HousingWireHousingWire
Ever since president-elect Donald Trump announced his appointment of onetime Republican presidential candidate Vivek Ramaswamy and Tesla CEO Elon Musk to co-lead a new “Department of Government Efficiency,“ housing agencies have been on edge.
The soon-to-be-created department is ironically referred to as DOGE — a nod to the dog-themed cryptocurrency by the same name that skyrocketed in value after Musk promoted it. It will be tasked with “eliminating government bureaucracy” and is likely to cut some jobs that are deemed unnecessary. The department would operate outside of the federal government’s control.
Musk, who announced on Trump’s campaign trail a call for “at least” $2 trillion in cuts to federal spending, has not disclosed which areas would receive cuts. He also posted on his social platform, X, that the government needs only 99 agencies — not the estimated 428 that exist.
In a recent op-ed published in The Wall Street Journal, Musk and Ramaswamy wrote that they support a five-day workweek from the office for federal employees, which could result in a “wave of voluntary terminations that we welcome.”
The announcement of DOGE leaves a lot of unanswered questions, leaving economists and analysts to speculate as to which departments could see heavy cuts. Pat Cave, senior vice president of policy at Enterprise Community Partners, suggested that housing agencies are jumping the gun with assumptions.
“I think the assumption that Trump is bad for housing is false,” Cave said. “We have seen in the last Trump administration increases in housing investments, both in appropriations as well as in tax credits. So, again, I feel confident that we’re going to increase the housing supply and reduce cost in any administration, because it’s bipartisan.”
David Dworkin, president and CEO of the National Housing Conference, said that “everyone is at risk if all [they] want to do is cut people.” He added that Musk’s and Ramaswamy’s recommendations for an end to remote work will lead some employees to leave altogether.
“The work-from-home opportunities have had a devastating impact on the economy of D.C. and have threatened its recovery and success. People have to come back to work,” Dworkin said. “If they want to improve efficiency and make the taxpayers’ dollar go further, there are going to be opportunities. And there will always be people that don’t want to be a part of that.”
Some departments, in Dworkin’s opinion, don’t have to worry about the potential impacts of DOGE’s ambitions to clean house.
“When it comes to the Department of Housing and Urban Development (HUD), the most important thing to recognize is that they’re already woefully understaffed,” Dworkin said. “There are many opportunities for automation that would make it easier for the staff to do their jobs like the grant-making and monitoring process, HUD vouchers and FHA vouchers, and project execution.
“… Having someone come in from outside who can understand everything technology can do may be an opportunity to save money without threatening the current workforce.”
The most recent development for HUD was announced last week when Trump appointed Scott Turner, the former executive director of the The White House Opportunity and Revitalization Council, to serve as its next secretary.
Jung Choi, a principal research associate at Urban Institute, added to Dworkin’s sentiment. “HUD and Ginnie Mae are already pretty understaffed, so I don’t know if they further cut the people there. There might be further delays in implementing some of the programs, especially related to natural disasters,” she said.
Dworkin has a positive outlook on what Musk and Ramaswamy can bring to the table.
“Prior HUD secretaries had done a good job at improving HUD’s technology as much as they could, given the resources they had,“ he said. “So, I would encourage these two technology geniuses to look at the legacy systems of HUD and Ginnie Mae and ask how they can take this technology beyond the 21st century. I think people at HUD want those programs to work better, but they’re tied up in red tape that often predated them.
“What is often misunderstood as some deep state is often bureaucratic inefficiencies that can be improved significantly and would actually increase morale,“ Dworkin added. “When you look at Elon Musk, there are examples of horrific failures and incredible successes. And where he’s successful, he’s beyond anyone’s imagination. I’m happy to hear what he has to say about making government more efficient.”
Cave thinks it “may be speculation that there is antipathy or antagonism towards nonprofits” that is causing negative reactions to DOGE. He emphasized that nonprofits actually have an upper hand in this scenario.
“I feel confident that the track record alone of Enterprise (Community Partners) for 42 years makes a very strong statement that if you care about the high cost of housing for Americans, both renters and owners, we have something smart to say. So, come talk to us. I believe that is our credibility in speaking to how to reduce housing costs and increase supply, which I assume President Trump has said he really cares about and wants to solve.”
Choi noted that the Urban Institute is keeping an eye on how Fannie Mae and Freddie Mac could be affected by DOGE. “I mean, it wasn’t directly mentioned by Trump himself, but then [Mark] Calabria and other people did suggest that GSEs should be released from their conservatorship,” Choi said.
One concern Choi brought up was the state of the Low-Income Housing Tax Credit (LIHTC) program under the new administration. LIHTC gives state and local allocating agencies “the equivalent of approximately $10 billion in annual budget authority to issue tax credits for the acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households,” per HUD.
“I think people are thinking that LIHTC would survive and the vouchers would decline. Some researchers project that only 30% of the money spent on LIHTC is actually benefiting the renters, while the vouchers actually have a larger chunk of the share that directly supports the renters,,” Choi said.
“But then it does seem that LIHTC is going to be more in the favorable agenda for the Republicans also, so the LIHTC funding might stay the same or increase, but the voucher funding may decline. So, that’s our overall sense of the HUD programs that would be impacted.”
