Half of the agencies recently acknowledged they had excess space in their headquarters prior to the pandemic. Thomas Barwick/Getty Images
Post-pandemic, most agency headquarters are only one-quarter full
Agency officials say they are worried telework policies will change and therefore they must retain their underutilized buildings.
A majority of major federal agencies are seeing their headquarters buildings at 25% of capacity or less, according to a new report, while none are more than half full.
Agencies are so far reluctant to adjust their real estate footprints despite a sharp reduction in building utilization, the Government Accountability Office found in its report, as they confront insufficient funding for change and a fear of a change in remote work policies. At a hearing before the panel of the House Transportation and Infrastructure Committee on Thursday, lawmakers implored the Biden administration and individual agencies to take a more aggressive approach in offloading or redesigning their properties.
GAO analyzed data at the 24 agencies that occupy 98% of federal property, examining a three-week sample period across January, February and March 2023. Seventeen of those had just 25% of their headquarters filled. The six agencies that used their headquarters buildings the most were still less than half full, GAO found, with their usage rates ranging from 39% to 49% of their capacities.
The auditors identified several factors preventing agencies from realizing cost savings that would come along with more efficient building use, including a lack of funding, a reluctance to share headquarters space with other components and agencies and concerns about future changes to telework policies. GAO noted the buildings they visited were outdated and ill-suited for modern needs, while some agencies voiced concerns their headquarters were too historic in their designs for renovations that would accommodate a hybrid workforce.
While agencies are currently in the process of bringing more employees back to their offices, all 24 in GAO’s review said they had already completed an initial return-to-office transition. Half of the agencies recently acknowledged they had excess space in their headquarters prior to the pandemic.
David Marroni, acting director for GAO's physical infrastructure team, told lawmakers the current situation presented an opening for rethinking the federal government’s real estate portfolio and identifying cost savings. GAO noted agencies’ underutilization of space carries financial, environmental and opportunity costs.
“While all agencies have resumed in-person operations, it is clear that the federal workplace has evolved as agencies have embraced hybrid and remote office environments,” Marroni said. “This moment presents a unique opportunity to reconsider various aspects of the federal government’s real property portfolio and how best to align the portfolio with future needs.”
Rep. Scott Perry, R-Pa., who chairs the Economic Development, Public Buildings, and Emergency Management Subcommittee that held Thursday’s hearing, noted the COVID-19 pandemic heightened a longstanding issue. GAO has placed the government’s real property management on its “high-risk list” for the last 20 years.
“Federal real property continues to be on the GAO’s high-risk list and, even before COVID, we had far too much empty space in our portfolio,” Perry said. “Unfortunately, the ongoing telework policies have only exacerbated this problem.”
He called GAO’s findings “quite honestly devastating,” adding he generally believes “if agencies aren’t using their space, they should lose it.”
Nina Albert, commissioner of the General Services Administration's Public Buildings Service, said her agency was not necessarily looking to decrease federally owned space, but instead examine the individual needs of each agency. She asked Congress for more legislative latitude in disposing of unneeded buildings, saying it would enable GSA to help agencies "right-size their portfolios" by providing them the necessary resources. She previously told Congress there now exists an opportunity to have “fewer buildings and better buildings.”
Marroni said agencies must first determine their permanent telework policies so they can then decide how much time they need. At that point, he said, they can start to make big decisions.
“Do they need a headquarters building anymore?” Marroni said. “Are there areas to consolidate? Are there bureaus within their departments where they can share space and therefore have better utilization?”
Officials involved in the process recently told lawmakers a clash between the Biden administration and a new board designed to recommend buildings ripe for disposal, coupled with insufficient resources and red tape, has delayed a process Congress created to unload property. President Biden has requested $28 billion to revamp federal buildings and Congress provided $3.4 billion for that purpose as part of the Inflation Reduction Act.