New HUD Secretary Leading Drastic Program and Staff Cuts at HUD

With the confirmation of Scott Turner, a former developer and Texas state legislator, as the new Secretary of the US Department of Housing and Urban Development (HUD) and the Department of Government Efficiency (DOGE) pushing forward drastic spending cuts, HUD contract and staff reductions are being implemented.

Secretary Turner served as Executive Director of the White House Opportunity and Revitalization Council (WHORC) during the previous Trump administration. During his confirmation hearing, Secretary Turner voiced support for policies that could challenge existing housing programs, including increasing the role of private equity in the rental market and eliminating diversity, equity, and inclusion (DEI) policy and program overlays.  He also testified to supporting additional barriers to housing assistance, such as work requirements. Following his confirmation, Secretary Turner launched the DOGE Task Force within HUD to “maximize governmental efficiency and productivity” and has since identified $260M in cuts.

The Elon Musk-led DOGE has aggressively targeted multiple arms of the federal government, including HUD. Specific actions include:

• Identifying $260M in cuts
• Notifying some housing organizations, including Enterprise Community Partners, that HUD intends to terminate their Section 4 nonprofit capacity building grants as well as funding for technical assistance programs that support community groups nationwide.
• Moving to cancel all awards for some contractors, citing “DEI”-related work and other factors following a review of their websites and LinkedIn profiles.
• Withholding $3.6B in Continuum of Care funds to nonprofits. Such funds aim to rehouse homeless individuals and families fleeing domestic violence
• Forecasting a 50% reduction of the HUD workforce, including eliminating half of HUD’s field offices serving local communities and severely reducing personnel in the offices of Fair Housing and Equal Opportunity (FHEO), Policy Development and Research (PD&R), and Community Planning and Development (CPD), all essential offices to HUD’s functioning. Cuts to CPD in particular could impact disaster recovery efforts despite increasingly severe disasters due to climate change.
• Closing all HUD field offices in 24 states, leaving most states without sites or staff to underwrite mortgages and address other housing issues. This potentially violates current federal law, which requires HUD to maintain at least one field office in every state
• Freezing access to $20M in Inflation Reduction Act (IRA) Greenhouse Gas Reduction Fund (GGRF) grants, leaving awardees in precarious financial positions, including being unable to make payroll. Such funding had the potential to support climate resilient and energy efficiency measures in new contraction and retrofit housing projects.

In response to these actions, a coalition of 25 Senate Democrats, led by Sens. Elizabeth Warren (D-MA) and Schmer (D-NY), sent a letter to Secretary Turner demanding transparency on the Task Force and its potential impact on housing programs. Such cuts would drastically impede HUD’s ability to serve the public and exacerbate the existing housing and homelessness crisis. The LeSar team will continue to track such concerning developments and their impact on our clients and our industry.