The Trump administration is seeking to either sell or terminate leases on numerous vacant federal buildings. This move is timely as developers are interested in acquiring empty office structures for conversion into apartments and condominiums. It presents an opportunity for a mutually beneficial solution – addressing both the surplus of vacant federal office buildings and the housing shortage. 

The General Services Administration (GSA), responsible for managing federal properties and assets, holds significant real estate. According to the agency, the GSA’s portfolio entails around 370 million square feet of space spread across the U.S. and eight territories, comprising 1,700 owned and 6,700 leased office buildings, courthouses, land ports of entry, laboratories, and other workplace facilities. 

The Government Accountability Office (GAO) reveals that the government annually spends $2 billion to operate and maintain its owned buildings, in addition to another $5 billion on leasing office spaces. Despite being scattered nationwide, these buildings are mostly vacant or underutilized and often inadequately maintained. 

For instance, GAO highlights that by early 2023, “17 out of 24 federal agencies were utilizing an average of 25 percent or less of their headquarters buildings’ capacity.” Other agencies reported utilization rates ranging from 39 to 49 percent. These percentages are likely to decrease further post the Department of Government Efficiency’s (DOGE) actions to downsize the federal workforce, even if employees are mandated to return to the office full-time. 

Reported by the Wall Street Journal, the plans of the Trump administration include selling two-thirds of the federal government’s office properties to the private sector and potentially terminating several leases. These days, developers are acquiring empty buildings, especially downtown, and transforming them into residential units, catering to those working or desiring proximity to city centers. This revitalization has facilitated the return of small businesses aiding the local economy. 

If federal buildings go on sale at reasonable prices, developers are likely to seize the opportunity to repurpose them effectively. However, some considerations must be taken into account. Firstly, the buildings should be auctioned at minimal or no reserve to avoid hindering transactions with high asking prices. 

Furthermore, property improvements and renovations may be necessary for developers interested in converting them for housing purposes. Therefore, a favorable purchase price would mitigate financial risks for developers. By divesting the properties, the government can relieve itself of a financial burden and provide a revenue source for state and local authorities through property taxes levied on private owners. 

Progressive groups may advocate for subsidies and more regulations on housing conversion projects; however, easing regulatory constraints could encourage timely progress. While local governments may opt for incentives to support developers, it is recommended that the federal government simply sell off the properties. 

While past attempts to sell federal office buildings met limited success, a well-executed strategy this time could save the government money and offer millions of Americans access to affordable housing.