House Committee Grills Federal Real Estate Leaders On Low Office Usage

The question of what to do with underutilized federal buildings was the subject of debate on Capitol Hill Thursday, after a government report found that a majority of the agencies it surveyed used 25% or less of their headquarters buildings. 

“The taxpayer is quite literally paying to keep the lights on even when no one is home,” said Rep. Scott Perry, a Republican from Pennsylvania who chairs the Subcommittee on Economic Development, Public Buildings, and Emergency Management, at the hearing.

The study by the Government Accountability Office released Thursday found that of 24 federal agency headquarters it analyzed between January and March, 17 agencies left three-quarters of their space unused.

Those utilization rates represent the percentage of the maximum possible capacity an agency can fill in its building based on the standard workplace densities, rather than the percentage of people assigned to a building who are coming in daily.

In the case of the Small Business Administration, for example, the report found that even if all workers came in on a single day, the agency would only use 67% of its headquarters space. In reality, it is using less than 15% of its space, according to the report. 

The agencies with the lowest space utilization included SBA, the Department of Agriculture, the Department of Housing and Urban Development, the General Services Administration, the Office of Personnel Management and the Social Security Administration. 

It’s a challenge that predated the pandemic, but one that has been exacerbated by the shift toward work-from-home and hybrid trends, said GAO acting Director of Physical Infrastructure David Marroni, who testified at the hearing. 

Federal agencies have been slow to bring employees back despite calls from some members of Congress, plus local D.C. officials and business leaders, to return to normal in-office levels. 

"Let’s be clear, this goes beyond bringing federal agencies back to the office, because even before Covid we knew this was an issue," Perry said. 

Technology-driven increases in efficiency allowed the government to cut the number of staff in its headquarters, and as physical storage spaces became less crucial with computerization, the GSA lagged in reducing federal agency footprints in line with the decreased need. 

Nationwide, the federal government owns 511M SF of office space and leases another 180M SF, according to the report. 

Federal property management has been on GAO’s high-risk list for 20 years, Marroni said. 

“Post-pandemic, we have a particular need to refocus and to make some hard decisions about what space we need,” Marroni said. 

In 2015, the federal government embarked on a strategy to cut footprints across agencies. 

Multiple consolidations have occurred recently or are in the pipeline. The Patent and Trademark Office last year reduced its footprint by 800K SF at its Alexandria headquarters, and the Department of Justice is looking to reduce its footprint at one D.C. office building by about 30% after its lease expires in 2025. 

The government is feeling the pressure to consolidate its unused leased space. More than half of its leases, accounting for more than 83M SF, have expiration dates between this year and 2027. 

“Agencies do need to make decisions now, soon, about how much space they need,” Marroni said. 

GSA Public Buildings Service Commissioner Nina Albert said that as agencies complete their work evaluation reports, which began in 2021, the GSA is “prepared to leverage its expertise to help agencies optimize their real estate needs." 

She also urged Congress to approve her agency’s 2024 budget request, which would give the GSA increased authority over its own funds as well as add $2.3B to its capital program. 

Albert argued that the requests are “critical to both modernizing as well as rightsizing the federal footprint.” 

She noted that 13 out of the 17 capital projects in the GSA’s 2024 budget are resubmissions from years earlier, delays that she noted cost the government an additional $300M.

“It is far more fiscally responsible to fund this work rather than to delay these projects,” she said. 

Subcommittee members expressed frustration about the pace at which the GSA is moving. 

“Do we have an expected timeline? When should those be finished? When should we expect we’re going to get the answers, not ‘we’re working on it, we’re working on it?” asked Rep. Lori Chavez-DeRemer, a Republican representing Oregon. 

Marroni said the GAO agrees on the need for urgency, given the number of steps it will take to evaluate, make a plan and rightsize properties. 

“I think that’s important for the agencies to say, what is their timeline, for OMB to say what are our targets,” Marroni said. “Once that decision is made, there is time it takes to consolidate space, to dispose of space so there is a tail to this as well which is why decisions soon are important.”