{"id":181937,"date":"2025-04-04T10:44:34","date_gmt":"2025-04-04T16:44:34","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=181937"},"modified":"2025-04-04T10:48:31","modified_gmt":"2025-04-04T16:48:31","slug":"doge-vs-cfpb","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/doge-vs-cfpb","title":{"rendered":"How DOGE’s Targeting of CFPB and HUD Really Impacts Real Estate"},"content":{"rendered":"\n

It seems like almost<\/span> everyone has a strong opinion on the Elon Musk-led Department of Government Efficiency (DOGE) that fits in with the partisan divisions that have become so prominent in our society today.<\/span> Some have even gone so far as to <\/span>set Tesla cars on fire<\/span><\/a>. Personally, though, I\u2019m <\/span>rather<\/span> ambivalent.<\/span><\/p>\n\n\n\n

For one, the U.S. government is <\/span>clearly<\/span> bloated, <\/span>spending $6.9 trillion <\/span>per year<\/span><\/a> as of 2024, with <\/span>enormous amounts of waste and cronyism<\/span><\/a>. On the other hand, it is an undeniably <\/span>bad<\/span> look to have the <\/span>richest<\/span> man in the world leading a group that\u2019s firing thousands of people. The host of <\/span>overblown and exaggerated claims <\/span><\/a>coming<\/span> from DOGE hasn\u2019t helped either. <\/span><\/p>\n\n\n\n

The <\/span>biggest<\/span> effect DOGE could have on the housing market is <\/span>by far<\/span> its face-off with the Department of Housing and Urban Development (HUD). <\/span>According to HUD\u2019s Trump-appointed Secretary, <\/span>there are<\/span> $260 million in cuts coming<\/span><\/a>, and some reports claim that as much as 50% of HUD\u2019s workforce could be laid off.<\/span><\/p>\n\n\n\n

While such an action would <\/span>certainly<\/span> save taxpayers money, it could also result in <\/span>a variety of<\/span> problems, including delays in Section 8\u2019s (already slow) payments.<\/span> For more about this political fight and the consequences it could have for real estate investors, please see Jeff Vasishta\u2019s <\/span>excellent article here on BiggerPockets<\/span><\/a>.<\/span><\/p>\n\n\n\n

DOGE\u2019s Many Targets<\/span><\/h2>\n\n\n\n

DOGE\u2019s first <\/span>major<\/span> target was USAID. While admittedly USAID does provide important services to poor nations, the agency has also wasted a lot of money in <\/span>a sometimes absurd fashion<\/span><\/a>, including $2 million for pottery classes in Morocco, $20 million to make a Sesame Street-like show in Iraq, $2 million to help fund gender transitions in Guatemala, and $1 million for the lab in Wuhan where COVID-19 very well might have leaked from. <\/span><\/p>\n\n\n\n

Moreover, USAID has a dark underside. One of its primary beneficiaries is the National Endowment for Democracy (NED). <\/span>In fact,<\/span> the NED received <\/span>about 90% of its $3 billion budget<\/span><\/a> from USAID in 2023, making it a de facto government agency.  And the government agency it resembles most is the Central Intelligence Agency. As the NED\u2019s cofounder Allen Weinstein <\/span>put it<\/span><\/a>, \u201cA lot of what we do today was done covertly 25 years ago by the CIA.\u201d<\/span><\/p>\n\n\n\n

For anyone <\/span>who\u2019s<\/span> wondering, the CIA doesn\u2019t <\/span>exactly<\/span> have a good history of supporting democracy.<\/span> <\/span><\/p>\n\n\n\n

Indeed, the NED has <\/span>been caught<\/span> meddling in multiple countries’ internal politics<\/span><\/a> and supporting numerous color revolutions since its founding. <\/span>Perhaps this is worthwhile, but in <\/span>the humble opinion of this author<\/span>, the U.S. government has no business interfering in the politics of foreign nations in this <\/span>way<\/span> and certainly shouldn\u2019t be doing it on the taxpayers\u2019 dime.<\/span><\/p>\n\n\n\n

Unfortunately, DOGE hasn\u2019t done much to <\/span>go after<\/span> corporate welfare<\/span><\/a> or the <\/span>bloated military budget<\/span><\/a>. But it\u2019s also important to recognize that not all taxpayer money is so poorly spent. <\/span>And one<\/span> of DOGE\u2019s more recent targets would save little money and could genuinely harm consumers<\/span>, as well as<\/span> real estate investors.<\/span> <\/span><\/p>\n\n\n\n

DOGE vs. the Consumer Financial Protection Board<\/span><\/h2>\n\n\n\n

Thus, we turn to DOGE\u2019s battle with the Consumer Financial Protection Board (CFPB), the brainchild of left-wing Senator Elizabeth Warren that <\/span>was <\/span>founded<\/span> in 2011<\/span><\/a> in the wake of the real estate collapse and financial crisis. DOGE almost immediately put the CFPB in its sights, and on Feb. 10, the Trump administration <\/span>stopped work at the CFPB<\/span><\/a>. <\/span>A court injunction <\/span>prevented the agency from being shut down<\/span><\/a> for now, but <\/span>as of this writing,<\/span> its future is very much in doubt.<\/span><\/p>\n\n\n\n

While initially, this should seem like a clear-cut case of a partisan disagreement, remember that Trump ran as a populist, so ending a consumer protection agency shouldn\u2019t necessarily fit with his ostensible agenda.<\/span><\/p>\n\n\n\n

Furthermore, the CFPB\u2019s annual budget is just <\/span>$823 million<\/span><\/a> as of fiscal year 2023, <\/span>and it has<\/span> a staff of under 1,700. <\/span>This<\/span> may sound like a lot, but with a federal budget of <\/span>$6.8 trillion <\/span><\/a>in 2024, it\u2019s mere peanuts in savings. <\/span><\/p>\n\n\n\n

There are certainly some legitimate criticisms of the CFPB. <\/span>For one, <\/span>it is well known that<\/span> excessive regulation can reduce economic growth<\/span><\/a>.<\/span> Regulation also tends to hurt smaller firms more than bigger ones<\/span>, given the <\/span>larger<\/span> relative compliance costs<\/span>.<\/span><\/p>\n\n\n\n

Another criticism is that the CFPB has tended to be reactive. <\/span>It has stopped some abuses and punished offenders<\/span>, <\/span>but <\/span>it<\/span> has not stopped a <\/span>major<\/span> scandal from occurring.<\/span> <\/span><\/p>\n\n\n\n

But by far the most legitimate critique is that the CFPB is not subject to congressional budget approval, which gives it a lot of power to act without much oversight to restrain it. This could definitely lead to political bias, especially given it was set up by leading Democrats, <\/span>as well as<\/span> the ability to abuse its power.<\/span><\/p>\n\n\n\n

That <\/span>being said<\/span>, <\/span>such a problem could easily be remedied<\/span> with reform. <\/span>How about legislation <\/span>to make<\/span> the CFPB answerable to Congress instead of <\/span>simply<\/span> ending it?<\/span> After all, when you look at what the CFPB has done, it\u2019s hard to argue with much of it:<\/span><\/p>\n\n\n\n