That danger goes beyond the TSA. Federal workers considered essential include correctional officers at federal prisons, air-traffic controllers and the firefighters who battled some of California’s wildfires last year. Even furloughed workers who aren’t considered essential could begin drifting away, creating openings that will have to be filled when the government reopens.
“Now is the time when people are going to start looking for other options,” said Steve Lenkart, executive director of the 110,000-member National Federation of Federal Employees. “The rent is due, and a lot of these feds live paycheck to paycheck.”
Federal Leases
The federal government may stop paying its own rent because there is no one to process the checks.
The drop in revenue would hit property owners as soon as the end of this month, when the General Services Administration would usually send out its January payments, according to Darian LeBlanc, director of the government services group at Cushman & Wakefield PLC.
The GSA leased more than 190 million square feet in nearly 7,000 buildings nationwide at the start of its 2018 fiscal year, representing roughly $5.6 billion in annual rent payments, according to an agency report. That means landlords could be out some $460 million a month if the agency stops issuing checks.
And even if the GSA were to designate the staff who process those rent checks as essential, making them work without pay, there’s another risk: The Federal Buildings Fund, which is the source of the GSA’s rent payments, could go broke, as other closed-down federal agencies stop paying the GSA for using its buildings.
“It is just a function of time before that happens,” LeBlanc said in a phone interview.
Can’t Evict
If the government stops paying its rent, landlords have no good options. The law prevents them from evicting federal tenants; their only recourse is to sue. In the meantime, landlords must continue to honor their commitments under the lease, such as servicing the property.
“It becomes a very, very bad situation for these lessors,” LeBlanc said. “They’ve got debt payments and all the things that they have to meet. It could become very problematic.”
Douglas Development Corp, which rents almost 1 million square feet of space to the GSA, has set aside money in case the government stops paying, according to Norman Jemal, a principal and senior vice president.