Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending / Why Government Owns So Much Vacant Land
Transcript
- Lucas: The federal government is the largest landowner in the United States by a staggering margin. We're talking about 640 million acres — roughly 28 percent of the entire country. Luna: That's almost a third of all U.S. land. And most of it isn't the National Parks people think of, right? Lucas: Exactly. The vast majority is managed by four agencies: the Bureau of Land Management, the Forest Service, the Fish and Wildlife Service, and the National Park Service. But here's the kicker — a huge chunk of it is simply vacant. No recreation, no grazing, no timber, no mineral extraction. Just sitting there. Lucas: And the government spends real money maintaining it. Fencing, fire prevention, invasive species control. According to a 2024 report from the Congressional Budget Office, the BLM alone spends about $1.2 billion a year managing its 245 million acres. But it only brings in about $200 million in receipts — mostly from grazing fees and oil and gas leases. Luna: So taxpayers are subsidizing these lands to the tune of a billion dollars annually. That's a billion-dollar loss on an asset that's not even being used. Lucas: Right. And it's not like the BLM is running a national park. These are often arid, remote parcels in states like Nevada, Utah, and Alaska. Some have never been surveyed. The question is: why does the government hold onto them at all? Luna: I imagine there are political and environmental reasons. But from a fiscal standpoint, it seems like a no-brainer to sell off the low-value stuff. Lucas: That's exactly what some economists have proposed. A 2023 paper from the Property and Environment Research Center estimated that selling just 10 percent of BLM's lowest-value land — parcels valued under $1,000 an acre — could generate $15 billion in one-time revenue and save $100 million annually in management costs. Luna: Fifteen billion dollars. That's real money, even by federal standards. And it's not like we're selling Yosemite. Lucas: No, these are mostly empty desert. But the pushback is fierce. Environmental groups worry about fragmentation of habitat. Western states often oppose federal land sales because they'd rather have the feds manage it — even badly — than see parcels fall into private hands with unclear development rights. And there's a deep cultural attachment to 'public lands' as a concept. Luna: I get that. But if we're serious about the deficit, this feels like low-hanging fruit. I mean, the government sells off surplus office buildings all the time. Why not land? Lucas: Well, the General Services Administration does sell surplus federal buildings, but the process is slow and often politically blocked. Land is even harder because of the multiple-use mandates. The BLM is required by law to manage for 'multiple uses' — recreation, grazing, timber, mining, conservation. Selling land effectively removes it from that mandate, which some see as a loss. Lucas: But here's the thing — the multiple-use mandate doesn't actually generate much revenue on low-value parcels. The grazing fees are set by formula and are far below market rates. The Government Accountability Office found that BLM grazing fees are about one-fifth of what private landowners charge. So we're subsidizing a handful of ranchers while losing money overall. Luna: That's a classic example of a policy that benefits a small, concentrated group at the expense of diffuse taxpayers. You see it in agricultural subsidies too. Lucas: Exactly. Now, there is a middle ground. Some have proposed creating a 'land trust' model — transferring management to state or private conservation trusts that can generate revenue through sustainable uses, while keeping the land open. But that requires legislative action, which is always a slog. Luna: Right. And we should note that not all federal land is a fiscal drag. The National Park Service generates a lot of economic activity through tourism. But the BLM's mandate is different. Lucas: Absolutely. The parks are a different story. But the BLM and to some extent the Forest Service hold vast acreage that simply doesn't pay for itself. And with interest on the national debt topping $1 trillion a year, every billion counts. Lucas: So the question isn't whether to sell all federal land. It's whether we should keep paying a billion dollars a year to hold empty desert that generates almost nothing. Luna: That's a pretty clean framing. And I think a lot of listeners would be surprised to learn just how much land the government owns and how little it does with it. Lucas: Yeah. And speaking of surprising — this kind of deep-dive, ad-free analysis is exactly what listener support makes possible. If walking through the economy with us has made something click, a couple of dollars a month is genuinely what keeps these going. Buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: It really does make a difference. And we don't run ads, so it's the only way the show stays sustainable. Lucas: Exactly. So back to those 245 million acres — there is actually a precedent for selling off low-value federal land. It's called the Recreation and Public Purposes Act, which allows the BLM to sell or lease land to state and local governments for parks, schools, and other public uses. But it rarely happens because of bureaucratic hurdles. Luna: I've heard that the process can take years and requires environmental impact statements. So even when both parties want a transfer, it's stuck. Lucas: Right. One example: in 2022, Clark County, Nevada — that's Las Vegas — tried to acquire 5,000 acres of BLM land for affordable housing. The application took three years and still hasn't been fully approved. Meanwhile, housing prices in Vegas soared. Luna: So the government is sitting on land that could help address a housing crisis, but the system is too slow to move it. Lucas: Exactly. And that's the broader fiscal lesson: owning an asset isn't free. The opportunity cost of holding vacant land is real. If the federal government treated its land portfolio like a private company would — regularly reviewing return on assets — it would likely sell off billions of dollars' worth. Luna: But the political will isn't there. Maybe because the benefits are diffuse and the opposition is concentrated. Lucas: Sure. But with the deficit where it is, these conversations are becoming more frequent. The 2026 budget proposal from the White House actually included a modest proposal to sell 10,000 acres of BLM land near urban areas — estimated to raise $500 million. It didn't pass, but it's a start. Luna: So maybe the conversation is shifting. I hope so. Lucas: Me too. Because at the end of the day, government land isn't just acreage. It's a balance-sheet item, and right now, that sheet is out of balance. Luna: Thanks, Lucas. That was a great angle. Lucas: Thanks, Luna. Until next time.