The General Services Administration said it’s on a path to “optimizing” federal real estate — and that means, in part, shrinking any office space made redundant by telework. But Congress’s inability to pass a budget is throwing up roadblocks for the U.S. government’s biggest landlord.

GSA plans to shed as many as 23 buildings from its portfolio, including the former headquarters of the U.S. Department of Homeland Security in Washington, D.C.

Administrator Robin Carnahan expects this effort to reduce 3.5 million square feet from GSA’s vast holdings, saving taxpayers roughly $1 billion over 10 years.

On Tuesday, Carnahan again reiterated that her agency intends to help agencies reevaluate their allocated space in the years ahead, but it needs money upfront and longterm to do so. Congress has pressured GSA to scrutinize how space is being used, especially in the face of sustained hybrid work, and wants to know why it hasn’t moved on those initiatives sooner.

The building complex that once housed the U.S. Department of Homeland Security in Washington, D.C. (AP Photo/Susan Walsh)

“Approximately half of the value of our leased portfolio is expiring within the next five years, and we can seize this opportunity to further reduce unneeded space, but only if we are able to make the necessary investments in our owned portfolio,” she said during a House oversight hearing Tuesday. Officials said GSA has received just 40% of what it sought for consolidation in the last decade.

GSA and other stakeholders also have yet to address recommendations to improve the often lengthy real estate disposal process that is hampered by statutory and regulatory requirements, lack of capital and limited data, according to the Government Accountability Office’s June assessment.

Carnahan said budget and staffing constraints have prevented the agency from maintaining aging buildings and consolidating space to accommodate hybrid work, as more than two-thirds of federal employees are still teleworking at least occasionally, according to a governmentwide survey published this month.

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GSA has experimented with shared workplaces, among other strategies, to reflect that not every federal employee is working in an assigned cubicle everyday.

Meanwhile, House Republicans have looked to codify in-person work requirements in legislation, and made a point of calling attention to a previous watchdog report that found federal office space is sitting empty at most agencies.

“It’s past time for the government to join hardworking Americans across our country and return to in-person,” said Rep. Jake LaTurner, R-Kansas, at the hearing.

D.C. Mayor Muriel Bowser, a Democrat, is also urging the Biden administration to order federal workers back to their offices.

Outside experts have said there has never been an expectation of 100% full-time occupancy, even pre-pandemic.

Budget uncertainty remains

The House’s version of the $25 billion Financial Services-General Government bill, which funds GSA, proposed cutting $715 million from the Federal Buildings Fund.

“If you’re a business and you have two locations and decide it’s time to shrink into one, you usually need a little bit of money to maybe upgrade and modernize, or change and reconfigure the one building that you’re going to bring everybody into,” Carnahan said. “That’s exactly what we’re talking about here.”

Access to money in the buildings fund is the single greatest impediment to GSA’s ability to improve its real estate inventory, she said. That problem could be solved by ensuring the Federal Buildings Fund, into which agencies pay rent and out of which GSA funds maintenance, is not being siphoned off, as it has been since 2011, Carnahan said.

Long-term planning for the agency may also be constrained by the yet-unfinished budget process for this fiscal year, which began Oct. 1. For example, with a site selected for the new Federal Bureau of Investigations headquarters, the Biden administration predicts the total project to require $233 million each year over 15 years.

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GSA’s appropriations bill was pulled from the House floor last week over a lack of support, the Associated Press reported.

With many of the individual funding bills still in limbo, the House passed a two-step continuing resolution Tuesday that now awaits approval from the Senate. Under that plan, funding for GSA and other agencies covered by the Financial Services and General Government appropriations would be extended through Feb. 2, after which another shutdown could be possible.

“Real estate is a long-term thing. When you’re buying a house or buying a piece of property, you don’t do that overnight,” Carnahan said. “You have to plan your finances to make sure that works. Not having clarity about what a budget’s going to be is and kicking the can down the road to the next year doesn’t make the costs go down.”

Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.

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