Fix the Rules
A community can know exactly what land it owns and still face challenges in using it to deliver community benefits. The rules governing how public land is transferred, leased, and developed were mostly written to maximize revenue from surplus property sales, not to deliver housing or other public benefits. Rules changes can make the public-benefit use of public land the default practice, not a difficult exception.
The Challenge
Weak and perverse disposition policies. Most surplus land statutes require agencies to sell at fair market value, which precludes the below-market dispositions that make affordable housing financially feasible. Even where reform has been attempted, implementation is often slow, because statutory change alone does little without the institutional capacity and political follow-through to act on it.
Land trapped between agencies. Activating a site frequently requires moving it from one public entity to another — from a transit authority, DOT, or school district to a housing developer or land bank. Fragmentation makes this hard: dozens of agencies hold land under different mandates, with no shared process for transferring it toward housing, so parcels stall between owners.
Limits on discounting. Many jurisdictions restrict an agency’s ability to sell or convey land below market value, sometimes through constitutional “gift clause” provisions, sometimes through statutory revenue mandates. Some public owners — state land trusts obligated to generate revenue for beneficiaries like public schools — face genuine legal constraints on below-market transfers. The discount that would make a project viable is precisely what the rules forbid.
The result is a system in which the public-benefit use of public land depends on individual initiative and favorable circumstances rather than standing policy.
The Solution
The authority to change these rules sits at every level of government. State legislatures can pass enabling laws that bind their own agencies and set the terms for local action; counties and cities can rewrite disposition ordinances and create new development entities; transit agencies, housing authorities, and other public bodies can adopt portfolio policies of their own. Public asset corporations and land banks, where states authorize them, can hold and convey land under more flexible terms than a standard agency. Five tools do most of the work.
Surplus Land Legislation. Surplus land laws require public agencies to identify property they no longer need and offer it to affordable housing developers before putting it on the open market. The strongest versions, building on California’s Surplus Land Act, extend the definition to underused land, require coordination across agencies, and mandate below-market pricing for sites suited to housing.
Public Asset Corporations. Public asset corporations are statutory entities authorized to aggregate land from multiple agencies, issue bonds, and develop it under enforceable affordability mandates.
Ground Lease Standardization. Standardized, model 99-year ground leases, with consistent resale restrictions, affordability requirements, and lender protections, turn what is now a custom legal exercise for every project into a routine transaction. The community land trust movement gives states and localities a foundation to build on.
State Preemption and By-Right Approval. Because states hold sovereign authority over their own land, they can exempt affordable housing on public sites from local zoning, grant by-right administrative approval, and waive parking minimums and impact fees near transit. These tools remove the discretionary review and entitlement hurdles where projects stall.
The Built Sites First Standard. A measurable performance standard asking jurisdictions to demonstrate good-faith use of their already-developed, housing-priority public sites before drawing state subsidies for greenfield development keeps new housing where infrastructure already exists and eases pressure on undeveloped land.
Washington State: The Sound Transit 80/80/80 rule
Washington’s 80/80/80 rule, enacted in 2015 and codified at RCW 81.112.350, governs how the regional transit agency Sound Transit handles land it no longer needs. The agency must offer at least 80 percent of surplus property suitable for housing to local governments, housing authorities, and nonprofit developers, at no cost, below-market sale, or long-term lease, before offering it to any other buyer. Of the housing developed, 80 percent of units must be affordable to households at or below 80 percent of area median income. Sound Transit also contributes $4 million a year for five years to a revolving loan fund for affordable housing near transit. Sound Transit’s pipeline holds more than 3,400 homes, roughly 2,700 of them income-restricted, including a 368-unit high-rise in First Hill and a 245-unit project at the Roosevelt light rail station.
Colorado: Building the legal scaffolding
Colorado’s HB 19-1319 (2019) requires every state agency and public university to inventory non-developed land with potential for affordable housing. SB 22-130 (2022) then created a Public-Private Partnership Collaboration Unit within the Department of Personnel and Administration, authorized to plan, develop, and govern P3 projects and to move inventoried sites toward development. The Unit has surveyed underutilized state properties and is advancing projects at the Golden Range, the Governor’s Mansion, Lakewood, and Steamboat Springs. As of early 2026, the inventory and disposition framework are in place and projects are in the pipeline.
Policy Resources
State and local governments exploring the use of public land for affordable housing can find examples of effective policy options in the Lincoln Institute’s Using Public Land for Affordable Housing Report.