As local governments search for new tools to address housing shortages, public land is often identified as a potential solution. Land costs can contribute significantly to overall housing project costs, and public land can be sold or leased at discounted rates for affordable housing development. By reducing or eliminating a major development cost, public land can offset the financial impacts of reduced rents for affordable housing.

Local governments can own or control thousands of parcels within their boundaries, many of which are underutilized, need revitalization, or remain vacant. The process to redevelop that land varies by jurisdiction, but is often slow, arduous, and bespoke. Individual departments may recognize that they own underutilized land but focus on core objectives rather than real estate development. Local elected officials may be aware of developable parcels, but navigating a clunky land disposition process may require the development of a request for proposals, with specific criteria, orchestrated by multiple city departments, and requiring approval from the city council or county commission. Often, public land development in the U.S. occurs through outright land disposition/sale to private developers, giving the public sector upfront cash but forfeiting control over future redevelopment and long-term financial gain.

In many communities, the public sector organizations with the most real estate development experience are public housing authorities, redevelopment authorities, port authorities, and land banks. These agencies historically have experience developing affordable housing (in the case of public housing authorities) and redeveloping blighted and vacant properties for economic development purposes (in the case of redevelopment authorities, port authorities, and land banks). They typically possess the appropriate tools for public sector redevelopment, including the ability to hold property, issue bonds, utilize the power of eminent domain, and more. Additionally, many of these public sector organizations are exempt from property taxes, and sometimes sales taxes, further lowering potential development and operations costs.

In some places, these existing organizations successfully shepherd public land through the disposition and development process to create much-needed affordable housing and public benefits. In other communities, though these organizations have the powers needed to utilize public assets to create housing, the local norms, capacity, or interagency relationships make such a pivot challenging. In many cases, these agencies can create wholly owned subsidiaries with their own independent boards, staffs, and processes, endowed with the same powers to hold, finance, develop, and utilize public lands for a wide range of purposes, including the creation of affordable and mixed-income housing. These subsidiaries blend the best of both worlds, creating new, mission-focused organizations, while building on the powers and structure of their parent organizations.