Bill Overview
Title: To amend title 40, United States Code, to modify the treatment of certain bargain-price options to purchase at less than fair market value, and for other purposes.
Description: This act specifies that a bargain-price purchase option (i.e., the option to purchase property at less than fair market value) in a lease agreement for a federal building may be exercised only to the extent the option is specifically provided for in subsequent acts of Congress. The act applies to lease agreements that are entered into on or after January 1, 2021.
Sponsors: Rep. Guest, Michael [R-MS-3]
Target Audience
Population: Individuals involved in federal building leases and management
Estimated Size: 100000
- The bill affects lease agreements involving federal buildings.
- Federal buildings are generally managed by certain federal agencies and utilized by government entities, potentially affecting government operations.
- Private sector entities that lease federal buildings could also be impacted if they have or expect bargain-price purchase options.
- The primary individuals directly affected are those involved with federal real estate management, federal tenants, and lease agreement holders.
- The general public is impacted indirectly as changes in federal property management can affect how government funds are allocated and used.
Reasoning
- The primary impact of this bill will occur among federal agencies responsible for managing leases of federal buildings, tenants of these buildings, and any private sector entities involved in leasing these buildings. Given the substantial federal budget allocated to building management and maintenance, the policy could affect financial transactions and operational planning.
- Lease agreements that include bargain purchase options are generally a strategic economic decision for lessees. Limiting these options can change future planning for both federal agencies and private entities, potentially affecting budgets, project timelines, and operational strategies. The generated interviews will consider a range of typical people involved in different capacities with federal leases.
Simulated Interviews
Federal Property Manager (Washington, D.C.)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I think this policy will add an extra layer of bureaucracy to acquiring properties that our agency already has plans for.
- It might delay some projects, but we can adapt if Congress approves necessary purchases timely.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Real Estate Investor (New York City, NY)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Limiting bargain purchase options makes the federal leasing less attractive for investment.
- Our firm will need to re-evaluate some strategies as we potentially lose affordable property acquisition opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 4 | 7 |
| Year 20 | 4 | 6 |
Government Contractor (Chicago, IL)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 8.0 years
Commonness: 10/20
Statement of Opinion:
- This bill could destabilize our planning for new projects in leased federal buildings, affecting our timelines and budgets.
- Without certainty in lease purchase options, costs might increase, impacting our operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 6 |
Retired Federal Employee (San Francisco, CA)
Age: 64 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- I believe this bill is a good step toward responsible management of federal assets.
- While it may slow transactions, it ensures that purchases are carefully scrutinized.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Federal Building Tenant (Seattle, WA)
Age: 29 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- While I'm not directly affected yet, changes in lease terms due to policy could increase future costs.
- I support sustainable management, but hope the policy won't lead to higher rental costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 7 | 5 |
Federal Agency Financial Planner (Dallas, TX)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 13/20
Statement of Opinion:
- This policy requires us to update our long-term budget plans, introducing more legislative dependencies.
- While it can slow processes down, it's ultimately about fiscal responsibility.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 6 |
Congressional Staffer (Los Angeles, CA)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 1.0 years
Commonness: 9/20
Statement of Opinion:
- The legislation adds necessary oversight to federal property acquisitions.
- It's a positive change towards transparency and fiscal accountability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Urban Planner (San Antonio, TX)
Age: 33 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 11/20
Statement of Opinion:
- This bill makes coordination with federal entities more complex, as new layers of approval are needed.
- Adaptation is key, but it can slow urban project developments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 7 |
Federal Agency Lease Officer (Boston, MA)
Age: 47 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- The new restrictions could affect flexibility in property acquisitions,"
- Changes will require additional oversight and potential delays in federal property management.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Federal Building Maintenance Supervisor (Atlanta, GA)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 15/20
Statement of Opinion:
- Future projects in building upkeep might be postponed due to the new policy affecting lease agreements.
- We'd prioritize needs, but there's concern about potential funding shifts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $20000000 (Low: $15000000, High: $25000000)
Year 2: $20500000 (Low: $15500000, High: $25500000)
Year 3: $21000000 (Low: $16000000, High: $26000000)
Year 5: $21500000 (Low: $16500000, High: $26500000)
Year 10: $22000000 (Low: $17000000, High: $27000000)
Year 100: $38000000 (Low: $30000000, High: $46000000)
Key Considerations
- Changes in policy require close cooperation between Congress and federal agencies to ensure compliance.
- While anticipated costs are manageable, agencies may still face challenges in adjusting leasing practices, potentially impacting negotiations with private entities.
- Coordination across multiple agencies is essential to manage any administrative adjustments to lease terms efficiently.