Several proposals pending in Congress would either encourage or force agencies to sell off spaces with an average occupancy rate of less than 60 percent, based on a benchmark of 150 usable square feet per person. Image: Gill Thompson/Shutterstock.com

The OMB’s latest report to Congress on telework and government real estate ownership does not include data on office space utilization – a key factor in Congress’s efforts to reduce such space. But it does offer some insight into the extent of the problem. Among other things, it shows that only 1 percent of spending on rent, operations, and maintenance is spent on space that is considered “underutilized.”

According to the report, the annual cost of office space in the Federal Real Property Profile – a listing of office space owned or leased by the government, excluding facilities exempt from disclosure for national security reasons – is $8.1 billion. This includes $2 billion in operating and maintenance costs for owned buildings, $1.3 billion in operating and maintenance costs for leased buildings and $4.8 billion in lease costs.

“Office space reported as ‘underutilized’ in the FRPP includes both owned and leased office space. There is 23.280 million square feet of underutilized owned office space with annual operating and maintenance costs of $67.169 million. The portfolio includes 0.766 million square feet of underutilized leased space with annual operating and maintenance costs of $0.481 million and annual rental costs of $13.696 million. The total cost of owned and leased office space reported as ‘underutilized’ in the FRPP is therefore $81.346 million, approximately one percent of the total cost of owned and leased office space,” it said.

According to the Federal Real Property Council’s guidelines for agencies, a property is considered “underused” when “an entire property or a portion thereof, with or without improvements, is used by the responsible land holding agency only on an intermittent or intermittent basis for ongoing program purposes of that agency or is used for ongoing program purposes that can be accomplished with only a portion of the property.”

That’s a different measure than office space utilization, which underlies efforts to get agencies to consolidate their offices, reduce their leased space, and possibly sell government buildings in light of the reduced on-site workloads triggered by the pandemic and persisting since its end. Those efforts were ramped up after a 2023 GAO report found that 17 of 24 major agency headquarters in the Capital Region were less than 25 percent occupied on average, with some as low as 10 percent.

Several proposals pending in Congress would either require or force agencies to get rid of spaces with an average occupancy rate below 60 percent (based on a benchmark of 150 usable square feet per person).

The OMB report states: “No data is currently collected to calculate average office space occupancy, but OMB is developing occupancy metrics that will require the calculation of annual average occupancy in the near future.”

However, the report points out that even with this data, current practices may not result in space reduction.

“It is important to note that ‘under-utilised’ office space is often required by one or more agencies at a particular location. The cost of maintaining an owned asset that is no longer being used to capacity, for example due to staff reductions, may be a more cost-effective solution than building a smaller building that would be fully utilised or leasing commercial office space (assuming commercial space is available at the required location),” it says.

Two dozen ministries and major independent agencies also listed their space reduction strategies in the report, but these were generally linked to long-term initiatives to “reduce space requirements” rather than to reducing on-site labour intensity.

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