Remote work has made downtown DC a ghost town as federal office buildings sit mostly empty
- The US Government Accountability Office found that 17 of 24 federal agency headquarters are mostly empty.
- Many federal employees are continuing to work remotely and their offices are sitting vacant.
Downtown Washington, DC is facing a familiar crisis among American cities right now. With the surge in remote work in recent years, downtowns across the country have emptied out and are struggling to bring workers, residents, and visitors back. Major office tenants are opting to downsize or give up their leases, sending commercial real estate into a tailspin.
But unlike many other US cities, much of DC's downtown office space is controlled by a single landlord: the federal government. While the government has a wide range of telework policies, all 24 federal agencies have reported that their in-person workforce hasn't returned to pre-pandemic levels because of remote work. And it's having a major impact on DC's urban core.
A report released last week by the US Government Accountability Office found that 17 of the 24 federal agency headquarters — nearly all of which are in DC — were using just 25% of their building capacity on average during three weeks in January, February, and March. Overall, utilization rates across the headquarters ranged from about 10% to 50%.
Unused space in federal office buildings has long been an issue, but the problem has intensified since almost half of the country's two million federal employees moved to remote work during the public health emergency.
David Marroni, the acting director of GAO's physical infrastructure team, told Insider that he expected building use rates to be low, but the numbers in the report "jump off the page."
"All 24 agencies had extra space and need to take a hard look at what space they'll need going forward and then move in that direction quickly," he said.
There are three major issues when it comes to empty federal building space, Marroni said. It costs taxpayers a lot of money to own and maintain the building space — the federal government spends about $7 billion a year operating and leasing space. It's also environmentally costly to heat, cool, and power the unused space. And it creates opportunity costs both for the agencies — which could redirect the money to other priorities — and for the neighborhood and city, which suffer from the lack of workers and activity.
DC Mayor Muriel Bowser has been ringing alarm bells about the downtown crisis. She's pressed the White House to either get federal employees back to the office, or turn over their building space to the city or any private entities "willing to revitalize it."
Many congressional Republicans have also demanded that the Biden administration both restrict telework and get rid of unused office space. The House Transportation and Infrastructure Committee requested the GAO produce the report. During a hearing on Thursday, Rep. Scott Perry, a Pennsylvania Republican and the chairman of the subcommittee responsible for public buildings, insisted "if agencies aren't using their space, they've got to give it up."
The White House Office of Management and Budget asked federal agencies in April to "substantially increase meaningful in-person work" by limiting telework. Some agencies, including the Department of Education and the Department of Veterans Affairs, have recently ramped up their efforts to get workers back to the office. But there are concerns — including from employee unions — that restricting remote work could hurt the recruitment and retention of federal workers.
Once the agencies figure out what their remote-work policies will be and how much space they need going forward, the federal government can determine whether to consolidate offices, sell or lease space, or invest in renovations.
In one successful example of a federal building conversion, the old General Post Office building in downtown Washington, later used by the Tariff Commission, which was built in 1839 and left vacant (and rat-infested) in 1988, was leased out and converted into a 184-room Kimpton hotel in 2002. Similarly, the old Post Office and Clock Tower on Pennsylvania Avenue was converted into the Trump International Hotel in 2016 and then reopened as the Waldorf Astoria in 2022.
"It's gonna take money to do any consolidations, any disposals, but retaining the unneeded space is costly to the agencies and to the taxpayer," Marroni said.
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