Tuesday, April 16, 2013

Why isn’t the country’s biggest real estate holder selling its losers?

The government owns or manages tens of thousands buildings and other structures across the country — office buildings, courthouses, warehouses, and other property types — making it the nation’s largest real estate holder. However, between 55,000 and 77,000 of them sit vacant. It's impossible to tell exactly how many. No precise inventory has been kept.

Whatever the number, they’re costing you and me BILLIONS to maintain each year.
At the same time, Washington is up to its eyeballs in debt, approaching $17 trillion by last count.
It’s no secret that real estate is one of my favorite investments for increasing your income and growing your portfolio along the way. I’ve written about it many times in this blog and have answered numerous questions readers have sent in. And I can pretty much guarantee that if you told me you owned real estate that had negative cash flow with no chance of turning it around and were hurting for money, I’d tell you to sell it … as quickly as possible.
But that’s not how the folks in Washington think. They’re in no hurry. Let me give you an example …

There is an old steam-generating plant with a spectacular view of the Potomac waterfront. The government just sold this building to a private developer for $19.5 million. However, it sat there — vacant and off the market — for 10 years!
It turns out that a for-sale sign wasn’t put up until the day before the House Committee on Oversight and Government Reform drug GSA officials to the dingy facility for a hearing last summer.

Representative Jeff Denham chastised a GSA official, saying, "You can't get your job done! I don't care if it's a Republican or Democratic administration, the job is not getting done!" 
Selling buildings that the government has no use for could save taxpayers between $3 billion and $8 billion a year, according to various analysts. Chump change by Washington standards. But still, it’s money that could be put to better use such as helping to shore up Medicare.

However, it’s not as simple as sticking a for-sale sign out front and waiting for offers to pour in … several hurdles must be cleared.
One is that federal, state and local government agencies must first be given the opportunity to acquire it. Next the property must be made available to shelter the homeless. On top of that, federal environmental and historic preservation reviews are required. Only then can properties be sold to private entities.

Legislation to require the federal government to expedite the sale of underused properties died in the last Congress. At the moment, nothing is pending.
There is something you can do, though. Tell your Congressmen that you’re sick and tired of their dillydallying around with the budget problems. And making it easier to sell government buildings is a no-brainer that shouldn’t offend any special interest groups.  

You can find your Representative’s contact info here. And for your Senators, go here.

Best wishes,


P.S. Feel free to use the letter below when contacting them.


Dear [Representative or Senator],
I understand that the Federal government owns tens of thousands of buildings and other structures that are vacant or underutilized. What’s more, it’s costing taxpayers billions of dollars to maintain this real estate. I would like to know what you are doing to get these properties off our backs.

I look forward to your reply, as this is an issue I will keep in mind when the next election rolls around.


[Your name]


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