- The Department of Government Efficiency (DOGE) may soon cut costs at the HUD and GSA, which could lead to staff cuts and operational changes.
- The Department of Housing (HUD), which oversees rental assistance, homeless programs, and affordable housing projects, is being scrutinized for its contracts.
- The General Services Administration (GSA), which manages federal real estate, is bracing for budget cuts of up to 50%, potentially setting a precedent for other agencies.
- DOGE’s cost-cutting could lead to broader workforce reductions, a freeze on new hires, and consolidated regional offices.
US federal agencies, including the Department of Housing and Urban Development (HUD) and the General Services Administration (GSA), are facing increased scrutiny under President Trump’s new Department of Government Efficiency (DOGE), per GlobeSt.
With HUD contracts under review and GSA facing a potential budget cut of up to 50%, the entire CRE industry may soon see more red tape and more delays when dealing with federal agencies in the coming months.
Staff Cuts, Office Consolidation
In a broader push to trim government costs, President Trump signed an executive order directing all federal agencies to work with DOGE on reducing their workforce. This includes large-scale reductions through attrition, layoffs, and a freeze on new hires.
Specific roles being targeted for cuts include administrative support, communications, stakeholder engagement, and internships, which are often integral to the day-to-day operations of federal real estate management.
Additionally, GSA’s regional and field offices are set to be consolidated into just four or five hubs, which could further complicate dealings for real estate professionals working with federal agencies.
The executive order is part of a larger strategy to make government operations more efficient but raises concerns about slowdowns that could impact the entire CRE industry.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Cutting to The Quick
Simply put, Elon Musk’s department aims to cut government spending and reduce headcounts, ostensibly by as much as possible.
The HUD—which plays a central role in managing rental assistance programs, providing funding for homeless shelters, and overseeing affordable housing—is under the microscope as DOGE demands employees justify their contracts.
A broad range of activities are being examined, from property management and inspections to research on how HUD programs are actually performing.
Nervous Sweating
Although the full impact of DOGE’s actions is still unclear, HUD employees and union leaders are concerned the new review process may delay or pause critical funding grants.
In particular, a $40M tool developed by HUD for inspecting public housing is reportedly slow and difficult to use, suggesting that some inefficiencies could be addressed.
However, the fear is that rather than streamlining operations, this degree of scrutiny could worsen already long delays and create new hurdles for real estate professionals relying on HUD-backed programs.
The Bigger Picture
The GSA, which oversees federal real estate management and government contracts, is also facing deep cuts. GSA’s $64B budget from the previous year is now under heavy review as DOGE pushes for more efficient operations.
In fact, reports suggest that the agency’s budget could be slashed by as much as 50%, potentially leading to massive layoffs and a reduction in its 12K-employee workforce.
These cuts may serve as a model for other federal agencies, a seismic shift in how the US government approaches its operations going forward.
The planned restructuring could also have a lasting effect on GSA’s ability to manage federal real estate deals and contracts in the future, adding complexity and delays for developers and CRE professionals who rely on GSA-managed properties.
