We know D.C. Get our free newsletter to stay in the know.

This building, slated to become the new headquarters for DHS administrators, could stay boarded up a while longer.

The title of the January report from the House Committee on Homeland Security’s Republican majority didn’t leave much room for doubt on the lawmakers’ position. “Reality Check Needed: Rising Costs and Delays in Construction of New DHS Headquarters at St. Elizabeths,” it read. And so when another Republican-led House committee issued a report last month on the effort to build new facilities for the U.S. Department of Homeland Security on the west campus of the former St. Elizabeths mental hospital near Congress Heights, its conclusion wasn’t much of a surprise.

The House Appropriations Committee, reports the Washington Post, recommended that the $323 million requested by the administration of President Barack Obama to fund the project for fiscal year 2015 be cut substantially—-all the way down to zero.

Meanwhile, the Democratic Senate has recommended stripping $25 million from the administration’s request. One way or another, it looks like the project won’t be funded nearly as much as DHS and the General Services Administration, which manages federal office properties, had hoped.

That’s obviously bad news for the DHS headquarters project, which is already wildly delayed. (Initially set to be completed this year, the estimated finish date is now 2026, and will likely be pushed back further.) What it means for the surrounding neighborhood is less clear.

Adjacent Congress Heights, and to a lesser extent neighboring Anacostia, has been banking on the St. Elizabeths project to inject new investment and life into the poverty-stricken area and help spark other development and retail. St. Elizabeths has two halves: Across Martin Luther King Jr. Avenue SE from the federal complex is the east campus, owned by the D.C. government and slated for a massive mixed-use redevelopment. The east campus has also experienced major delays, first when the city canceled its initial solicitation for developers and again last month when the city nixed its hunt for firms to build infrastructure there.

If the DHS relocation to the west campus is derailed altogether, that wouldn’t mean a total federal abandonment of the property, since the Coast Guard has already moved there. But it would significantly scale back the federal presence. Some city leaders have stressed the importance of a federal anchor for the area. “The only developer in the U.S. that consistently puts up money for historic properties is the federal government,” Del. Eleanor Holmes Norton said in 2007, when the DHS move was under consideration.

Still, it’s hard to imagine that neighbors of St. Elizabeths will shed many tears over the loss of the headquarters. The promise of economic revitalization driven by the federal presence is almost certainly overblown; just look at the Coast Guard, few of whose employees actually venture into Anacostia or Congress Heights to spend their dollars on food or other goods. Nearby Bolling Air Force Base might as well be in Texas, given how little time (and money) its workers spend in the adjacent neighborhoods. Many people would argue that the city would be better off with a publicly accessible area, full of residences or offices or park space, at the Bolling site than a military base.

If the federal government is unable to do anything with a portion of its St. Elizabeths property, it could do what it’s done with the east campus and much of the Walter Reed Army Medical Center: give or sell it to the District. It could become an extension of the east campus, and allow Martin Luther King Jr. Avenue to become a vibrant corridor through the site rather than the dividing line between its federal and local halves. Of course, given the city’s track record of developing its portion of St. Elizabeths, that might not happen quickly or efficiently. But for Congress Heights and Anacostia, it could be a better long-term outcome.

Photo by Aaron Wiener