12/20/2011 06:00 pm ET Updated Dec 20, 2011

Cutting Federal Deficit Via Building Sales Doesn't Sit Well With Homeless Advocates

In Boston, an 11-story building near the city's financial district beckons homeless veterans with a range of assistance programs, including medical attention, job training and temporary apartments, all under one roof.

The building used to belong to the Veterans Administration, but today it's home to the New England Center for Homeless Veterans, a nonprofit agency that moved in not long after the passage of a landmark 1987 law aimed at increasing the availability of services and facilities to help homeless people. Under that law, the McKinney-Vento Homeless Assistance Act, nonprofit organizations that serve the homeless have the right to take over unneeded federal buildings before the government puts them up for sale. In the near quarter century since the adoption of the act, nonprofits have claimed about 500 former federal buildings.

But now the benefits of that law are colliding headlong into the contemporary realities of the federal budget deficit. The Obama administration is seeking to accelerate the sale of unused federal buildings in a push to generate $15 billion in revenue and savings over the next decade. Homeless relief organizations say a swifter sales process will bypass their shot at claiming buildings, limiting their ability to help vulnerable Americans just as stubbornly high unemployment and an extended foreclosure crisis puts growing numbers of people on the street.

"This idea is billed as a common-sense no-brainer, a painless way to reduce the debt," said Jeremy Rosen, policy director at the National Law Center on Homelessness and Poverty, an advocacy group. "But that's false -- utterly false -- when the needs are so great."

By seemingly any measure, homelessness is growing in the United States, while afflicting an increasingly broad slice of the country's population. This week, a study released by the the National Center on Family Homelessness found that 1.6 million American children -- or one in 45 -- are homeless. On any given night, more than 100,000 military veterans are homeless, according to the National Coalition for Homeless Veterans.

Finding affordable space for homeless service organizations to expand their programs and offer shelter has always been a challenge. These days, with demand for services soaring, agencies can scarcely afford to lose opportunities to claim free buildings or warehouses, Rosen said.

"What we're seeing is kids around the country living in cars and families living week to week in motels," Rosen said. "This is a time when we should really be focused on finding a way to make these properties work for families."

Under the traditional system that has governed implementation of the McKinney-Vento Act, federal agencies identify unused and unneeded properties every three months. The Department of Housing and Urban Development then evaluates which may be suitable for use as a homeless shelter, free clinic, food pantry or other community space. The Department of Health and Human Services then takes applications from organizations seeking to claim the properties free of charge.

The process has proven slow and cumbersome, giving federal agencies a disincentive to put properties on the list, said Danny Werfel, federal controller in the White House Office of Management and Budget. As a result many properties have languished, sitting vacant and unused on valuable land.

A heating plant occupying a two-acre parcel of land in the high-rent Georgetown section of Washington, D.C., has sat unused for more than a decade, Werfel said. The plant sits near a small, privately-owned townhouse that recently fetched $900,000. The administration now has the heating plant on the market, aiming to turn its considerable value into cash that can be used to trim the federal deficit.

"What's happened with that facility is exactly what we want to prevent," Werfel said. "We don't want there to be a situation in which a property of that size and value is sitting on our books."

President Obama last summer ordered federal agencies to sell federal buildings and reduce energy expenses in order to save $3 billion. Since then federal agencies have generated $1.5 billion in savings through such sales, according to the White House.

Now the administration is seeking to formalize an accelerated process of real estate sales, but they're contending with legal challenges from homeless advocates. Under the approach the administration has proposed a board of experts would identify the country's most valuable surplus properties. Much like the commission that identifies which military bases are to close, the board would send a list of valuable properties to Congress to be fast-tracked for sale. Congress would have the option to vote for or against the entire package, eliminating the possibility that a congressman or vocal constituent could lobby for one particular property or another to remain in the federal government's hands or be sold, Werfel said. The White House also claims that its proposal would also likely expand the list of properties available to nonprofit agencies.

To implement the President's plan, cut through the red tape and politics that continue to hinder efforts to get rid of unneeded federal property across the country, legislative action is required, said Moria Mack, an Office of Management and Budget spokesperson. Congress is expected to vote on at least one bill in January. If the law does not change, a case pending in a Washington, D.C., federal court could could also prevent the administration from implementing a new approach.

Nonprofit agencies, schools and other organizations would lose their first dibs on these properties, but could still put in applications for the buildings, with the federal government ultimately deciding whether to sell or give away the assets.

The federal surplus building inventory currently includes 1.1 million properties, Werfel said. So far this fiscal year, the government has sold 63 properties, earning $34 million in the process. In the last four fiscal years, homeless service agencies have successfully vied for 9 buildings.

In Boston, the New England Center for Homeless Veterans points to its own mammoth building as proof that the old system has played a crucial role. The nonprofit serves over 1,000 veterans each year and right now is transforming more of its emergency bed space into temporary apartments.

"We understand now that's what a lot of our veterans need to truly stabilize their lives," said Andy McCawley, the organization's president and CEO. "We're fortunate because we have the space to make that change."

This post has been updated to include comment from Moria Mack, a spokesperson from the Office of Management and Budget.