Federal Real Estate Board

The Federal Real Estate Board was a United States federal agency established in 1921 within the Treasury Department to manage Federal properties (excluding public lands such as National Forests and BLM land) for the purpose of reducing expenses by coordinating the use of real estate across federal agencies. It was active in the Harding and Coolidge administrations.

A different board of the same name was active during the Roosevelt and Truman administrations. This time, the board was primarily tasked to study the impact on state and local governments of the loss of tax revenue due to the exemption from taxation of the vast Federal real estate holdings. It also sought to mitigate such damages by encouraging the sale of surplus property and minimizing the acquisition of additional property.

First Federal Real Estate Board of 1921

An executive order by President Warren Harding on November 8, 1921 created various boards "to promote economy and efficiency in the routine business and administration of the Government...in the application of uniform business principles and methods to the expenditure of public funds." Under this order, Federal Real Estate Board was created on February 18, 1922 to "coordinate the activities of the Government relative to the purchase, sale, and rental of real property." It first met on April 14 of that year.[1]

The creation of the board was lauded by the National Association of Real Estate Boards who had been advocating improvements in the government's methods of managing its real estate. The Realtor association said creation of the board "meets with the hearty approval of Realtors" and tendered it service to the government to aid in the acquisition, leasing, and disposition of property for the government.[2]

The board was led by the Surveyor General of Real Estate and included a representative of every federal department that owned, occupied, or otherwise controlled federal real estate. In its first year, the board effected the location of federal agencies into government-owned building in some large cities and planned to meet future growth by using surplus property before making new acquisitions. The board was addressing a problem caused by the lack of coordination of needs across different departments and agencies. It approved over 1000 property leases and the sale of several properties.[1]

In 1922, the board created a standard lease to be used by the Federal government. The board asked the National Association of Real Estate Boards to review the lease, to insure it was "uniformly just to the owner and to the government".[3]

A June 30, 1923 report by the board Chairman reported that it had already found underutilized real estate due to there having been no prior coordination between departments and agencies. It recommended that the board undertake a forecast of all real estate needs for a ten year period and specify standardized space requirements for administrative functions. It also reported that it has approved over 2500 leases, the sale of 100 properties and the purchase of 24 others. It had also determined the value of federal property was $1,179,778,031 not including public lands.[1]

By June 30, 1924 the total value of property was $1,542,655,511 and the board had completed compiling the records on all property. In the prior year, over 2,000 leases were approved and the board noted that the lease amounts on many post offices was increasing. The board coordinated the transfer of military property no longer needed by the Department of War to other departments, or its sale. This report also noted that the War Department, Navy Department, Veterans' Bureau, Interstate Commerce Commission, and the Post Office already had well functioning central departments of real estate that could provide the board with information on its properties and urged other departments to create such units.[1]

The board's 1925 annual report was similar, noting the approval of over 3,200 leases, rising rents, and approval of 23 purchases and 81 sales, mostly for the military. It noted the transfer of part of Ft. Leavenworth from the War Department to the Department of Justice and the sale of 23 military reservations in Alaska.[1]

The 1926 report continued detailing the leases approved, and property bought and sold. It announced new procedures in an attempt to save more money. The board would not approve new leases if there was suitable space available in an existing building and if there was any question about suitability, the burden to prove the space was not suitable was with the agency requesting new space. Its second new policy was that 100 square feet of space for an official and 60 square feet for subordinates was sufficient.[1]

The board's 1927 report, in addition to documenting leases and summarizing rent increases, noted the transfer of the Big Pine Day School in Inyo County, California from the Department of Interior to the Department of Agriculture. It also announced even tighter procedures to be followed to request additional space with the aim of further savings in rent paid by the Federal government.[1]

Membership

The chairman for many years was James A. Wetmore. The vice-chairman and secretary represented the War and Navy Departments, the largest owners of Federal properties. Other members represented:[1]

Second Federal Real Estate Board of 1939

The second board was established by Executive Order 8034 of January 14, 1939 and abolished by Executive Order 10287 of September 6, 1951.

Background

On December 17, 1935, during a meeting of the National Emergency Council, President Franklin Roosevelt ordered a study on the effect of the ownership of real estate by the United States on the real estate tax revenue of state and local government. The study was to be performed by a committee comprising the Secretary of the Treasury, the Attorney General, and the Director of the Bureau of the Budget.[4]

The committee considered the loss of tax revenue to state and local governments to be a serious problem due the large amount of federally owned property exempt from taxation. It made no recommendations on compensation for lost of tax revenue on Federal property and limited its function to assessing the amount and value of Federal property and the equivalent tax value of the property.[5]

The study, completed in 1939, made several recommendations:

Roosevelt created the board by executive order. The board was to consist of a representative of every government agency "in charge of considerable holdings of Federal income-producing property", and representatives from the Procurement Division and the Bureau Of the Budget.[4]

1943 Report

The board issued "Federal Contributions to State and Local Governmental Units with Respect to Federally Owned Real Estate"

The board did consider compensating for loss of property tax revenue on Federal property and concluded the simplest solution would be to let the property be taxed the same as privately-owned property. It rejected this as inequitable because federal property often provided local community benefits that private property did not, but felt federal payments in lieu of taxes for certain classes of property would be equitable.[5]

It said that property that provided general government administration and local services, such as office buildings, post offices, and courthouses, customs offices, mints, etc. should be exempt for taxation or compensation. Also exempt were properties use for the care of people such as quarantine stations, narcotics farms, immigration stations, reformatories, hospitals, cemeteries, etc.[5]

With regard to property used for national defense, the board said payments should be made for properties acquired after September 8, 1939.[5]

Truman Administration

On July 5, 1949, President Harry Truman vetoed Senate bill 41 which would have paid the city of Reno, Nevada $1,620 for street improvements made near a property owned by the United States Forest Service. Truman acknowledged that some jurisdictions suffered hardships due to loss of tax revenue on Federally owned property, but stated such property was exempt under the doctrine of intergovernmental immunity. Truman went on to say that special consideration for Reno would encourage further such requests and a general program addressing all Federally owned property, as recommended by the board in 1943, should be pursued by Congress instead.[6]

Truman abolished the board by Executive Order 10287 of September 6, 1951.[7]

Membership

The board included representatives of:[8]

References

  1. 1 2 3 4 5 6 7 8 Annual Report of the Director of the Bureau of the Budget to the President. United States Bureau of the Budget. 1922. Retrieved 22 July 2017.
  2. ↑ "Annual Report by President Heitt". National Real Estate and Building Journal. 23. June 19, 1922. Retrieved 23 July 2017.
  3. ↑ ""Uncle Sam Preparing Standard Lease"". National Real Estate and Building Journal. 23. December 4, 1922. Retrieved 23 July 2017.
  4. 1 2 "Message to Congress Establishing the Federal Real Estate Board". The American Presidency Project. Retrieved 22 July 2017.
  5. 1 2 3 4 Hall, R. Clifford (November 1943). "INTRODUCTION TO THE FEDERAL REAL ESTATE BOARD REPORT". Proceedings of the Annual Conference on Taxation under the Auspices of the National Tax Association. National Tax Association. 36. Retrieved 22 July 2017.
  6. ↑ "Public Papers, Harry S. Truman, Veto of Bill for the Relief of the City of Reno, Nevada". trumanlibrary.org. Retrieved 23 July 2017.
  7. ↑ "Executive Orders, Harry S. Truman, EXECUTIVE ORDER 10287 REVOKING EXECUTIVE ORDER No. 8304 OF JANUARY 14, 1939 AND ABOLISHING THE FEDERAL REAL ESTATE BOARD, Nevada". trumanlibrary.org. Retrieved 23 July 2017.
  8. ↑ United States Government Manual. Washington D.C.: Division of Public Inquiries - Office of War Information. 1945. Retrieved 23 July 2017.
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