Your Tax Dollars…Down the Drain: Taxpayers Spend Billions on Unused Federal Property

Washington, D.C. – March 3, 2014 – (RealEstateRama) — U.S. Senator Rob Portman (R-Ohio) today released the following statement in a monthly series highlighting Washington’s wasteful spending during a time of record debt and deficits:

Last fall, a prominent Democrat lawmaker told CNN there is no more waste in the federal budget left to cut. Yet merely strolling federal buildings is sometimes all it takes to discover government waste.

The federal government holds 77,700 buildings that it classifies as not fully utilized. Many of these buildings are totally vacant, while others are partially used with additional space that could be rented out. Still others are in conditions better suited for demolition.

Rather than sell, rent out, or demolish these properties, however, Washington spends $1.67 billion annually operating and maintaining them. Why? Because it has enacted a series of roadblocks that makes unloading these properties nearly impossible.

“With Washington running pushing the national debt over $17 trillion, you would think such a commonsense initiative as selling, renting, or demolishing unused federal property would be a no-brainer,” said Portman. “Instead of selling off expensive real estate that the government does not need and cannot afford, the federal government is wasting your tax dollars and adding to our soaring spending and debt by maintaining under-utilized and vacant buildings.”

According to the Congressional Research Service, an agency looking to unload unneeded property must first offer it to state and local governments as well as qualified nonprofit organizations – often at a discounted price or even for free. If that fails, a lengthy and cumbersome process must be undertaken before the building can be listed for sale on the open market or demolished.

For example, rent still must be paid on these properties for as much as two additional years while it is screened for potential homeless use (even if the property is clearly unsafe and certain to be demolished). Several years may also be needed for the environmental impact and historic preservation assessments. From there, agencies may face billions of dollars in extensive repairs and renovations including for some buildings that will end up demolished. If a vacant building is finally selected for demolition, the agency is then faced with deconstruction and cleanup costs that can be more expensive (in the short-run) than simply continuing to pay rent on the property.

In addition to these costs, the General Services Administration (GSA), which oversees much of the federal government’s property, now leases more property than it owns – even though leasing costs Washington (per average square foot) nearly three times as much as purchasing the property. In fact, a few years ago, GSA had spent $40.3 million more leasing a building than it would have cost to purchase it outright.

Taxpayers should remember this next time someone claims there is no more waste to cut.

Portman is a cosponsor of S. 1398, the Federal Real Property Asset Management Reform Act of 2013, which he authored in the previous Congress.  The bipartisan legislation has passed out of committee but has yet to be considered by the full Senate. The bill requires agencies to maintain an up-to-date inventory of real property, establishes a Federal Real Property Council to develop guidance and ensure the implementation of strategies for better managing federal real property, and authorizes a pilot program to expedite the disposal of surplus real property.”