In one of their early moves, the Republican majority in the House introduced a bill that would undermine hybrid work arrangements for federal workers, forcing the government's employees back into the office and out of any work-from-home strategies. The theory is that the agencies cannot be as productive out of the office as in it.

The bill already faces a number of difficulties and a new one has just surfaced: the start of union contracts that are including promises of flexible work.

The topic is of interest to the CRE office sector because of the amount of space the federal government leases: with the General Services Administration (GSA) having been managing 7,760 leases for almost 180 million square feet and $5.7 billion in annual rent as of March 2022. But according to a GSA survey of federal agencies last fall, out of 24, 16 were planning to reduce the number of leases and 19 expected to reduce square footage over the coming three years. That would have a big impact not only on property owners, but potentially on the tax bases and economic activity in many metro areas.