COMMENTARY: Choking Las Vegas

The federal government owns approximately 90 percent of the land in Clark County. For the nearly 2.3 million residents of the Las Vegas Valley, that single statistic explains more about why housing is unaffordable, why builders cannot build and why the American Dream feels increasingly out of reach than any interest rate hike or zoning dispute ever could.

And the Bureau of Land Management, the agency entrusted with managing that land in the public interest, is making it worse — not better — through a deliberate policy of rationing supply and extracting maximum revenue from every acre it deigns to release.

On Feb. 23, the BLM issued a Notice of Realty Action announcing the first land sale under the Southern Nevada Public Land Management Act in more than two years. Two years of zero supply from the largest landowner in the valley while demand for housing, commercial development and infrastructure has only intensified. The scale of the offering tells the story.

The BLM is releasing 22 parcels totaling a mere 232 acres. To put that in perspective, Clark County encompasses more than 5 million acres of federally managed land. The BLM’s offering represents 0.005 percent of its holdings — a rounding error dressed up as a land sale. These are not large parcels suitable for master-planned communities, industrial parks or the kind of development that creates jobs and houses families. They are small, fragmented lots — precisely the kind of offering designed to generate bidding wars among desperate buyers while doing nothing to meaningfully expand the valley’s developable land base.

What the BLM is doing in Southern Nevada would be illegal if done by any private entity. It controls the overwhelming majority of land in one of the fastest-growing metropolitan areas in America, and it releases that land in quantities so small they cannot possibly meet demand. The result is predictable: artificially inflated prices that flow directly to federal coffers.

With appraised fair market values estimated between $400,000 and $600,000-plus per acre — and actual sale prices expected to exceed those figures — the BLM is not simply disposing of surplus federal land. It is operating as a monopolist, rationing supply to maximize per-unit revenue at the direct expense of Southern Nevada families, businesses and communities.

If a private landowner controlled 90 percent of the developable land in a major metropolitan area and refused to sell more than a fraction of a percent every two years, antitrust regulators would be at their door. But the BLM answers to no such authority, and the people of Clark County have no meaningful alternative supplier.

As if rationing supply were not enough, the BLM has added a new financial burden to prospective purchasers. For this sale, the bureau has contracted with a private firm, Efficient Markets, to conduct the auction online. The use of a contractor is not, in itself, objectionable — the General Services Administration previously handled these auctions, and modernizing the process through a qualified vendor is reasonable. What is not reasonable is requiring successful bidders to pay a 1.5 percent commission fee directly to Efficient Markets on top of the full appraised fair market value of the land.

Based on the BLM’s own appraisals, this means purchasers will be forced to pay an estimated $1.4 million to $2 million or more in auction fees — money that goes not a private contractor for administering a sale. This fee is not only burdensome, it is unnecessary and arguably unlawful under the very statute that governs these sales.

The Southern Nevada Public Land Management Act (SNPLMA) explicitly authorizes the reimbursement of costs incurred by local BLM offices in arranging sales and exchanges — including contractor costs — from the law’s Special Account. Congress anticipated that conducting these sales would cost money and provided a dedicated funding mechanism so that those costs would not be passed on to buyers. That Special Account currently holds more than $1 billion.

Read that again.

The BLM is sitting on more than $1 billion in accumulated sale proceeds — funds explicitly designated, in part, for covering the costs of future sales — and yet it has chosen to impose those costs directly on purchasers. There is no fiscal justification for this decision. There is no statutory requirement. There is only the BLM’s apparent preference for extracting every possible dollar from the private parties who have no choice but to participate in its monopoly auction if they want to build anything in Clark County.

The people who ultimately bear these costs are not faceless corporations. They are homebuilders who pass increased land costs on to buyers. They are the young families priced out of their first home. They are the small businesses that cannot afford to expand because commercial land in the valley is artificially scarce and prohibitively expensive.

Southern Nevada’s housing affordability crisis has many causes, but none is more fundamental than the simple fact that the federal government controls the land supply and refuses to release it in quantities that reflect actual demand.

Every dollar added to the cost of land acquisition — whether through inflated per-acre prices driven by artificial scarcity or through gratuitous auction fees the BLM could easily absorb — is a dollar added to the cost of a home, a storefront or a school.

Three reforms are urgently needed.

First, the BLM must dramatically increase the volume and frequency of land sales under the SNPLMA. Releasing 232 acres every two years in a metropolitan area of 2.3 million people is not land management — it is land hoarding. The bureau should be conducting quarterly sales of meaningful acreage, including larger parcels suitable for residential and commercial master planning.

Second, the BLM must immediately eliminate the practice of imposing auction contractor fees on purchasers. The law’s Special Account exists precisely to cover these costs. With more than $1 billion available, there is no legitimate reason to burden buyers with fees that Congress intended the account to absorb.

Third, Congress and Nevada’s elected officials must exercise meaningful oversight of the BLM’s administration of the public lands act. The act was passed to benefit Southern Nevada by converting federal land into community assets — parks, schools, infrastructure and affordable development. The BLM has instead turned it into a revenue-maximization scheme that treats Clark County residents as captive customers rather than the intended beneficiaries of the law.

The BLM’s management of public land in Southern Nevada has become a case study in how a federal monopoly can distort an entire regional economy. By controlling 90 percent of the land, selling virtually none of it (and offering only tiny parcels when it does), and now layering on contractor fees it has the funds to cover, the bureau has positioned itself as the single greatest barrier to growth and affordability in the Las Vegas Valley.

The people of Southern Nevada deserve better. They deserve a land management agency that recognizes its obligation to serve the public interest — not one that behaves like a monopolist squeezing every last dollar from a captive market. Until the BLM changes course, or until Congress compels it to, the families of Clark County will continue to pay the price for Washington’s indifference.

Mike Ford worked for the Bureau of Land Management for 25 years and is now a public land consultant. He writes from Las Vegas.