Selling Federal Government Buildings

March 3, 2014

The government has a number of assets that could be sold into private hands, saving taxpayer dollars and increasing efficiency, says Chris Edwards, director of tax policy studies at the Cato Institute.

  • From offices to hospitals to warehouses, the government owns and leases a total of 361,000 buildings. Market value of the buildings is unclear, but the government estimated replacement value at $1.5 trillion in 2007.
  • The Army, Air Force and Navy top the list in building ownership, followed by the Department of the Interior and the Department of Agriculture.
  • Besides buildings, the government also owns and leases 486,000 structures (parking lots, for example).
  • Annual operating costs for all of these buildings and structures total $33 billion.

Underused or unneeded buildings total 77,000 altogether, according to the government itself. The Government Accountability Office (GAO) has said that many assets are "in an alarming state of deterioration." There is bipartisan support for some amount of privatization of these assets and lawmakers should push forward with the issue.

  • One problem is that the government is not entirely clear as to "what it owns, what condition assets are in, and what items are excess." The GAO has reported on the government's "lack of accurate and useful data to support decision making" on these buildings and structures. The first step toward privatization and sale would be conducting an inventory.
  • Moreover, there is a great deal of red tape around asset sales that should be cut back. Rules requiring that spare property be evaluated for potential use by the homeless, for example, can add two years to the process of disposing of a building.

By putting these buildings into the private sector, they would be used more productively and efficiently, boosting the economy, reducing the budget deficit, and cutting property maintenance costs over the long term.

Source: Chris Edwards, "Selling Federal Government Buildings," Cato Institute, February 19, 2014.

 

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