The Future of Walter Reed

The federal government has decided it wants to give up 62.5 acres worth of the former Walter Reed Medical Center site. You might think this means the land will be sold to whoever wants it badly enough to offer a lot of money, but as Eric Fidler explains that’s not how it works:

One would expect DC to auction the site to the highest private bidder, but the federal base closure process requires proposals from government agencies or non-profits. The “public benefit conveyance” (PBC) requires using the land for homeless assistance, parks, recreation, wildlife conservation, lighthouses, historic monuments, education, public health, jails, law enforcement facilities, HUD self-help programs, airports, seaports, veterans cemeteries, or emergency management facilities, among other uses.

This strikes me as a kind of misguided policy. Would the public really benefit from from a jail than from a bunch of stores? Non-profit organizations normally operate in the same marketplace as everyone else. CAP, for example, rents space in an office building that also rents space to fore-profit firms and so do all the other many, many, many non-profit advocacy groups in DC. Which isn’t to say the government doesn’t do anything for us—the American tax code implicitly subsidizes a wide array of non-profit activities in a way that’s important to the overall U.S. social model. But it’s not at all obvious to me that setting aside parcels of land for non-profit use is necessarily more socially beneficial than just letting it be used for whatever the market wants. Among other things, the city could use the revenue obtained by selling the land to finance its provision of social services. And the creation of market-rate housing and/or commercial enterprises would generate enduring tax revenue streams that likewise would fund public services.