Federal Real Property: Buried Alive! | Citizens Against Government Waste

Federal Real Property: Buried Alive!

The WasteWatcher

When it comes to property management, the federal government is a bit of a pack rat. It likes to purchase and hoard a lot of real estate. Due to a combination of bad incentives and typical government bloat, selling real estate is a long, costly process. As a result, Uncle Sam owns more real property than any other entity in America: 900,000 buildings and structures covering 3.38 billion square feet. The Office of Management and Budget estimates that 55,000 properties are underutilized or entirely vacant, costing taxpayers $1.66 billion to maintain each year. That is probably too much stuff to cram into an hour-long “Hoarders” episode, but it should still be brought to the public’s attention.

CAGW has supported the sale of excess government property since its inception in 1984. Both parties in Washington agree on the need to put excess properties on the auction block, yet no one has done so effectively. President George W. Bush established the General Services Administration’s (GSA) Federal Real Property Council in an effort to “promote the efficient and economical use” of federal real property assets, but little progress was made. In 2007, Sens. Tom Coburn (R-Okla.) and Tom Carper (D-Del.) introduced legislation that would have established a pilot program for the expedited disposal of federal real property, but the bill died in committee. Most recently, President Obama has proposed creating an advisory board that would have three years to identify $15 billion in buildings for sale, consolidation, or reconfiguring by 2014. In other words, shedding the real property fat has been a bipartisan failure.

As the Government Accountability Office (GAO) explained in a February, 2001 report, several competing interests often prevent the sale of federal property. They include “local governments; business interests … private sector construction and leasing firms; historic preservation organizations; various advocacy groups for citizens that benefit from or used federal programs; and the public in general.” But the most obvious reason for the government’s stockpile of unused buildings is the method by which those properties get sold.

When the GSA’s Public Buildings Service reports a property excess, that property must first – like a baseball player on waivers – be screened for use by other federal agencies. If another agency wants it, they get it. If the property goes unclaimed, according to Title 40 of the United States Code and the McKinney-Vento Homeless Assistance Act it must then be screened for use by providers of homeless shelters, who get the property for free if they so desire. If no homeless shelter providers want the property, it gets screened for other public uses and sold for up to a 100 percent discount of market value. Finally, if no public use can be identified, the property is auctioned and sold to the highest bidder.

This process is backwards. Providing homeless shelters and buildings for public use may be worthy efforts, but placing them in the way of the government’s ability to sell properties worth billions of dollars to the highest bidder seems almost intentionally wasteful.

Prioritizing the public auction of unused federal real property would go a long way toward efficiently allocating a huge amount of real estate across America, and it would reduce the $1.6 trillion federal deficit. A great place to start would to exempt future federal property sales from the provisions of the Homeless Assistance Act. President Obama should be commended for his $15 billion initiative, but unless it changes the incentives faced by government when it comes time to move some property, those savings are likely to be at best a temporary fix.

-- Luke Gelber

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