Uncle Sam, Slum Lord

Federal government losing money on excess and poorly managed property


The paint flakes off the walls, and white chips dot the floor and stairwells. The stairs’ railing is caked in grime while the radiator in the bathroom sits cockeyed, unconnected from any heating system. A light fixture lies on the floor beside an old water fountain. And the United States Department of Agriculture owns it all.

This building, which sits on a 5,000-acre property near Washington, D.C., is just one example of the many dilapidated, vacant, or underused properties the federal government owns that a House subcommittee will discuss on Wednesday.

The House Oversight and Government Reform Committee’s Government Operations Subcommittee will hold a hearing on the federal government’s management of its real estate assets on Wednesday morning. The hearing follows the Government Accountability Office’s (GAO) recently released high-risk list, which included federal property as one area within the federal government at risk of waste.

The high-risk list highlighted that the government lacks reliable data on its assets and that it relies heavily on leasing, even in places where it owns underused properties.

Leonard Gilroy, director of government reform for the Reason Foundation and a scheduled witness at Wednesday’s hearing, recommended the federal government implement a "robust, real property inventory" of all its properties in an interview with the Free Beacon.

"You have a fragmented system of how that property is managed," he said. According to the GAO, the federal government leases or owns about 400,000 properties, and control of these properties is dispersed throughout dozens of agencies.

"Without the ability to know what government agencies own, it becomes very difficult to manage those assets in the most cost-effective and efficient ways," Gilroy writes in his submitted testimony to the subcommittee.

John Palatiello, executive director of Management Association for Private Photogrammetric Surveyors (MAPPS), an association of geospatial firms, echoed Gilroy’s concern about the government’s lack of an inventory.

"If you don’t know what you own and what you are responsible for … then you’re not doing a good job at being a steward," Palatiello said.

The federal government’s inventory is dispersed throughout its various agencies, are often obsolete and are not "interoperable," he said. He noted that some property inventories are still paper-based.

Federal agencies face a byzantine bureaucracy for dealing with surplus property and its disposal, Palatiello said. Agencies also face legislative requirements for how it deals with property. For example, a law from the 1980s requires federal agencies to give preference to converting excess buildings into homeless shelters before selling them to the private market.

"Those are the kinds of things that Congress needs to reform and streamline," he said.

David Wise, director of the physical infrastructure team at the GAO and another planned witness at Wednesday’s hearing, referred to two reports from 2012 when asked about the two problems the high-risk list raises about the government’s real property management.

The first report, from June 2012, noted problems in the government’s data collection process and provided multiple examples, with pictures, of properties where the government held inaccurate information about the quality or use of a property. The second report highlighted ways the federal government could save money by better using the space it already owns instead of leasing space in the same market.

"A national strategy can guide federal agencies and other stakeholders to systematically identify risks, resources needed to address those risks, and investment priorities when managing federal portfolios," Wise said in written testimony submitted to the subcommittee. "Without a national strategy, the federal government may be ill-equipped to sustain efforts to better manage excess and underutilized property."

The federal government’s poor management of its assets can lead to confusion, Palatiello said.

Palatiello was previously a planning commissioner for Fairfax County. A homebuilder once came to him needing an easement on land owned by the Federal Aviation Administration. The only hitch was that the FAA had no record of the land—only the county did. The land was left over and then forgotten after the FAA built an access road to the Dulles airport.

The White House Office of Management and Budget did not return a request for comment.

Andrew Evans   Email Andrew | Full Bio | RSS
Andrew Evans is an assistant editor at National Affairs and a former reporter for the Washington Free Beacon, where he covered government accountability and healthcare issues.

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