Why Selling Public Lands Makes Sense

With the One Big Beautiful Bill Act signed into law, the time is ripe to look back at a plan by Sen. Mike Lee (R-UT) to sell off millions of acres of public lands, which was removed from the bill.

Although the original plan — which required the Bureau of Land Management (BLM) and the Forest Service (FS) to sell off between 2.2 million and 3.3 million acres of federal land (a minuscule amount compared to the tens millions of acres under federal control in states such as Utah, Nevada, California) in 11 Western states for housing — made it into the Senate’s draft of the bill, a ruling from the Senate parliamentarian and, according to Lee, the inability to ensure that the “lands would be only sold to American families” caused Lee to remove the provision.

Source: GIS Geography

Even without the limitations of the reconciliation process, it is unlikely that Republicans would have included the public lands sell-off in the final version of the bill. Since the idea of selling public lands for housing was first introduced, it faced intense bipartisan opposition from politicians and advocacy groups. In Congress, Rep. Ryan Zinke (R-MT) prevented a public lands sale from being included in the House version of the bill, declaring, “This was my San Juan Hill; I do not support the widespread sale or transfer of public lands,” and, after the Senate draft was released, five House Republicans, including Zinke, claimed they would “be forced to vote no” if it reached the House with the sell off. Senate Democrats also fought to “keep public lands in public hands” in the bill and praised the provisions’ removal.

Besides the opposition that usually comes from left-leaning environmentalist groups for production and development on public lands, Lee’s proposal faced strong opposition from conservative environmentalist Benji Backer and the right-leaning advocacy organization Hunter Nation. Writing for the Daily Caller, Backer decried the proposal as “a betrayal to America and the American people,” while claiming that “America’s public lands have created our nation’s legacy.”

Understanding the public outcry against Lee’s proposal requires looking beyond its text, which, on the surface, appears mundane and practical. As a frequently asked questions document from the Senate Energy and Natural Resources Committee highlights, the plan involved a limited amount of unutilized and unprotected federally owned lands to be sold exclusively for “housing or community development needs.” Notably, the lands prioritized were those that are suitable for development and were mostly within five miles of a population center, leaving 99.25% of all BLM and FS land untouched.

Evidence also supports the idea that federal lands can be used to increase the supply of housing. Arthur Giles, senior manager of housing supply initiatives at the American Enterprise Institute, found that developing just 135-180 square miles of the most suitable BLM land could yield approximately one million new homes over ten years. Based on the high demand for housing in Western states and the evidence that this plan provides a remedy to high prices by increasing supply, selling off nearby public lands offers a rational solution to an important problem.

Source: Construction Physics

The criticism Lee faced, however, has more to do with a protectionist view of public lands than an analysis of the costs and benefits of his proposal. For public lands protectionists, ensuring that federal land remains as such overrides other concerns because it keeps these lands from being transitioned to private production or development. While forestalling development of these lands has practical benefits for some interest groups by preserving their ability to hike, fish, or hunt, the motivation for protecting these lands has more to do with a connection protectionists prescribe between American nationhood and the preservation of its topography, with the latter being inherent to the former. “We must conserve the natural beauty of this great nation we have inherited. And, yes, we must conserve our public lands for the benefit of both current and future generations,” argues Backer in the aforementioned op-ed.

The protectionist view derives from the conservationist ethos of President Teddy Roosevelt, who protected approximately 230 million acres of public land, and Sierra Club founder John Muir, who viewed the development of federal lands as a “desecration” of “cathedrals of nature.” According to Muir, “only Uncle Sam” can prevent these lands from desecration.

Over time, the conservationist ideals of Roosevelt and Muir have transformed federal policy away from prioritizing the transfer of public lands to private owners, while protecting relatively selective portions of unique federal lands via mechanisms such as the 1906 Antiquities Act, to maintaining federal ownership of land indefinitely. In contrast to the 1862 Homestead Act, which allowed American citizens to purchase unappropriated public lands for cultivation and settlement, the 1976 Federal Land Policy and Management Act (FLPMA) explicitly declared it federal policy that “public lands be retained in Federal ownership” unless “disposal of a particular parcel will serve the national interest.” The FLPMA also established that federal lands be managed based on the tenets of multiple use and sustained yield, ensuring that no type of land usage prevents another from occurring.

While the protectionist view of public lands sounds appealing in that it purports to protect natural spaces people enjoy visiting, in practice, it means that people end up dealing with higher costs for housing, natural resources, and energy, while the interests of select groups of outdoorsmen and environmentalists are protected. By giving a nationalistic aura to public lands, protectionists end up prioritizing their preservation over the livelihoods of the American people. Of course, the economic and psychological benefits of outdoor recreation and ecological conservation should be recognized, but they should also be balanced against the benefits derived from building new homes and drilling for natural resources, not assumed to be the highest-value uses due to romantic ideals regarding American nationhood.

Instead of treating public lands as sacrosanct, whether they should be protected or developed is a question best decided by individual users. The most efficient way to determine how public lands should be used is to introduce price signals by selling tracts to private parties, thereby allowing buyers to determine the value these lands have for uses ranging from mining to maintaining animal habitats.

With price signals, conservation and production can occur concurrently. For instance, the Audubon Society, an environmentalist organization, allowed an oil company to drill dozens of wells in its Louisiana bird sanctuary for nearly 50 years under conditions that included limiting drilling during bird-nesting season. Because the Audubon Society had clear ownership over the land, it could weigh the costs and benefits of permitting oil production, creating an incentive for it to allow production as long as it does not interfere with the purpose of the sanctuary. With the royalties gained from oil production, the Audubon Society had additional funds to invest in conservation elsewhere. With government control, these trade-offs might be considered through resource management plans — whose creators lack the knowledge necessary for economic decision-making — or not be considered at all if the lands are protected areas, leading to significant opportunity costs.

In a 2003 Washington Times article, Jerry Taylor, former director of Natural Resource Studies at the Cato Institute, used this reasoning to argue that transferring the Arctic National Wildlife Refuge to an environmentalist group was a better outcome than keeping it under government control:

We could even give reserve lock, stock, and barrel to the environmental lobby. The Greens, of course, might decide to lock it away (demonstrating that the wilderness is indeed more valuable to them than the oil revenue), but industry claims that they only need access to a tiny part of the reserve, an area about the size of Dulles National Airport in a reserve the size of South Carolina. There’s a good reason why conservationists might take, say, $10 billion for that access. They could use that money to buy more land elsewhere and insist upon environmentally sensitive drilling and transportation practices. After all, when environmentalist organizations manage their own lands, they often allow industry access under the right terms and conditions. And if not, then fine; economic efficiency would be served either way.

One possible methodology for privatization was put forth in a 1999 Policy Analysis by the Cato Institute, which developed a plan to auction off all public lands over 20 to 40 years, prioritizing allocation to the highest-value use, low transaction costs, broad participation in divestiture proceedings, and the recognition of squatters’ rights. The authors note that private ownership would provide the best of both worlds by enhancing environmental quality and economic efficiency, countering the assumption of Roosevelt and Muir that protecting lands requires public ownership.

For lands aptly described as “cathedrals of nature” due to illustrious topography or unique collections of animals, price signals would lead to conservation in a private system of land ownership. An example of improved environmental quality from private lands comes from South Africa, where private game ranches had “richer populations of wildlife” than those owned by the government because private owners could profit through the sale of hunting passes and animal products. With rights to the wildlife on their property, these owners are incentivized to protect this wildlife to ensure that they can sustain profits for the future. The same incentive applies to any type of plant or animal species people want to protect, whether it involves monetary profit or psychological profit resulting from a desire to protect these species. When compared to government-driven conservation efforts via laws such as the 1973 Endangered Species Act and 1970 National Environmental Policy Act — both of which inhibit environmental conservation through disincentives and lengthy reviews — private conservation provides a better alternative.

Furthermore, a system of privatization would lead to more efficient land usage than the FLPMA’s policy of multiple use and sustained yield. By favoring the indefinite preservation of land over its most economic use, the FLPMA keeps natural resources in the ground and prevents developers from building what Americans want. As Gary D. Libecap explains for the Hoover Institution, “When it is not economically justified, but imposed by regulation or government ownership, sustained yield again results in economic losses, these ones borne by society.” The same results occur due to multiple use because “it grants discretion to the bureaucracy in allocation and regulatory decisions in a manner that promotes the agency and its favored lobby groups, but does not necessarily advance broad public welfare.”

To get the most out of the U.S.’s lands and resources, Congress must look to privatize as much public land as possible. Currently, the federal government controls 640 million acres (28%) of American land, only 80 million acres of which are under National Park Service administration. Taken in tandem with the vast resource potential of the U.S., it is clear that keeping lands locked under federal ownership is leading to a massive missed opportunity. While Sen. Lee’s proposal made a great step in the direction of privatization, it did not go far enough in that it restricted the land sales to housing, preventing the land from achieving its full value on an open market. For future land reforms, Congress should look to include a broader coalition of developers, miners, drillers, and private conservationists to garner more support for a privatization project. Nonetheless, no public land sale proposal will ever be enacted if market principles continue to be ignored and the protectionist view of public lands as sacred remains dominant.