Why the federal government wastes large amounts of property it often doesn’t even know it owns

March 13, 2014

NPR has an interesting story on how the federal government owns large amounts of unused property. Often, government agencies don’t even realize they own the land in question:



[T]he only known centralized database that the government has…[is] not reliable…

Sen. Tom Carper, a Democrat from Delaware, is one of the lawmakers pushing to get a clearer picture.

“We don’t know how many properties we have, we don’t know which ones we own, which ones are leased,” he says. “We don’t know whether we ought to be building or buying instead of leasing.”

But Carper says that even when an agency knows it has a building it would like to sell, bureaucratic hurdles limit what it can do. No federal agency can sell anything unless it’s uncontaminated, asbestos-free and environmentally safe. Those are expensive fixes.


Many agencies just lock the doors and say forget it.

Economist Alex Tabarrok points out that the NPR article actually understates the extent of the problem:


The whole situation is an unintended lesson in the advantages of private property rights. If a private owner has a piece of unused property, he or she has strong incentives to find some valuable use for it. If he can’t, he has a strong incentive to sell it to someone else who can do better. In both cases, he gets to keep the profit. For that reason, he also has incentives to keep track of the property he owns, and avoid imposing burdensome bureaucratic procedures that make it difficult to sell unused land.

By contrast, government officials get little or no reward for finding better uses for underutilized government land. Indeed, a conscientious bureaucrat who tries to do so may just end up annoying his colleagues and superiors, for whom it means extra hassle with little chance of any gain. For similar reasons, government agencies sometimes have little incentive to even keep track of the land they own, or to make it easy to sell unneeded property.

In theory, voters could incentivize efficient use of government-owned resources by using the power of the ballot box to punish politicians who let them go to waste. In reality, however, widespread voter ignorance makes this unlikely. Most voters have little if any idea of how efficiently the federal government uses the vast amount of land it owns. Like government bureaucrats, voters have little incentive to keep track of government-owned property and assess whether it is being used effectively. Each individual voter has only a tiny chance of affecting the results of an election, and this leads to rational political ignorance.

Some government ownership of land may be an unavoidable necessity. But we would be better off if a substantial part of the federal government’s vast landholdings were privatized.

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Eugene Volokh · March 13, 2014