Selling Government Property

June 30, 2010

The federal government’s real estate portfolio is massive: 1.2 million buildings and other structures with a total annual operating and maintenance budget of $19 billion. That’s quite a carbon footprint.

One of President Obama’s proposals to find budgetary savings is to sell off surplus federal property. The president estimates the savings at $3 billion, but he would plow the savings back into expanding other government programs. A better plan would eliminate entire agencies and sell off their assets.
Regardless, an article in the Fiscal Times shows that the administration is going to have trouble even scrapping the surplus property.
If an agency wants to sell its extra property, the law requires the General Services Administration to first see if another government agency can use it. If not, the GSA is required to offer it to states, local governments, and nonprofit agencies to assist the homeless.
It’s absurd that the government can’t just sell off assets it doesn’t need. The problem is politics of course. Sen. Tom Carper (D-DE) introduced legislation to cut back on giving surplus property to the homeless, but the bill died after a “buzz saw of opposition from advocacy groups.”
According to the Fiscal Times, special interests have long made it difficult to get rid of unneeded federal property: 
The Reagan administration came up with a nifty idea in 1982 for raising money for the cash-strapped federal government: selling off part of the 7,000-acre national Agricultural Research Center. The crop research facility sat astride one of the few undeveloped large tracts in suburban Washington, D.C.
Budget experts boasted that the sale would net the government millions of dollars and that the research could be easily shifted to a less expensive site. But farm groups and the Agriculture Department raised a fuss, and critics of the proposed sale noted that the “Ag Center” was a major attraction for visitors from the farm belt.
This year, the Ag Center celebrated its 100th anniversary, and it is still owned in its entirety by the federal government. 
Members of Congress also put pressure on agencies not to sell properties in order to save government jobs in their districts. According to Sen. John McCain (R-AZ), it has long been a problem.
Although the budgetary savings would be minimal, it’s still an excellent idea to hand over federal property to the private sector where it can be put to better economic use. The article provides a good example: 
For example, consider the Hotel Monaco in the nation’s capital, two blocks from the Verizon Center sports arena. That is the former “Tariff Commission,” a national historic landmark built in 1836 that had fallen into severe disrepair. It was an eyesore until the government negotiated a long-term lease with a hotel company that agreed to preserve its historic character while creating boutique lodging space. ‘They spent $30 million to restore it and did all their work so that any change to the historic fabric is reversible,’ said Michael McGill, GSA press officer for the National Capital region.


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