Enabling Environments: Local Strategies for the Redevelopment of Public Land

Ballantyne, North Carolina, is a developing edge city along the south side of Charlotte. With good schools, a number of large employers, and a median household income about 50 percent higher than the national median, it is a desirable and growing area—and it needs more affordable housing.

In response to that need, the City of Charlotte took a new look at one of its most important assets: land. In 2023, the City agreed to lease a 3.4-acre parcel to CSE Communities, a division of the developer Crosland Southeast that specializes in residential mixed-income projects.

Under the lease terms, CSE Communities will pay $1 per year for 75 years and build Evoke Living at Ballantyne, a 60-unit development that will be affordable to low- and moderate-income households. The project will include 12 units affordable to very low-income residents earning 30 percent or less of the area median income (AMI), 32 units affordable to households earning 51 to 60 percent of AMI, and 16 units affordable to those earning 61 to 80 percent of AMI.

As Shawn Heath, the city’s deputy city manager, explained to the South Charlotte Weekly, the project is “a wonderful way to leverage city-owned land to get affordable housing in an area that could use it.” Heath drew special attention to the location of the lot, noting that “it is absolutely hands down in a phenomenal area for affordable housing. It checks all the boxes in terms of access to jobs, amenities, services, local public schools.”

With about a third of U.S. households now cost-burdened—spending more than 30 percent of income on housing and facing tough choices about how to stretch limited budgets—communities across the country are taking on the housing affordability crisis, using a resource they already own. Many are finding that urban sites like surface parking lots, vacant lots, institutional land, and government buildings can be used strategically to boost supply.

The current housing crisis stems from many factors, of course, including stagnant wages, elevated construction costs, and restrictive zoning. But ultimately, the problem comes down to this: the nation has a housing crisis because we don’t have enough housing, by millions of units.

As they seek to increase their stock by redeveloping public land for affordable housing, communities are taking different approaches. In the case of Charlotte, the municipality maintains ownership of the land and issues the developer a ground lease, which ensures that the city retains the land value. In other instances, city governments sell or donate their land.

Sometimes the municipality is actively engaged in the development project through a public-private partnership. Other times, its role is limited to holding the developer accountable to agreed-upon terms. In all cases, municipalities are capitalizing on the land’s potential to address a crucial housing need, and, in doing so, fulfilling the responsibility of government to maximize public assets for public good.

Legislating the Use of State and Local Land

According to an analysis by the Center for Geospatial Solutions (CGS) at the Lincoln Institute, the country has about 276,000 buildable acres of government-owned land that are in urban areas (read: places where people want to live and that already have public infrastructure), accessible to public transit (read: reduce traffic congestion and promote walkability), and are not a park, wetland, conservation easement, or anything else whose development would sacrifice open space. This acreage could support more than 6.9 million homes in places closer to jobs and schools than many traditional development sites tend to offer.

Much of this land is in states with exceptionally high housing costs, including Massachusetts (25,775 acres), Florida (20,800 acres), Washington (15,900 acres), Texas (15,000 acres), and California (14,600 acres). Because this list is a “who’s who” of expensive housing markets, it’s also a register of the places most in need of additional affordable housing.

Crucially, more than 98 percent of this acreage is held by state and local governments. The lack of a federal claim to the land not only helps to streamline and simplify the work of redeploying it, but also empowers state and local governments to determine its highest and best use. Some of it may be better suited for community benefits besides housing, such as open space, a rain garden or other green infrastructure, or recreational facilities.

One of the most important tools to support state and local governments as they seek to redeploy their land is legislation. There are two key functions that legislation plays in this context. The first is to establish the necessary conditions to enable these sorts of transactions. At the state level, this may include empowering local governments to sell or lease their property at below-market rates, which makes affordable housing developments pencil out.

An example of effective legislation is Washington, DC’s Disposition of District Land for Affordable Housing Amendment Act of 2014, which enables the city to transfer its property for less than the appraised value for affordable housing projects. Under the law, all new multifamily developments must include at least 20 to 30 percent of units affordable to households with annual incomes between 30 to 50 percent of area median. The percentage of units that must be affordable varies depending on the parcel’s location. The closer the parcel is to public transit, the higher the required percentage of affordable units.

Legislation can further promote efficient use of public land by requiring municipalities to include, or consider including, housing as part of publicly sponsored projects. In Montgomery County, Maryland, Bill 37-12 requires the County to assess the feasibility of including a “significant amount” of affordable housing in proposed capital improvement projects, such as libraries, recreation centers, and transit stations.

An added benefit of legislation is that it can help all stakeholders get on the same page about what is or is not allowed or required when repurposing publicly owned land. Given the multiple government entities that may be involved in such a transaction, this clarity is helpful in resolving confusion between and among agencies.

Nevertheless, some elected officials will inevitably hesitate to redeploy public land for housing because of the political risk, says George W. McCarthy, president and CEO of the Lincoln Institute. “Public land is really contested territory,” he notes. “Everybody has an opinion about how any piece of publicly owned land should be used. And anytime somebody allocates this land, somebody will be mad, and that somebody will use it as fuel to make sure that that decisionmaker doesn’t get reelected.”

But McCarthy, who oversaw the design and launch of the Lincoln Institute’s Community Land for Community Benefits campaign earlier this year, says that’s all the more reason to be strategic: “There are ways to release public land efficiently and effectively so that governments are really squeezing all the public benefit out of it.”

Identifying Suitable Parcels

Once a local government has confirmed that it has the legal right to redeploy its land for affordable housing or other community benefits, the question becomes how best to proceed. There are a number of considerations. The first is to identify all eligible parcels.

Determining exactly which public entity owns which piece of land can be difficult. Despite the numerous entities dedicated to overseeing land use in a given community—the zoning boards, the planning departments, the land use commissions—virtually every community lacks a structure that oversees use of the entire portfolio of the land it owns. Consequently, municipal governments usually don’t have a comprehensive, strategic plan for deploying their land. Instead, they typically take an ad hoc, parcel-by-parcel approach that doesn’t consider whether one piece of land is better suited than another for a certain type of redevelopment. The result can be a failure to maximize a parcel’s unique strengths and opportunities.

This is a solvable problem. It begins by inventorying a community’s publicly owned land. “You can’t come up with a good policy to convert land into housing or anything else if you don’t even know what’s out there,” explains Reina Chano Murray, associate director of CGS.

Conducting a complete land audit can be harder than it sounds. Public land can be owned by a range of public entities, such as a transit authority, a water or sewer district, or a parks department, some of whose names may have changed over time and through various mayoral administrations, creating a jumble of owners that must be unraveled.

Once ownership is established, there are the questions of suitable use. As Murray explains, “You need to know the condition of the land. What is its current zoning and the zoning of the surrounding area? Is the area already being supported for water and other utilities? Is it near public transit? This is important context in order to determine which sites are more appropriate for housing development versus some other public need.” CGS is working with communities in Colorado and elsewhere on this kind of land identification and cataloguing, helping communities find the right places to develop housing, implement nature-based solutions, and mitigate climate risks.

Once a local government has identified the parcels that are best suited for affordable housing, it can turn to project configuration. Key considerations include property interest, organizational structures, housing tenure, and affordability requirements. However, there is no universal formula for these transactions, but rather a range of options depending on a community’s assets, needs, and opportunities.

That said, there is one element that McCarthy considers a good idea for any government, regardless of size or circumstances: maintaining ownership. “We recommend not giving away the land if possible,” he advises. “The preferred idea is to lease it because it allows the government to maintain control. If the city owns the land, it can enforce its will. It can say, ‘These are the terms upon which we will give you this lease, and if you don’t comply, we will just take back the land.’”

Putting Policy into Practice

Cities and counties have long dedicated municipal land for purposes ranging from public parks, green infrastructure, and conservation areas to infrastructural needs like transit and utility corridors. But it has been less common for housing to be built on publicly owned land. Here’s how three cities are doing it.

Hamilton, Ontario

The City of Hamilton, Ontario, has been strategically deploying its land to facilitate the development of additional housing for about a decade. During that time, the City’s approach has changed, says Ray Kessler, who, as the City’s chief corporate real estate officer, manages the city’s portfolio of about 2,300 parcels of land. (In stark contrast to virtually every American city, Hamilton has an Office of Corporate Real Estate that is tasked with strategically managing all city-owned land as a single portfolio.)

“Initially, when we first began disposing of our land for housing in 2016, we were selling off properties, just like everyone else,” Kessler explains. “But more recently we have adopted what we call a ‘lease-first’ policy, where we prioritize leasing instead of selling our land, when possible.”

When leasing is determined to be a viable option, the City will offer a selected nonprofit housing organization a long-term ground lease, typically at least 40 years in duration, to build and/or operate affordable housing. The rent is nominal, and all approved projects must comply with the City’s Affordable Housing Supply Schedule, which outlines different guidelines depending on the specific piece of land.

In the case of the City-owned parcel at 1126 Garth Street, the Schedule requires that the units be either two- or three-bedroom townhouses, available for rent or purchase (though the developer may be able to build a multi-unit dwelling subject to rezoning). If the townhouses are for sale, at least 50 percent of them must be offered for no more than 90 percent of the average purchase price, and no more than 10 units can be built, per the zoning bylaw.

In the event the townhouses are for rent, at least 30 percent of the units must have a rent level that is no more than 80 percent of the average market rent. And, rents may only be increased annually, and must comply with the Provincial Rent Increase Guidelines, annual guidelines that cap maximum rent increases in Canada and vary by province. In 2026, for example, Ontario’s guideline is 2.1 percent, while it is 2.3 percent in British Columbia.

The City prefers to lease the property because it grants them more ability to ensure that the units are affordable over the long-term. As Kessler explains, “When you have a change of ownership, even if you put controls in place, you can’t guarantee compliance over the long term because you’ve lost the property. With a lease contract, we still own the land, and as long as that contract is written properly, those contractual obligations will give you a lot more power than relying on title-related instruments.”

Additionally, leasing creates economic opportunities for the City. “We haven’t done this yet, but with a lease, we may be able to generate revenues to reinvest into other affordable housing projects. Or, in a denser area like our downtown core, we may be able to sell development rights on, for example, land we own that has a performing arts center on it. That land is zoned by right for 30 stories, but it only has six stories, so if we can transfer some of the density to another site then we can harvest revenue that way.”

Boston, Massachusetts

As part of a larger push to redeploy underutilized public land for public benefit, in 2023 the City of Boston launched “Welcome Home, Boston,” a multi-phase initiative to repurpose city-owned land to build housing affordable to residents with low and moderate incomes. The program follows the completion of the 2022 Citywide Land Audit, an inventory of all property owned by the City—one of Boston’s largest real estate owners.

The audit identified 1,238 parcels totaling 9.5 million square feet of land (5.4 percent of total City holdings) that qualifies as either vacant or underutilized, including small parcels appropriate for infill. One hundred and fifty of these parcels have been made available for affordable homeownership opportunities under “Welcome Home, Boston,” which is funded with $58 million from the City’s American Rescue Plan (ARPA) allocation.

Since releasing its first Request for Proposals in June 2023, according to a spokesperson, the City of Boston has approved 10 proposals on 28 parcels that will produce 144 new units of housing affordable to residents with a household income between 80 percent and 100 percent of the area median. In the spring of 2026, the City will approve new proposals for 11 parcels that will produce approximately 40 units, targeting household incomes between 120 percent and 135 percent of the area median. An additional 30-plus parcels are in the planning stages and expected to begin the community engagement process this calendar year.

To help ensure that these affordability goals can be met, the City sells the parcels to the participating developers for a nominal fee. As Sheila A. Dillon, the City’s Chief of Housing, explains, “By making underutilized City parcels available for housing, we can support first-time homebuyers, strengthen neighborhoods, and ensure public land delivers lasting public benefit. In some cases, selling parcels with strong deed restrictions allows the homes to remain affordable for future buyers while reducing the long-term administrative burden of managing land leases. That approach helps the City focus more resources on creating and preserving affordable housing across Boston.”

For example, in 2024, the City sold four vacant lots totaling nearly 16,000 square feet in the Dorchester neighborhood, with an appraised value of $1.26 million for $400, to Norfolk Design & Construction LLC to build 20 affordable homes targeting first-time homebuyers.

“Welcome Home, Boston” is only one of multiple initiatives that the City uses to manage its land. Other larger parcels are moving through a community process to determine the best uses for development. One such parcel is the 18,915 square feet of city-owned land at 55-57 Hudson Street, in Chinatown. The City conveyed the land to the nonprofit Asian Community Development Corporation for a nominal land lease fee to build 110 units of affordable housing, including 66 rental units and 44 condominiums for purchase. The new building will also include a 17,000-square-foot permanent Chinatown branch of the Boston Public Library.

Atlanta, Georgia

As part of a goal to add 20,000 homes to the city’s affordable housing stock by 2030, the City of Atlanta is working to redevelop Fire Station 15, a 0.78-acre parcel of land with a market value of $14.1 million. Located in the popular Midtown neighborhood, the property currently houses a single-story building with a partial basement. Under the proposed redevelopment, a residential, mixed-income 21-story building will be constructed. The latest plans call for 21 stories with a three-story fire station and a five-story parking garage. The remaining floors will offer about 230 apartments, of which about a third will be affordable, a much-needed stock in the amenity-rich neighborhood where median household income is about 70 percent above that of the city at large, and rent is roughly 33 percent higher than the citywide median.

In this instance, the deal is a public-private partnership. The City of Atlanta will continue to own the ground rights and will grant an option to purchase the air rights above the fire station for a nominal fee (e.g., $1) to the Atlanta Urban Development Corporation (AUDC), a nonprofit organization created in 2023 by the City of Atlanta and the Housing Authority of the City of Atlanta (HA) to lead housing development on publicly owned land. AUDC is a subsidiary of the housing authority, effectively acting as a public development agency that is able to collaborate with private investors.

Once the property is redeveloped, AUDC will continue to hold the project (i.e. the land and improvements but not the fire station) in a long-term ground lease structure with the developer. It is expected that the City will own the permanent Fire Station 15.The remainder of the development will be owned by a joint venture between the selected developer partner and AUDC.

Under the proposed structure, AUDC will be the majority stakeholder, retaining at least 51 percent ownership, and will split the project cash flows with the developer, as described in a joint report by Drexel University’s Nowak Metro Finance Lab and Putting Assets to Work (PAW), a national incubator that helps state and local governments transform underutilized public properties into assets that generate long-term public value. As explained in the report, “The joint venture arrangement allows the developer to enjoy some upside from project cash flows with relatively low downside risk while ensuring long-term affordability, thanks to AUDC’s majority ownership.”

Fire Station 15 is part of the larger push by Atlanta Mayor Andre Dickens to activate city-owned vacant land for housing. Parcels in the City’s diverse and growing portfolio are selected for redevelopment based on a comprehensive map of publicly owned assets that city officials created through participation in PAW’s incubator program in 2023.

Building Momentum

In the same way there is no single driver of the housing affordability crisis, there isn’t a single solution. Repurposing publicly owned hand for affordable housing is not a panacea. But it is an efficient, scalable solution that could make a massive dent in the problem. If the relevant governments developed the 276,000 buildable acres of publicly owned land identified in the CGS analysis, even to the low-density standards of seven units per acre, the nation could add more than 1.9 million new housing units. If ambitions were raised and developers built to higher-density standards of 25 units per acre, government-owned land could yield 6.9 million units of new housing.

Of course, not all public land should be developed by right. It’s still critically important for communities to protect open space, which has extensively documented benefits for public and planetary health, and to ensure that the intended use of a property aligns with its attributes.

But the momentum is building, at the state and municipal level. California has strengthened its Surplus Land Act, which requires local agencies to inventory available parcels, offer them first to affordable housing developers, and follow transparent, enforceable procedures. Massachusetts has identified a portfolio of surplus state parcels with the aim of producing thousands of homes. San Francisco’s Public Lands for Housing program is putting large, underperforming sites such as the 17-acre Balboa Reservoir to work for mixed-income housing, and Sound Transit in Washington state dedicates surplus properties for income-restricted housing near stations.

Through thoughtful and balanced strategies, communities can use the land they already own to provide affordable housing and adapt to climate change, and they can use the value derived from these arrangements—whether it comes in the form of lease payments, the purchase of development rights, or another mechanism—to finance infrastructure and social services. As communities like Charlotte, Hamilton, Boston, and Atlanta are demonstrating, public land is an essential component of 21st century policy solutions to our most serious societal challenges.

Loren Berlin is a writer and editor specializing in housing. Read more about her work at www.lorenberlin.com.

Lead image: A rendering of Evoke Living at Ballantyne, a 60-unit development that will be built on municipal land in Charlotte, North Carolina, and will include affordable units. Credit: Evoke Living at Ballantyne.