The Biden Administration Pushes for More In-Office Work by Agencies

The Office of Management and Budget recently released a memorandum essentially telling executive branch departments and agencies that they’re expected to increase in-person work of federal employees.

Simultaneously, OMB tried to straddle a line recognizing the use and need of remote work, likely because the option has become important to unions that are major supporters of the Biden administration.

CRE professionals, city managers, economists, and others have been concerned about the impact ongoing reduced office usage could have on metropolitan areas, including economic activity to support a wide collection of small businesses and jobs as well as tax bases.

In December, The Real Estate Roundtable — backing firms including Brookfield Properties, Blackstone, Empire State Realty Trust, Starwood Capital, as well as multiple major banks and CRE professional organizations — emphasized in a letter to President Biden just how concerned many in the industry have become.

“We therefore respectfully urge you to direct federal agencies to enhance their consideration of the impact of agency employee remote working on communities, surrounding small employers, transit systems, local tax bases and other important considerations, along with the direct effect on governmental service delivery and labor productivity. In addition, we ask for your support of legislation to facilitate the increased conversion of underutilized office and other commercial real estate to much-needed housing,” the letter read.

The concern exists because federal agencies have been actively looking to help their budgets by cutting leased office space. A General Accounting Office report from September said that, in a survey, most agencies were planning significant cutbacks in the amount of space they use.

“GSA leases space for agencies from other federal agencies, public entities, and private-sector lessors in commercially owned buildings,” the report stated. “As of March 2022, GSA managed 7,760 leases, totaling nearly 180 million square feet. Rent costs for these leases are about $5.7 billion annually.” It also added, “There are more than 19,500 federally owned buildings, including approximately 511 million square feet that are considered office space.”

House Republicans in January 2023 introduced a bill aimed at forcing federal agencies to have workers return to the office. The House bill is called the “Stopping Home Office Work’s Unproductive Problems,” or “SHOW UP” Act of 2023. If it should become law, it would require within 30 days of enactment that every federal agency would have to return to the “telework policies, practices, and levels of the agency as in effect on December 31, 2019, and may not expand any such policy, practices, or levels until the date that an agency plan is submitted to Congress with a certification by the Director of the Office of Personnel Management.”

On the other side, federal workers have become attached to working from home and federal employee unions have been negotiating telework into their overall contracts. That could ultimately make it difficult for agencies to order employees back to work.

That leaves the OMB trying to make clear what it expects while trying to minimize the pushback from unions.

“This spring, agencies will develop updated Work Environment Plans that describe current operational policies that are critical to improving organizational health and organizational performance,” the memorandum read. “Those plans should also describe future changes to those policies aimed at improving an agency’s mission delivery. It is the expectation that as a part of these assessments agencies will continue to substantially increase meaningful in-person work at Federal offices, particularly at headquarters and equivalents, while still using flexible operational policies as an important tool in talent recruitment and retention.”