Update 1/29: A memo rescinding telework and remote work specifically notes that it does not apply to the U.S. Patent and Trademark Office.
A new executive order mandating federal employees end telework and return to offices could be a boon to the local markets, though a local expert warned not to expect a return to the pre-Covid office market.
Office values in Alexandria have mostly declined in recent years, with office property values dropping by 12.4% last year. One-third of Alexandria’s workforce works remotely and federal agencies — notably the Patent and Trademark Office — have dramatically downsized as a result.
Stephanie Landrum, President and CEO of the Alexandria Economic Development Partnership (AEDP), noted that full offices have a ripple effect on the local market with impacts on hotels, retail, restaurants and more. Economic experts in neighboring Arlington were similarly optimistic.
“Active office buildings have been an important part of Alexandria’s desired mixture of real estate uses for decades, and attracting federal agencies to the City has been a core component of our economic development strategy to fill those offices,” Landrum said. “The US Patent and Trademark Office (USPTO), National Science Foundation (NSF), US Courts, Department of Defense (DoD), and US Drug Administration (USDA) have moved into and inhabited office space in Alexandria over the last three decades, and federal employees, contractors and visitors to these facilities have boosted our daytime population and supported our restaurant, retail, and hotel economies.”
The USPTO shed around 764,000 square feet last year, comprising the majority of the 1.06 million square feet of office space the General Services Administration was set to eliminate. The office market was in such dire straits that Alexandria and its nearby suburbs, Arlington and Washington D.C., were leaders in the office-to-apartment conversion market.
The USPTO declined to comment for this story.
Landrum said if the executive order or administration in general changes “right-sizing” from a downward trend to growth, Alexandria would be well-positioned with available office space ready to lease to federal agencies and local businesses could see benefits from that.
“As and if federal employees return to the office on a more-regular basis, those other businesses will benefit from an increase in regular customers and help contribute to the activation and energy in some of Alexandria’s larger office neighborhoods like Carlyle and Eisenhower Avenue,” Landrum said. “While we wait to see how the federal agencies with a presence in Alexandria process and implement the new Presidential Executive Order that addresses return to office, we continue to work with the federal government and the General Services Administration (GSA) on their ongoing real estate requirements.”
Terry Clower, Director for the Center for Regional Analysis and a Professor of Public Policy at George Mason University’s Schar School of Policy and Government, said the ‘if’ for federal workers returning to offices is doing a lot of heavy lifting. Many workers moved to more affordable areas of the country as commuting became a non-issue.
“Like most of this stuff, there is nuance to this story that doesn’t fit well with the broad political narrative being offered,” Clower said. “Agencies trying to hire in DC’s market were having a hard time finding people with the skills they needed who would move here for our cost of living.”
While the order does include allowances for those who relocated further away from federal offices during the pandemic, it also directed agencies to begin “phasing in the return of remote workers.”
Of those who live locally, Clower also noted that most already spent an average of 61% of their time in the office between 3-4 days of the week.
“That is certainly not the narrative that we have that says we have to force all these people back,” Clower said. “Downtown, you can see there are more people around [during the day], while not at pre-pandemic levels. So I don’t think they’re fixing a problem that’s a big problem.”
However, Clower said it’s possible that the real reason behind the order could be to have a reason to cut people out of federal jobs.
“If you believe what Mr. Musk has been quoted as saying, this isn’t about efficiency or reorienting concerns about lunch and retail, this is an effort to disincentivize working for the federal government,” Clower said. “If what he says is true, filling the office isn’t the intent: it’s using it as a method of getting people to quit.”
Regarding the USPTO specifically, Clower said that office had been operating hybrid with remote working longer than nearly any other agency, significantly pre-dating Covid.
“They went through their growing pains on it,” Clower said. “They went through the apparent loss of productivity and they brought in experts who did work and made recommendations that were implemented… They figured out how to manage a remote workforce and how to make sure people were getting the work done.”
Clower said one of the next major steps will be examining federal worker labor agreements and determining whether or not the executive order bypasses that. Several of those agreements have hybrid work availability built in, though Clower said it’s unclear if the executive order can bypass that.
“Is this going to be as big a thing as people think it’s going to be? I’m not sure if that’s the case,” Clower said. “For years I’ve heard the stat that 30% of federal government employees are eligible to retire, so if you were a federal employee living in Arlington, Alexandria or Fairfax and you’re told to come back to the office, are you going to quit your job instead of doing commute? Probably not.”
Clower said the issue is different, though, for those who used the shift to remote work to relocate.
“Lets say you’re a young family working downtown and you used this opportunity to move to Spotsylvania because you could afford to buy something more than two-bedroom condo, you have a choice to make,” Clower said. “Do you want to fight with I-95 or I-66 if you’re going to have to do it five days a week? Does that person take another job in the area or do we lose them?”
If those workers do return to offices in Alexandria, Landrum said that will also have an impact on traffic, transportation use and more in Alexandria over the coming years.
“While office space and its occupancy is the natural area of focus for this topic, Alexandria’s resident base is also fairly dependent on the federal government as an employer and source of household income,” Landrum said. “A change in back to office pattern for that population will have impacts on traffic, transportation use, and a potential shift in daytime population as residents leave Alexandria to go back to the office elsewhere in the region.”
