The Center for Geospatial Solutions at the Lincoln Institute of Land Policy estimates that local governmental agencies in the U.S. own over 230,000 acres of transit-accessible land, with potential to support up to 5.9 million housing units. This land ownership, however, is typically divided among numerous agencies, including local government(s), school districts, transit authorities, housing authorities, local public utilities, land banks, and more. While much of this publicly owned land is located in amenity-rich areas near good jobs and transit, the entities that own these parcels may not be best positioned to develop them into much-needed housing.
Public asset corporations exist worldwide to turn publicly owned land and assets into housing and mixed-use developments that communities need. Copenhagen’s City and Port Development Corporation is perhaps the most well-known example, but New York State created an Urban Development Corporation in 1968 to build affordable housing across the state (in response to the Civil Rights Era and a recognition of the growing housing crisis in the late 1960s), and a number of cities in the U.S., including Atlanta and Chattanooga, are bringing the model back with new public asset corporations created in the last two years. Other cities, such as Cincinnati, are using existing public entities like Port Authorities to redevelop public land.
Public asset corporations use publicly owned land to develop real estate, in partnership with the private sector, that provides both public and private benefit. In the context of this State and Local Housing Action Plan, it is assumed that public asset corporations would focus on housing development (which is not true of all public asset corporations worldwide, some of which focus on public transportation, infrastructure, or other large scale projects) and are a complement to the Municipal Property Advisor model also profiled by the Task Force. Rather than working with outside real estate experts to identify publicly owned land and solicit bids from private-sector developers, public asset corporations bring that expertise in-house.
As public entities, they can work with their partners within local government to align land use, public financing tools, permitting, and other aspects of the land assembly and development process. The benefits lie in gaining control over public sector coordination, particularly through strategies like land bundling and the consolidation of overlapping authorities. They also ensure that the public sees a return from the development on public land — either through monetary return from the sale or leasing of land, or through social return with public goods like affordable and mixed-income housing, new schools, fire stations, and police stations, and walkable, amenity-rich neighborhoods near transit and jobs.
The Challenge This Tool Solves
Public asset corporations solve four problems simultaneously. First, they help redevelop vacant, underdeveloped, or obsolete public assets into more productive use, providing a public-sector partner with much-needed real estate activity, such as developing mixed-income housing. Second, they remove the burden of real estate development from governmental departments that may lack the in-house expertise or staff availability to shepherd the development process, helping local governments identify, prepare, and use publicly owned land for the public good. Creating a public agency focused on developing public land addresses the disjointed, costly, slow, and burdensome process that typically characterizes public land redevelopment. Third, by contributing public land to housing developments, they can lower development costs and provide an equity investment in new housing development that can drive affordability. Fourth, they utilize the advantageous locations of many public land parcels to place housing close to other jobs, transit access, and other public and neighborhood services.
Types of Communities That Could Use This Tool
Every community where the public sector owns vacant, underdeveloped, or obsolete public assets could benefit from a better system to identify, prepare, and redevelop those assets for more productive uses, such as public asset corporations. However, public asset corporations require significant up-front investment and in-house staff expertise. Atlanta provided its Urban Development Corporation a $4 million grant to quickly hire staff with real estate development expertise so it could immediately begin working on projects, while the Port of Greater Cincinnati Development Authority has approximately 10 staff devoted to housing work. Other communities may instead prefer to work with Municipal Property Advisors to aid with public land development.
Expected Impacts of This Tool
Public asset corporations can transform vacant or underutilized public land and assets into modern, attractive developments with housing and amenities for people of all income levels. For instance, in Atlanta, the city has started the process of redevelopment across 50 different public land projects. This followed a city-wide land audit that identified more than 700 acres of publicly owned land within jurisdictional limits. While these projects are in the early stages of development, they are expected to generate hundreds of units of affordable and market-rate housing. If all land owned by local governments and agencies were opened for redevelopment by public asset corporations, in partnership with the private sector, millions of new homes and apartments could be built at price points affordable to people across many income levels.