“Alarming”, “not sustainable”, and “not fiscally responsible” were just a few of the reactions by Committee chairman Sen. Tom Carper to a recent Government Accountability Office (GAO) report that has revealed huge wastes in the federal government’s huge nationwide real estate portfolio.

The GAO study found that 17 of 24 agencies sampled were using as little as 25% of their key federal buildings and, in one building, GAO estimated that only 67% of building capacity would be used even if all assigned staff entered the building at the same time. The report is a blow to the Biden Administration, which has invested heavily to ensure federal buildings lead the nation in terms of sustainability.

At first glance, the underutilization of federal buildings reflects a universal pattern of underutilization of all commercial buildings since the COVID-19 pandemic. Since 2020, remote and hybrid work trends have accelerated across all industries and geographies, and that includes the US government. As of March 2023, offices saw a global average occupancy of 33%, according to the Freespace Index, a monthly analysis of workplace trends using anonymized data from over 100,000 occupancy sensors in offices around the world.

“More government employees have been working remotely since the COVID-19 pandemic, catalyzing a renewed focus on the need to modernize the federal real estate portfolio as Americans watch our federal buildings continue to sit empty,” Senator Shelley Moore Capito said. “Each year, it costs billions of taxpayer dollars to operate and maintain these federal buildings, regardless of their utilization. This is simply unacceptable.”

However, the sheer scale of the federal real estate portfolio and the intensity of the spotlight placed on the federal government drives this issue, while legal commitments and the responsibility to govern in every corner of the country impedes logical solutions. As commercial property owners gradually downsize, repurpose, and dispose of unnecessary space, the federal government faces a range of long-term leasing issues and a growing portfolio of wholly-owned stranded assets.

Despite the magnitude of the pandemic and its impact on society, these are not new problems for the federal government according to many in the US Senate. “Federal property management has been on the high-risk list for GAO for 20 years,” said Senator Pete Ricketts. “So, this is an ongoing issue, not just an issue created by the pandemic. And certainly, remote work is one of the contributors to the lack of utilization of office space.”

Factors Impacting Federal Buildings "Waste"

Discussions are not just about wasted space either, concerns have also been raised around wasteful resource utilization in federal buildings too —a problem that is exacerbated by the fact that many of these inefficient buildings are also largely unoccupied. “Committees have done a lot of legislative work to support policies that will reduce emissions. I would be interested to know the emissions associated with heating and cooling these buildings that are unoccupied,” added Senator Capito.

The vast majority of this criticism will fall on the shoulders of the General Service Administration (GSA) who, despite recent remarks, have been largely praised for their cost-saving and sustainability initiatives in the previous decade. In our late-2022 podcast, Ana Rawson, the Director of Facility Technology and Innovation at the GSA, told Memoori about average annual savings of up to $283,000 per building. While landmark GSA projects have presented a sustainable image of federal buildings in general.

The new GAO report takes the shine off these GSA achievements and focuses all the attention on the wastefulness of federal real estate, with no clear short-term solutions available. A policy of downsizing federal buildings is fraught with challenges and upgrading federal building efficiency at scale will take time, while remote/hybrid work trends show no signs of abating, leaving the waste to continue.

Participants in the Senate Committee on Environment and Public Works hearing on September 27th, 2023, were only able to find solace in the fact that just over half of GSA-managed leases are set to expire by 2027. Senator Carper citing GSA reports that consolidation at Homeland Security, for example, will reduce the agency’s footprint by more than 1.2 million square feet in the Washington DC area alone and save taxpayers $1.3 billion over the next 30 years.

Senator Capito, meanwhile, recommended that federal agencies should re-identify their future space needs to help the GSA evaluate lease options or invest appropriately in existing buildings. “Providing these agencies with better benchmarks regarding space and an understanding of what full utilization is would help” with efforts to course-correct and right-size the federal real estate portfolio, she said.

David Marroni, GAO’s acting director of physical infrastructure, supported Capito’s approach, pointing to the importance of having more consistent benchmarks and targets for measuring and determining space utilization. “That involves developing more uniform standards for space measurement and assessing what constitutes full utilization rather than using a one-size-fits-all approach”, he concluded at the hearing last month.