One Federal Agency's Unused Office Space Costs 'Hundreds of Millions of Dollars' Per Year

In one of his day-one acts, President Donald Trump ordered all executive branch agencies to “terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis,” barring individual exemptions.

Despite that, a new report found that one department’s office spaces are “significantly underutilized,” and it’s costing taxpayers a fortune.

“The Department of Transportation (DOT) and its component agencies are
underutilizing their office space department-wide,” according to the Government Accountability Office (GAO).

The Utilizing Space Efficiently and Improving Technologies (USE IT) Act, passed in 2023, set a required minimum 60 percent occupancy rate for all federal agencies and empowered the government to “consolidate federal agency headquarters buildings in the National Capital region,” if necessary, to hit that benchmark.

According to the report, when GAO auditors checked DOT facilities between August 25 and September 19, 2025, they “found that 89 percent of DOT’s 189 office buildings, including the DOT and the Federal Aviation Administration (FAA) headquarters complexes, were underutilized,” based on that 60-percent threshold.

It turns out they were not just underused, but drastically so: “Our analysis found that average utilization rates among owned and leased buildings were similar, at 37 and 41 percent, respectively.”

The DOT and FAA headquarters buildings are by far the department’s largest and most expensive: Combined, they total 1.8 million square feet and have an estimated capacity of more than 12,000 employees, with over $100 million in annual rental costs and nearly $25 million in annual operations costs. And yet when surveyed, each building was only about one-third full on any given day.

The DOT’s third most expensive building is One Aviation Plaza in Queens, New York. Despite having an estimated capacity under 1,000 people, the building carries over $15 million in annual rental costs, and yet during the GAO’s survey period, it was only 13 percent occupied.

The report divided all DOT buildings into four categories based on size; of those, the only category that averaged more than 50 percent occupancy was the very smallest facilities, with an average capacity of just 16 people.

This is about more than just sparsely populated offices, though: As with most things that involve the federal government, it’s about huge wastes of taxpayer money.

“DOT’s underutilized office space costs hundreds of millions of dollars annually to lease, operate, and maintain,” the GAO found. “Of the 189 DOT buildings included in our analysis, we found 168 buildings were underutilized, totaling $370 million in annual rental, operations, and maintenance costs.”

Unfortunately, this issue is not new, nor is it confined to just the DOT. In 2023, the GAO surveyed the 24 agencies that use most of the federal government’s buildings, constituting about $2 billion in annual operating costs. It found average occupancy rates between 25 percent or less on the low end, and 49 percent on the high end.

At that time, the DOT was in the second-lowest quartile of agencies that used only around 16 percent of their available space, on average.

One thing the report notes is that the DOT has made no efforts to maximize its existing space, particularly at any of its secondary locations. For example, the DOT operates a number of inferior agencies, but none of them currently share office space with each other. In practice, this means a number of similar agencies in the same department occupy separate, half-empty offices.

The report also notes that certain DOT offices could adopt a desk-sharing system. Even though agencies are required to work in person, many employees in DOT field offices “conduct investigations or inspections at offsite locations, such as airports or airplane manufacturing facilities,” and as a result, they “spend roughly half of their time working offsite.” And yet, the department provides each of them with a dedicated desk that is empty half the time. The GAO notes that a desk reservation system, which the department has resisted, could free up space that currently sits empty.

Granted, the DOT has taken some steps to address the issue. Last year, the department announced plans to move FAA staff into the DOT headquarters and return the FAA’s building to the General Services Administration (GSA). Doing so, the GAO noted, “will allow DOT to avoid paying $56 million annually to GSA for rent, operations and maintenance,” plus “an estimated $131 million in deferred maintenance costs,” depending on what the GSA does with it next. (Ideally, it would sell the building, and many others, freeing up valuable commercial real estate for use in the private sector and saving taxpayers money in the process.)

But right now, those savings are theoretical: The GAO notes that not all FAA staff would move into the DOT building, leaving 950 FAA staffers whom the department hasn’t figured out where to put yet.

Considering the FAA employs more than 45,000 people in total, perhaps they could be relocated into the private sector too?

The post One Federal Agency’s Unused Office Space Costs ‘Hundreds of Millions of Dollars’ Per Year appeared first on Reason.com.

Source: https://reason.com/2026/07/17/one-federal-agencys-unused-office-space-costs-hundreds-of-millions-of-dollars-per-year/