Ioana Dorhoi, PhD – Government Relations and Public Affairs

February 27, 2025

The Trump administration has set an April 14 deadline for federal agencies to submit plans to relocate offices from the D.C. region to “less-costly” parts of the country. This move could reshape the federal workforce, disrupt local economies, and transform the commercial real estate market in the capital.

Why does this matter?
✅ Job Security – Thousands of federal employees in D.C., Maryland, and Virginia may be forced to relocate or face uncertain futures.
✅ Economic Ripple Effect – The federal government is a major employer in the region. Downsizing and lease cancellations could hit local businesses, real estate, and services hard.
✅ Government Efficiency? – Will decentralization improve governance, or will it lead to loss of expertise and operational challenges?

This policy could redefine how and where the federal government operates for years to come. 📉📈

📢 What are your thoughts? Should more federal jobs move out of D.C.? What impact do you see on the workforce and economy? Let’s discuss! ⬇️

#FederalJobs #GovernmentReform #WashingtonDC #PublicPolicy #Economy

Federal Agencies Given Deadline to Relocate Offices Out of D.C.

The Trump administration has set an April 14 deadline for federal agencies to submit plans for relocating offices and bureaus out of the Washington, D.C., area. This directive, aimed at cutting government spending and decentralizing federal operations, is part of a broader initiative to streamline agencies and reduce their footprint in the nation’s capital.

A Push for Efficiency and Cost Reduction

In a memo issued Wednesday, the directors of the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) instructed agency heads to identify offices that could be relocated to “less-costly parts of the country.” This move aligns with President Donald Trump’s call to eliminate “waste, bloat, and insularity” within the federal government.

Additionally, Trump’s executive order mandates that agencies submit an inventory of their real property within seven days and identify all leases that can be terminated within 30 days. The General Services Administration (GSA) has been tasked with formulating a strategy within 60 days to dispose of properties deemed unnecessary.

Impact on the D.C. Region

The potential relocation of federal offices could significantly impact the Washington, D.C., economy. While most federal employees reside outside the region, approximately 373,000 federal workers live in the D.C. metro area, constituting around 15% of the workforce. The federal government accounts for nearly a quarter of jobs in the District and over a quarter of its wages.

D.C. Mayor Muriel E. Bowser has indicated that the city is evaluating the implications of these relocations. While there is hope that vacated federal buildings could be repurposed for residential and commercial use, a mass exodus of agencies would undoubtedly shake the city’s economy and real estate market.

Concerns Over Government Functionality

Critics argue that previous attempts to relocate federal agencies have proven disruptive. During Trump’s first term, the Bureau of Land Management (BLM) headquarters was moved to Grand Junction, Colorado, leading to the resignation or retirement of over 87% of affected employees. Experts warn that moving agencies en masse could result in a similar loss of institutional knowledge and operational inefficiencies.

Trump has been vocal about decentralizing the government, previously stating his desire to move up to 100,000 federal jobs “out of Washington to places filled with patriots who love America.” This strategy has raised concerns among D.C. leaders and government officials, as well as commercial property owners who rely on federal tenants.

Long-Term Economic Adjustments

While the relocations would undoubtedly pose short-term economic challenges, some analysts believe they could force the D.C. region to diversify beyond its reliance on federal employment. Terry Clower, director of the Center for Regional Analysis at George Mason University, suggests that reducing the federal presence could encourage the city to become more competitive in the commercial sector.

However, the process of moving agencies may take longer than anticipated. Government leases often contain long-term commitments, and terminating them prematurely could result in significant financial penalties. Data from the GSA indicates that fewer than half of government leases can be terminated without breaching contracts.

Next Steps for Federal Agencies

Beyond relocation, agencies have been instructed to focus on streamlining their operations. By March 13, they must submit recommendations for office consolidations and eliminations, alongside proposals for future organizational structures.

With the April 14 deadline looming, federal agencies face a tight window to assess the feasibility of these relocations. While the administration views this initiative as a cost-saving measure, the long-term economic and operational consequences remain uncertain.