Federal agencies given deadline for plans to move offices out of D.C. area
The Trump administration is giving federal agencies until mid-April to suggest relocations of bureaus and offices out of the D.C. region, a move that would have widespread impacts on the local economy.
In a guidance issued Wednesday to the heads of all executive departments and agencies, the directors of the Office of Management and Budget and the Office of Personnel Management laid out steps for compliance with President Donald Trump’s order to eliminate “waste, bloat and insularity” in the government. Part of that is a directive to submit “any proposed relocations of agency bureaus and offices from Washington, D.C. and the National Capital Region to less-costly parts of the country” by April 14.
The move comes amid a broader push by the administration to cut its real estate footprint and drastically reduce the size of the federal government workforce. Spurred by Elon Musk’s U.S. DOGE Service, several agencies have announced plans to slash some teams by as much as 90%.
Also on Wednesday, Trump issued an executive order giving agencies seven days to submit an inventory of their real property and 30 days to identify all leases that can be terminated. Within 60 days, the order stated, the General Services Administration — the government’s real estate arm — must come up with a plan to dispose all property deemed “no longer needed.”
D.C. leaders, including Mayor Muriel E. Bowser (D), have expressed optimism that repurposed federal buildings could boost the vibrancy and residential life of areas near downtown and the National Mall that suffered from a transition to remote working during the pandemic.
But any large-scale effort to move government offices out of the capital region could negatively affect the local economy.
About four-fifths of the federal workforce live outside the D.C. area, but government workers are disproportionately critical to the capital region’s economy. About 373,000 federal employees live in the District, Maryland and Virginia, making up roughly 15% of the region’s workforce.
In the District, the federal government accounts for 24.5% of jobs and 27.5% of wages, according to a report last week from D.C.’s Office of Revenue Analysis. Federal jobs make up about 3.3% of Virginia’s workforce and 4.6% of Maryland’s.
Speaking at his first Cabinet meeting Wednesday, Trump singled out the Education Department as an agency that can significantly reduce its presence in the region. He has previously suggested eliminating the department.
“You go around Washington and see all these buildings with the Department of Education,” Trump said. “We want to move education back to the states, where it belongs. Iowa should have education. Indiana should run their own education.”
In response to a request for comment Wednesday, Bowser’s office, which has been reluctant to criticize Trump, shared a statement from the D.C. Office of the City Administrator.
“We are currently reviewing all executive actions, orders, and federal agency memos to better understand potential impacts,” the statement said.
Diana Parks, chair of the National Federal Development Association, which represents landlords who lease to the federal government, said a widespread cancellation of government leases would deliver a major hit to commercial real estate in the region.
It “would be devastating to most commercial landholders in the D.C. market,” she said, adding, “For all of it to hit the market in a short time, it’s just a supply-and-demand issue that’ll drive down the value of that real estate considerably.”
In his first term, Trump made smaller moves to relocate federal offices out of D.C. For example, he moved the Bureau of Land Management headquarters to Grand Junction, Colorado, but the move caused major issues at the agency. More than 87% of affected employees resigned or retired rather than move west, a Washington Post analysis found, and experts and former employees said the move deprived the agency of expertise and disrupted its operations.
During his 2024 presidential campaign, Trump said he would move up to 100,000 federal jobs “out of Washington to places filled with patriots who love America,” drawing concern from regional leaders.
Last month, Trump’s appointee to lead the Public Buildings Service, which oversees federal real estate, said he was eyeing a 50% reduction in government office space, with a “disproportionate amount” of the cuts coming in the D.C. area.
The whirlwind of activity in the early weeks of the Trump administration has made it challenging to assess the effects on the local economy.
Any relocations may not happen quickly. It can take years for the government to dispose of buildings it owns, and not all federal leases can be quickly canceled. Recent data from the GSA shows that fewer than half of government leases can currently be terminated, said Marcy Owens Test, a former GSA official who now leads the Federal Lessor Advisory Group at the commercial real estate firm CBRE. The others are still in a lease period during which cancellation would be a breach of contract.
Terry Clower, director of the Center for Regional Analysis at George Mason University, said cuts to the D.C.-area federal workforce might force the region to diversify its economy beyond dependence on the government. “A smaller federal government means that to be successful economically, this region needs to be more competitive in a normal commercial sense,” he said.
Wednesday’s guidance on relocations out of the region comes as part of a broader directive to streamline the government. It includes a March 13 deadline for agencies to “focus on initial agency cuts and reductions,” including by listing any offices that should be “eliminated or consolidated.” By April 14, agencies are also directed to propose a “future-state organizational chart” and to submit any reductions to their “real estate footprint” apart from the relocations.
—
• Emily Davies contributed.