Biden administration pledges to help agencies offload more federal buildings

The Biden administration on Tuesday pledged to ramp up its efforts to unload underutilized federal buildings as agency employees spend less time in their offices, though it cautioned it will first need additional funding from Congress. 

The current underutilization of federal buildings is “concerning,” the federal government’s top real estate official told a panel of the Senate Environment and Public Works Committee, who said the administration is hard at work to “optimize the portfolio.” The Government Accountability Office last year found a majority of agencies maintained headquarters buildings that were filled to just 25% of their capacities or less. 

The General Services Administration, which manages federal real estate, is working with agencies to provide new solutions such as coworking spaces, private-public partnerships and utilization reviews, Public Buildings Service Commissioner Elliot Doomes told senators on the Transportation and Infrastructure Subcommittee. The agency is also asking for a tweak to its funding mechanism that would grant it access to revenue from its leases, as well as an additional $425 million appropriation into a new Optimization Special Emphasis program, that Doomes said would allow the agency to engage in federal building consolidation. 

“That's something as a part of our national portfolio plan that we've been working on to identify buildings that have a significant amount of deferred maintenance, underutilized, and looking at other federal space there to say, ‘where can we do this consolidation?’” Doomes said. 

The government has shed 8 million square feet of real estate over the last four years, but that represents a small fraction of the hundreds of millions of square feet GSA manages. The agency has missed out on 120 missed consolidation opportunities in recent years due to underfunding, Doomes said. 

“It’s progress, but we can do more,” he said of the consolidations to date. 

Sen. Kevin Cramer, R-N.D., the top Republican on the subcommittee, called the federal footprint “too big” and “nearly impossible to shrink.” He noted that 50% of GSA managed leases are set to expire by 2027 and said that presented an opportunity for the federal government to right-size its real estate portfolio. 

“In fact, I just think it'd be derelict not to,” Cramer said. 

Doomes said the decision making process varies by agency, but “the trend is agencies are giving up space.” 

“We're bringing our workspace experts to work with these agencies to say, ‘How often are people in? What kind of work do you do? Maybe you don't need all that space. Let's come back and let's give some of that space back,’” Doomes said. 

If provided the funding that it has requested, he added, GSA can take the lead in financing consolidations. Those often come with upfront costs, but GSA can help agencies amortize those and make the case that footprint reductions would come with operational cost savings. 

“We’re going to have to spend money in order to save some money,” Doomes said. 

He added Congress could further incentivize agencies to get rid of space they do not need by allowing them to keep some of the revenue the government receives from property sales. GSA is also pushing agencies to shrink their square footage by standing up six federal coworking spaces across the country. 

“If you're in a telework posture,” Doomes said, “and you don't need this office space all the time, we'll offer you a place where you can go and you can have your employees meet and work on projects and not be [in a] permanent space.”

Previous efforts to unload federal buildings have run into roadblocks. President Obama in 2016 signed the Federal Assets Sale Transfer Act (FASTA) into law to require GSA and the Office of Management and Budget to better track unneeded federal buildings and streamline the process for disposing of them. The measure created the Public Buildings Reform Board as an independent agency with the sole purpose of reducing the federal government's property inventory.

A clash between the Biden administration and that board, coupled with insufficient resources and red tape, has delayed the process and led to scrapped efforts to offload buildings. 

Congressional Republicans have called on the Biden administration to better utilize federal buildings by forcing employees to work in their offices more frequently. Under current White House policy, agencies are expected to average about 50% in-person work.