would be sold for no more than the cost of construction, making them extremely inexpensive. This offers an incentive for folks to migrate to these new communities.

The second classification would be for smaller houses aimed at helping the genuinely impoverished. Folks with no assets or ability to get a home loan would be given their house, but would not gain title to the land itself. The model for this, in my mind, is some of the housing communities which have built up on university campuses. A tenured professor may buy a house on campus, eliminating his commute, but he cannot sell the house to someone

outside the university community-- i.e., he does not really own the land on which it sits.

The reason for this is simple. If someone moves into one of these houses, they gain an asset which will appreciate as the community around them grows. However, it will never grow as far as the houses which can be sold without restriction. This makes them ideal starter houses, which they can sell or trade to someone else in need down the road. The goal, remember, is to create an asset base for the working poor-- something that will grow in value and offer leverage for them to climb the socio-economic ladder out of poverty.

The “Free Stuff” Stigma and American Poverty

In an era when the right constantly throws around the accusation that the left “just wants free stuff”, much effort is made trying to push back and say, well, it’s not free, it only makes better use of taxes and the like. But really, we are talking about spending money on people! The real argument ought to be whether it is right for a country to improve the lives of its people, or instead to let the rich concentrate power and plunder wealth. Faced with such a choice, I’m always going to stand on the “free stuff” side.

About 40 million people live below the poverty line in the United States-- about 18% of the population. That poverty line is artificially low, and the number of people who are financially insecure, lacking assets and retirement, etc., is much higher. At least 106 million Americans-- a third of the population-- are defined as financially insecure, with incomes below 200% of the poverty line and lacking real assets.

Ask yourself: Is it right, that in the wealthiest country in the history of the world, a third of the population will struggle just to survive and pay the bills? That tens of millions would be food-insecure and housing-insecure? That we leave so many behind hurts all of us, and drags the United States to near the bottom in nearly every measure of social health. Heck, over half a million Americans are literally homeless, living on streets and shelters!

A New Kind of Freedom Dividend

We have the power to end homelessness, end housing insecurity, boost the entire real economy, and return the United States to its rightful place as a land of opportunity. We have fallen far from the promise engraved on the Statue of Liberty. The US now ranks 27th in social mobility, meaning that it is now easier to climb out of poverty in 26 other countries. Many of those ahead of us are formerly hide-bound classist cultures with literal aristocracies!

The United States was born to lead the world in freedom and prosperity. That it has fallen out of the top twenty in basically everything should be a mark of shame worn by all of us, because it was a choice. We voted for this decline, and we can vote to change it. We need to embrace policies known to work, and experiment-- as we did back in those daring days between FDR and LBJ. We can solve poverty, and make the United States a true land of opportunity.

Or we can continue our decline, continue to criminalize poverty and lock people up, and give up any hope of being a part of the free world. It is already easier for social scientists to compare the US to the developing world than to the rest of the developed world.

It’s past time to stop tolerating that. Ending housing insecurity is a bold step in the right direction. We should expect decent housing as a basic right, as FDR suggested back in 1944. And yes, we can conceive of this as another freedom dividend-- an entitlement from living in the richest country on earth. We built this wealth; it’s time more of it trickled down to us.

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Blue America is just finishing up the vetting process for... another progressive veteran, Steven Holden, who's taking on John Katko in central New York. He read Liam's guest post today and was impressed. He told me that "We need innovative ideas such as this across the country. Some cities around the country already have tried programs like this, but with the large swaths of land owned by the Bureau of Land Management, this is a very real idea. There are two ideas that I have that would support such a plan if elected. First, relocate this effort from the Department of the Interior to Housing and Urban Development (HUD). HUD is better equipped from a management and fiscal standpoint to supervise such a program. Within my first year in office, I would introduce a plan to begin to transfer these assets to HUD and fund the construction or placement of said housing unit. Second, we would need to partner with the Department of Commerce to aid said citizens in developing businesses to support these communities. We could designate these developments, not to large land developers or real estate agencies, but to businesses designated as economically disadvantaged such as 8a or Service Disabled Veteran-Owned Businesses. I would take my 25-years knowledge of Federal Finance and Contracting to require such businesses to receive set-aside and sole source designations under the Federal Acquisition Regulation. We would build wealth both in the terms of assets, and in the way of common capital. Big problems require bold action!"