July 13, 2023

Ranking Members Larsen, Titus Statements from Hearing to Examine the Right Sizing Federal Real Estate Portfolio

Washington, D.C. — The following are opening remarks, as prepared for delivery, from Ranking Member of the House Committee on Transportation and Infrastructure Rick Larsen (D-WA) and Ranking Member of the Subcommittee on Economic Development, Public Buildings, and Emergency Management Dina Titus (D-NV) during today’s hearing titled, “When the Lights Are On But No One’s Home: An Examination of Federal Office Space Utilization.”

Video of Larsen’s and Titus’ opening statements can be found here and here.

More information on the hearing can be found here.

Ranking Member Larsen:

Thank you, Chairman Perry and Ranking Member Titus, for holding this important hearing on the utilization of federal office space. 

“Managing federal real property” has been on GAO’s High-Risk list for 20 years.  Access to capital, the lack of reliable real property data for decision-making, and a cumbersome process for disposing of excess and underutilized real estate has made it challenging for GSA to carry out its mission. 

Obama-era “Freeze the Footprint” and “Reduce the Footprint” policies decreased the size of GSA’s portfolio from 8,925 leases to 7,760 leases and 194 million square feet to 180 million square feet. That’s great but I think it shows how difficult it is to dispose of property.  

However, underutilization became even more widespread during the pandemic, even though eight federal agencies made limited reductions to the amount of space they lease.

As the COVID-19 emergency wound down, OMB required agencies to bring staff back into their offices and determine their future space requirements. But the in-office workforce has not returned to pre-pandemic levels due to increased and legitimate use of remote work. 

In this environment—where agencies are unsure of their long-term space needs—GSA faces significant challenges. GSA must decide when to lease space or to increase its owned portfolio and move as many agencies as possible into that owned space. 

These challenges present GSA with an opportunity to improve the size, quality, and utilization of the federal real estate portfolio.

I look forward to learning how GSA is mitigating the financial liability of vacant leased space. Whether GSA knows which of its buildings are cash positive and whether GSA has a list of buildings that should be disposed of over the next five years. 

The Inflation Reduction Act (IRA) provides GSA with $250 million to convert facilities to high-performance green buildings. This is a great opportunity for GSA to build upon previous success in greening our federal facilities. However, we need to know which buildings GSA needs to keep.

I hope to hear from GSA today about how these funds are being used and whether the long-term viability and potential profitability of a building is considered when GSA makes investment decisions.

This hearing is an opportunity to begin discussions about what the federal real estate portfolio should look like in the future and how Congress can help GSA meet some of its challenges. 

I look forward to hearing from today’s witnesses on how to right-size the federal real estate portfolio and to save taxpayer dollars. Thank you.

Ranking Member Titus:

Chairman Perry, thank you for having this hearing.  And I thank our witnesses – Nina Albert, Commissioner of the General Services Administration’s Public Buildings Service, and David Marroni, Acting Director, Physical Infrastructure, at the Government Accountability Office (GAO), both of whom have participated in previous federal real estate hearings and roundtables hosted by this subcommittee. 

Mr. Marroni, I am particularly appreciative of the time and effort that you and your staff have devoted to the topic that we are discussing today.  Were it not for GAO’s 20 years of High-Risk Reports, Congress might not be aware of the challenges GSA has faced in maintaining its owned and leased portfolio.

With the expiration of the COVID-19 health emergency, the use of maximum telework for federal employees ended and OMB directed agencies to update their post-reentry plans. Agencies have begun responding to OMB’s direction, with the Department of Energy, the Environmental Protection Agency, the Federal Deposit Investment Corporation, the Department of Veterans affairs, the Federal Emergency Management Administration, the Department of Education, and the Treasury each publishing increased in-office work requirements. 

But half of GSA’s almost 8,000 leases are expiring within the next three years and GSA has insufficient capital to repair and modernize the 1,500 buildings it owns. 

While some Members of Congress may use this hearing as an opportunity to express their frustration about the use of remote and telework amongst federal agencies, the truth is that the General Services Administration (GSA) does not set federal work policies and does not have the authority to demand that federal employees return to their desks. The frequency of federal employees’ in-person work schedules varies widely and is often determined by department heads or supervisors. GSA provides real estate and real estate services to civilian agencies and helps agencies define their space requirements, but GSA does not establish or implement federal workforce policies.

And even though some agencies are sorting through their in-office policies, the truth is that we are still in the middle of a shift in the real estate market that could take decades to play out. 

But we can’t wait decades. What does GSA need? Authority? Accountability? Funding? How can Congress help GSA during these confusing times?