The R Street Institute’s latest policy short explains the multi-billion-dollar portfolio of property held by the USPS and how divesting such properties could benefit the agency, which is in dire straits financially. As legislators determine the best way forward to deal with the agency’s financial difficulties, a decision must be made about what to do with the remaining owned property.
With the 2016 Federal Property Management Reform Act, Congress mandated the USPS to develop a five-year management plan to reduce its excess and underutilized real estate property.
Speaking only of one facility—the Curseen-Morris postal facility in Washington, D.C.—the author, Nick Zaiac, associate fellow at the R Street Institute, notes that “even if the agency retains the entire facility and one floor of parking, current zoning would allow it to add as much as 8 million square feet of building to the site, or between 8,000 and 10,000 two-bedroom apartments, generating $100-250 million in revenue each year—even if rented only at a below-market $1,500 per unit.”
The policy short explains:
- While the USPS has already divested itself of much of its property in favor of leases, what the agency still owns amounts to a multi-billion-dollar portfolio.
- The USPS has options, however, in how to leverage such assets. If they choose to offload them in favor of becoming solely a renter of property, there are already mechanisms in place to do so.
- However, if they choose to keep these properties, they can use the government’s right of sovereign immunity to bypass many local rules and regulations, allowing the postal service to develop them for more-profitable use (for example, into housing units in high-value areas or for rent at market value to other small businesses).
Read the full policy short, “Postal Real Estate,” here.
Source: R Street