For decades, federal agencies acted as the quiet ballast of the U.S. office market, occupying space others avoided and signing leases that smoothed out cycles. That role is changing. After years of studying attendance, telework, and utilization, the government is beginning to give space back, not all at once, but steadily and with little fanfare.

The shift is most visible where federal footprints are deepest, especially Washington, D.C., but it stretches far beyond the capital. From Atlanta to Northern Virginia to Los Angeles County, millions of square feet sit in leases that can now be exited with relatively short notice. Much of that space is older, more utilitarian office stock, buildings that were already drifting toward the edge of relevance in today’s market.

Rather than triggering a sudden collapse, the pullback is accelerating decisions that were long overdue. Owners are being forced to confront what these buildings are really worth and what they might become next. In that sense, federal lease exits are less a shock than a clearing mechanism, pushing aging office inventory toward reinvestment, reinvention, or conversion as the market recalibrates.

Sergey Brin has become one of the most prominent financial backers of Building a Better California, a new political effort forming as lawmakers debate a potential wealth tax aimed at the state’s richest residents. Brin has committed roughly $20 million to the group, making him its largest known donor and signaling growing concern among tech leaders about how California addresses affordability and taxation at the same time.

The backdrop is a proposed wealth tax that would apply to individuals with net worth above $1 billion, structured as a one time levy rather than an ongoing annual tax. Supporters argue it could generate tens of billions of dollars for public priorities, while critics warn it could accelerate capital flight and residency changes among high net worth Californians. The proposal has not been enacted, but its introduction has already reshaped political organizing around fiscal policy and housing.

Building a Better California is positioning itself as an alternative path. Rather than raising revenue through a wealth tax, the group is focused on policies that expand housing supply, streamline permitting, and reduce construction bottlenecks that have kept prices elevated for years. Its early messaging emphasizes faster approvals, zoning reform, and targeted affordability programs as a way to lower costs structurally rather than redistribute wealth after the fact.

Brin’s involvement highlights a broader shift in the affordability debate, where housing supply is increasingly framed as the core economic issue rather than wages or taxes alone. As the state heads toward future ballot fights and legislative showdowns, the scale of Brin’s contribution suggests housing policy may become the central arena where California’s wealth tax debate is ultimately decided.

President Trump’s nomination of Kevin Warsh to lead the Federal Reserve would bring back a figure deeply associated with the Fed’s response to the financial crisis and increasingly vocal criticism of how the central bank has operated since. Warsh served as a Fed governor from 2006 to 2011, advising through the collapse of Lehman Brothers and the rollout of emergency liquidity programs. While he supported early crisis interventions, he later opposed the Fed’s prolonged use of quantitative easing and warned that an ever-expanding balance sheet risked distorting asset prices and blurring the line between monetary and fiscal policy.

Since leaving the Fed, Warsh has sharpened that critique. He has argued publicly that the Powell Fed damaged its credibility by misreading inflation and reacting too slowly as prices surged, calling for a “regime change” in how the central bank approaches policy, communication, and accountability. At the same time, he has increasingly emphasized that tighter monetary credibility could give the Fed more room to cut rates without reigniting inflation, especially if productivity gains from technology and AI help absorb cost pressures. That framing positions rate cuts not as stimulus, but as a correction after policy errors.

Warsh’s views also line up closely with Trump’s stated desire for lower interest rates. While once seen as relatively hawkish, Warsh has recently argued that the Fed’s current stance is unnecessarily restrictive and has weighed on growth, housing, and investment. If confirmed, markets are likely to interpret his leadership as more open to rate reductions than the current Fed, even if paired with efforts to shrink the balance sheet and narrow the Fed’s mandate. The combination suggests a central bank that cuts rates while trying to reassert tighter control over its long term footprint in financial markets.

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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