Decades of deferred maintenance across the federal government’s real estate portfolio have created an estimated $50 billion repair backlog, according to an interim report from the Public Buildings Reform Board (PBRB). The report—The Cost of Inaction: Deferred Maintenance in GSA’s Portfolio—examines buildings managed by the General Services Administration (GSA) and concludes that long-standing underinvestment in maintenance and repair has accelerated asset deterioration, increased lifecycle costs, and weakened facility performance across much of the federal portfolio.
Without major policy changes and a reduction in the government’s real estate footprint, the board warns, the financial liability could grow significantly in the years ahead.
The report found that for decades the GSA has been receiving funds for maintenance and repair equal to approximately 0.375 percent of the portfolio’s replacement value. Industry standards recommend a rate of 2 percent to 4 percent. Researchers found that the result is a portfolio “with deferred maintenance backlogs that increase building lifecycle costs, accelerate asset deterioration, and degrade facility performance.”
Deferred maintenance can also weigh on local economies as deteriorating or abandoned federal properties depress surrounding property values, the report notes.
“Congress is never going to be able to appropriate its way out of this problem,” PBRB Acting Chairman Talmage Hocker. said in a statement. “The only way to handle this is through a radical reduction in the GSA’s portfolio size.”
Deferred Maintenance Report Findings
The Public Buildings Reform Board reviews the GSA’s real estate portfolio to assess how federal buildings are used and to recommend potential sales, redevelopment opportunities, or office consolidations. In its analysis, the board found that buildings between 31 and 75 years old—representing the largest share of square footage in the GSA portfolio—also have the highest maintenance costs per square foot.
The share of maintenance resources spent on older buildings diverts funds away from newer properties that could remain cost-effective and fully viable. That makes those aging buildings the most logical candidates for potential divestiture.
Beyond the specific maintenance costs, the PBRB also found that when a building deteriorates so much that tenants must relocate to a leased building, taxpayers end up paying the bills for the new space along with upkeep on the vacant property. In addition, empty offices can drag down property values in the surrounding area, which may lead to declining property tax revenue.
PBRB Recommendations
The primary recommendation of the PBRB, which addresses the estimated $50 billion in deferred maintenance costs, as well as long-term stewardship of federal buildings, is for the federal government to “strategically and aggressively reduce its property footprint through targeted consolidation and divestiture of underutilized and high-cost assets,” according to the report.
The PBRB points out that while there’s an urgency to reduce costs, timing property sales is important.
“While Federal agencies are now beginning to seriously consider the methods, locations, and timing for implementing required changes, they must also recognize that the enormous amount of property to be divested cannot be addressed all at once and a significant investment must be made to ensure that each property is sold at the highest possible return,” Hocker explained in a statement.
The PBRB report recommendations for the federal government include:
- Incentivize Action: Establish a clear and quick process for property sale proceeds to be used for subsequent consolidations and planned sales, backed by consistent and timely appropriations.
- Maximize Private Capital: GSA should access private capital through leases and other public-private partnerships to consolidate office footprints, lower total costs, and create flexibility to meet evolving office space needs.
- Reform the Federal Buildings Fund (FBF): GSA should pursue an adjusted ROI rent pricing policy to ensure agencies pay sufficient rent to cover required maintenance, and Congress should fully fund GSA’s requests from the FBF.
- Align Capital Planning: Stop prioritizing “Funds from Operations (FFO) positive” assets, which forces some buildings to financially support the rest of the portfolio, and instead align capital decisions with taxpayer interests and mission needs.
- Adjust Federal Rules to Provide Better Decision Making: Adjust federal rules governing cost/benefit analysis for leasing versus owning buildings, along with budgetary scoring rules to better reflect more strategic, cost‑effective choices.
- Increase Flexibility: Permit agencies to use rent appropriations or other operating funds for building shell improvements in exchange for rent credits, increasing access to capital and streamlining project delivery.
- Improve Data: Mandate the collection of valid and reliable occupancy and daily use data, along with accurate facility condition and maintenance data, to make rational, portfolio-wide decisions on which assets to retain, consolidate, or divest.
- Establish Oversight: Congress should consider extending and perhaps expanding the PBRB’s authorization to allow it to work with federal real estate agencies to continue to identify properties that should be sold and engage with Congress to push ahead required reforms.
Related Reading:
- ULI, the Public Buildings Reform Board, and the National Capital Planning Commission convened a two-day Technical Assistance Panel in February 2025 to examine strategies for repositioning underused federal properties. (Full report)
- Public Buildings Reform Board Meets in Charleston over Region’s Underused Federal Real Estate
