Prior to the disposition of public land for residential lots, whether by sale in fee simple or by lease, in addition to the requirements of section 171-33, the board of land and natural resources shall:
(1) Make a determination of the demand for houselots in the area of the intended disposition;
(2) Make a thorough investigation of the costs of the residential development;
(3) Wherever possible locate the residential development adjacent to an existing urban center;
(4) Subdivide and improve the land, in conformity with county or city and county zoning and subdivision requirements, including the construction of necessary roads; and
(5) Plan the development to meet the economic need and circumstance of the persons for whom the development is intended.