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

Hearing

"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."

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