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The following is one article in my multi-article “Policy reform advice for the Trump Administration” series. I would recommend reading the first article in the series, if you have not yet done so.
Back on Jan 24, 2024, I published an article that you probably missed. It was entitled: “We need a Homestead Act 2.0: Let's rediscover an American classic that can create affordable housing.”
You can read the old article now, or you can wait to read it below after this introduction. The article is classic Progress Studies:
Study the past and copy what worked in the past to solve today’s problems.
In this case, use a modernized version of the 19th Century Homestead Acts to create affordable housing for all working Americans.
Though I published this Substack article on Jan 24, 2024, but I actually wrote the content almost three years earlier. I originally wrote this excerpt in the summer of 2021 as part of my second book, Promoting Progress: A Radical New Agenda to Create Abundance for All.
Ironically, I almost did not include this section in my book because I thought the idea seemed a little too “far out.” Affordable housing is one of the most important policy goals of the Progress movement, and it makes sense to build houses in urban areas where people are already living. Given the dangerous web of federal, state, and especially local regulations, doing so would be very difficult.
The only real way to break the deadlock would be to construct new cities on empty land. Given the enormous tracts of virtually empty federal Bureau of Land Management lands, this seemed like the obvious place to start.
Fortunately, I decided to leave this section in the book, but I really had very little confidence that the idea would be taken seriously. In fact, of all of the policy proposals in my book proposals, the Homestead Act 2.0 was the one I thought was the least likely to actually get implemented.
After the summer of 2021, I kind of forgot about my proposal, and I thought that was likely the end of it until…
<Queue the “Eye of the Tiger” song by Survivor at Volume 11>
Enter The Donald…
Two years later, I almost spit up my morning coffee when I saw this CNN headline:
Donald Trump’s “Freedom City” plan was shockingly similar to my original Homestead 2.0 proposal from two years earlier. I do not claim that Trump read my book, or that no one else thought of the idea first, but I know for sure that I had never heard anyone publicly propose a similar idea before 2021.
The biggest differences between my proposal and Trump’s Freedom City proposal is that:
I deliberately modeled my proposal on the original Homestead Acts.
I do not see any evidence that Trump did (although maybe I am incorrect on this point). My guess is that he got the idea from his real-world experience in commercial building construction.I proposed that we should go fast with urban design, but slow with implementation.
Start with the suburbs of Las Vegas, which is the only major metro with large tracts of federal land surrounding it.
If construction around Las Vegas works, found a second Homestead city somewhere along Highway 80 in Nevada.
If that works, then found many more Homestead cities on federal lands in the Mountain West.
In typical Trump style, The Donald wants to build 10 Freedom Cities.
For political reasons, Trump’s plan may be better.
Trump’s plan takes advantage of a Republican Trifecta in the federal government that may not last more than 2 years. Trump’s plan is also a high-stakes gamble as the idea may not work.
I generally prefer to run prototypes, ideally via Randomized Controlled Trials (RCT) before scaling up a new government program. I believe that constructing new cities in sequence is likely to promote learning while doing to lower the risk of massive failure.
Donald Trump’s life philosophy is: “Go Big, or Go Home!”
Below is the original content from my book with only light edits and added graphics…
The original post was part of a multi-post series on Housing:
Below is an excerpt from my second book Promoting Progress: A Radical New Agenda to Create Abundance for All. You can order my e-books at a discounted price at my website, or you can purchase full-price ebooks, paperback, or hardcovers on Amazon.
Other books in my “From Poverty to Progress” book series:
A New Homestead Act
To radically boost home construction, we may need a new Homestead Act. The Homestead Act was passed in 1862 by Abraham Lincoln and the Republican party to encourage westward expansion. It was one of the most important Congressional acts in American history. The Homestead Act divided western lands owned by the federal government into 160-acre plots and made them subject to sale for only $10 as long as the owner lived on that land for 5 years and developed it into a viable home or farm.
While virtually all federal land in the Midwest has been sold off, huge tracts of federal land remain (see map below). Where the geography allows and where there is no unique wild habitat, the federal government should seriously think about founding new cities for settlement. This may seem unusual in the 21st Century, but it is a time-honored American tradition.
Because federal lands are largely in the Mountain West, that is where the new cities should be sited. Fortunately, the Mountain West has seen a massive increase in domestic migration from the unaffordable cities on the Pacific coast. Arizona, Nevada, Idaho, Utah, and Colorado are already some of the fastest-growing states in the Union.
Criteria for 21st Century Homesteading
In line with the original Homestead Act, the new act should enable people who could not otherwise afford land to purchase it for a reasonable price. The federal government should subdivide land into small parcels, just large enough for a single-family residence or duplexes. All purchasers of that land must:
Be an American citizen.
Have never owned a house previously.
Pay $10,000 for the land in equal payments over the next 5 years (or $166 per month) to the federal government.
Promise to pay for the construction of some sort of permanent habitation on their land within the next 5 years. Construction costs can be paid for in the form of a traditional mortgage.
Physically live in that permanent habitation for at least 5 years after the construction is complete.
Not sell the land to another party until after they have resided on that land for the full 5-year residence period.
Not own another house while residing on the land.
We could also potentially require that the family be eligible for the Working Family Tax Credit. This would ensure that the new city is populated by married working families with children.
An overall urban design in line with Shlomo Angel’s guidelines from Planet of Cities could be developed for each Homestead city. While some of the lands would be zoned for transportation corridors, open spaces, industry, and denser urban centers, the bulk of the land could be sold in 5000-square-foot plots.
An initial trial run of the concept could involve selling a large amount of the federal land that surrounds the existing metro area of Las Vegas (see map below). As far as I know, Las Vegas is the largest metro area in America that is largely surrounded by federal land. The boom-bust nature of the Las Vegas real estate market due to it being a tourist city makes this a little tricky, but it seems to be the best location to start.
If the Las Vegas experiment works well, then actual Homestead cities could be founded elsewhere. The exact location of the Homestead cities would be dependent on plenty of water, relatively flat ground for construction, and access to interstate highways.
So how do we do it?
To focus resources and limit the chance of financial boondoggles, the federal government should only establish one Homestead city at a time. Federal lands along the route of Interstate 80 in Nevada would make a good location to start, as it is the biggest single transportation corridor in the region. This land is overwhelmingly sparsely populated range land with little vital environmentally-sensitive habitat. The key constraint would be water, but the area does have large underground aquifers.
The future growth of these new urban areas would suffer from “the chicken or the egg” problem. People would not want to live in these new cities without jobs and basic amenities. Businesses would not want to expand to the area without a strong local market and a reliable pool of labor.
To encourage private investment, businesses, employers, construction companies, and residents should be completely exempted from federal taxes and all but the most essential federal regulations for a period of time. This would effectively create opportunity zones like those that proved so successful in China and other developing nations. Once a city has built its key urban infrastructure, has a solid population base, and is financially sustainable, then a new Homestead city could be founded along the same Interstate 80 corridor.
With a large portion of American employees working from home, it would not be necessary for large businesses to relocate to the metro to create initial employment opportunities. Of course, there would still need to be a substantial number of workers to construct water, sanitation, ground transportation, airports, electrical, and gas infrastructures.
Perhaps any worker who agrees to work for five years on construction sites in a Homestead city would be allowed to purchase their own plot of land. All of this construction of infrastructure would take time, but, with the incentive of cheap land and no taxes, the new cities would probably grow rapidly once the design had been completed.
Owners could choose to pay for the construction costs for any type of permanent structure on their plots of land: single-family residences, duplexes, AUDs, or mobile homes. They could also be allowed to construct retail and commercial space on the land, as long as they maintained their primary residence on the land. Most likely, owners would hire professional construction companies to do the actual construction.
One of the great benefits of my Homestead city proposal is that it would not cost the federal government any money (just like the original Homestead Act). The system would be self-financing by settlers and private businesses that seek to profit from new markets.
So let’s give the Homestead Act a rebirth!
EDIT: And, if you have not yet figured it out:
No, I was only joking about suing Trump for copyright infringement. I am happy when any elected official endorses my idea and runs with it. But let’s see how many trolls flip out in the comments objecting to or cheering on the idea…
Most of the above is an excerpt from my second book Promoting Progress: A Radical New Agenda to Create Abundance for All. You can order my e-books at a discounted price at my website, or you can purchase full-price ebooks, paperback, or hardcovers on Amazon.
Other books in my “From Poverty to Progress” book series:
The original post was part of a multi-post series on Housing:
I assumed Trump’s Freedom Cities was more of an American version of Charter Cities with clean new institutions and regulations. Your focus seems more on housing growth.
A few years ago I commented on a libertarian blog asking why Indian Reservations — with their various exemptions from federal and state regulations — couldn’t be used as a foundation for charter cities. More of a question than an actual suggestion. The libertarians became irate and accused me of literally being a communist. Still not sure why. Only thing I can think of is they saw my idea as a threat to their freedom initiatives in New Hampshire.
Final query: have you ever heard of something called capital homesteading? Or perhaps as the Economic Democracy Act (formerly known as the “Capital Homestead Act”)? I am not entirely sure I understand how this proposal would work, but it seems to involve the government providing some modest contribution to a new born's investment account at birth and the growth/dividends plus yearly additions end up providing a substantial capital base for each new citizen after 20 or more years, for education or retirement or ???. The government's initial capital input is reimbursed after some period and the remaining gains continue to grow.
Sounds like a "something for nothing" scheme and no requirement to demonstrate personal responsibility, but I may be misunderstanding the goal or the means involved.
My original capture of that explanation (in Word) is no longer an active link but these seem to cover the same basic idea, from my search at the Center for Economic and Social Justice web site: https://www.cesj.org/ .
Coalition for Capital Homesteading [2012] https://www.cesj.org/programs/coalition-for-capital-homesteading
Graphic Overview: Financing Green Growth with Capital Ownership Opportunities for Every Citizen [2019] https://www.cesj.org/just-third-way-feature/graphic-overview-financing-green-infrastructure-with-capital-homesteading-for-every-citizen
Capital Credit Insurance and Reinsurance [2015] https://www.cesj.org/learn/economic-democracy-act/capital-credit-insurance-reinsurance