The Landlord Lens - DOGE Goes After Section 8 Tenants

Episode Date: March 10, 2025

DOGE and Section 8 are going head to head as the government makes major cuts to HUD(Department of Housing and Urban Development). What does this mean for tenants and landlords?  In this video, we break down the impact of these cuts, the role of DOGE, and how the housing market could shift. #section8 #doge 

Jumping directly to the concern that the quality of the service at HUD, or specifically housing vouchers, is going to get worse, is incredibly alarmist. I don't think that Elon Musk or the folks at Doge are going to come in and actually improve outcomes. Hello, you may have heard the news, and you probably have certainly heard the news if one of your tenants is on the Section 8 housing voucher program. Doge is coming to HUD Elon Musk is planning right now to cut well not Elon Musk directly the Doge people are planning to cut a significant amount something like 200 million from the HUD budget

and it's got a lot of landlords nervous you know we're seeing a lot of videos come out on YouTube about this bigger pockets and a couple other groups are talking about it as well as cause for concern and so we're here to talk about it I'm a little worried. This is one of the only housing-related aid programs, if not one of the only ones, a significant one,

that provides housing assistance to the working poor here in America. And a lot of landlords today rely on it because a significant amount of the rent in any given unit is paid by the federal government. So, Seamus, I know you have a little bit of a different take besides anxiety, which is how I'm thinking. feeling right now, concern. What do you, what's your read on this situation? Yeah, it was interesting, John, to see the headlines of this. The big, bold number, right, that $260 million worth of cuts.

And it wasn't actually just the doge people. It was new HUD secretary, Scott Turner coming out and saying, hey, this is the waste we've been able to eliminate already. And we're just getting started, right? And so I think what's really important is to put into perspective is that HUD is actually about $52 billion annual budget in 2024. That's what their spending was. Yeah, wow. And then they distribute about $30 billion to that housing voucher or Section 8 housing program.

And so there's a lot of room in that budget, I'm sure. And it also makes that $260 million mark feel very, very small when it comes to actually interfering with the payments, you know, or the services being able to provide that are being provided by HUD through the voucher programs. And so I think similar to a lot of headlines recently, this probably doesn't have much of an impact at all on the lived experience of those, whether it's tenants that rely on the voucher program or landlords whose rentals are part of the affordable housing voucher programs and serve tenants across the state. Well, you hear a lot, though, about these large, huge waiting periods, right? These people that qualify for Section 8 that can never actually use their voucher or even get it. I guess when you framed that, right, this 50 million, 50 billion, excuse me, 50 billion budget,

and only 30 billion of those are being dispersed to pay the rent, I'm scared of any of those cuts touching the pieces that would slow down payments or slow down the actual ability for the Section 8 people to move in. Like that seems like a real risk. Yeah. And our friends over at Bigger Pockets recently cited in their article around 50% of the workforce within HUD, right, could be cut. And so, yeah, you could see that maybe there's a lot of individuals that are super part of that application process and create that waiting period no longer there. And maybe that waiting period extended. But I think it is really important to acknowledge that HUD today and specifically the housing voucher program isn't necessarily working well with an average weight.

time of 28 months to get someone who's been accepted as a tenant on the wait list, actually into a house, and up to eight years in the largest public housing authority areas, HUD today feels pretty broken from that standpoint, but the majority of that wait time is affordable housing and waiting for that affordable housing. And so as I see these headlines and think about Doge and the new secretary, really digging into HUD and trying to make it more efficient, I have a lot. I actually see a lot of upside. Hopefully moving landlords faster through that process, making the inspections easier and reducing those general wait times. So far, so far, most of the headlines I'm seeing from HUD are about cutting spend. And that is, yeah, that's an input to efficiency. But I haven't

seen anything about improving processes. I haven't seen anything about actually making the outcome from the government good. What if they just come in and see, oh, look, look at the spending cut, save from the podium and then bounce out, and now that eight years turns into 12, 16, and it's even more broken. You know, you can say, yeah, it's already broken, so why not break it more? But I think there's a lot of people in America, including those that, you know, part of their rental strategy is securing these types of tenants, would think that's a very bad outcome.

Yeah. What you have to look at, or at least trust, is that there's success criteria for the people doing this job in the local housing authority offices to actually increase the likelihood that the housing voucher programs are successful. And so as these cuts come in, there's opportunity to increase technology, a great deal in a lot of these government programs. You can go to the doge.gov site, and we were doing this earlier day, right, where you can just scroll through and see the opportunities for waste to be cut.

So I think jumping directly to the concern that the quality of the service at HUD, or specifically housing vouchers, is going to get worse, is incredibly alarmist. I don't think that Elon Musk or the folks at Doge are going to come in and actually improve outcomes. I think they're going to cut waste wherever they see there's not a direct correlation to outcomes, but they're not going to improve it. And so I guess I take issue with the idea that somehow these cuts, the 20 billion extra bureaucratic cost associated with the program is going to actually improve outcomes.

And I don't see a world where that actually happens. If Elon Musk were taking over HUD, right? If he became the HUD secretary and with his pedigree, yeah, maybe, right? Yeah, maybe. But I don't think he's doing that. I think he's creating a mandate to do spending cuts so that by the end of this, he has a new line item on his ruler of the world resume or whatever that says, look how many dollars I cut out of the U.S. government budget.

I don't think it has any incentive to actually help sectionate landlords or their tenants. Yeah, I think Secretary Scott Turner does, though, right? And even the headlines in you actually look at the quotes, they're all coming from him. They're not actually coming from Doge. What did he do before this? I believe he was an NFL player. Okay. At the end of the day, we're talking about such a small amount of money that is being cut from the

program. And once again, even the phrasing of it was the elimination of it. of waste. I know a lot of our landlords today have Section 8 tenants, and when those Section 8 tenants move on, they're going to want another Section 8 tenant. And they do not want to get the process they used five, six, seven years ago, because these are long-term tenants. They're great tenants. Absolutely. They don't want that process to be severely degraded the next time they go out to market. The way that process works for landlords is they go through a screening process in the same way they do today. They then fill out an application with the Housing Authority. And that

individual if they are qualified for a housing voucher is able to move in within an inspection. So that's interesting. So you're thinking if Elon Musk can bring some technology and it actually is checks that that waiting period might be able to be abbreviated. From my perspective, we have plenty of landlords that manage properties remote using technology and it's incredibly efficient for them to do, right? So there's no reason that that process should also enable HUD to the housing voucher programs to work more seamlessly. You're putting a lot of faith in Tanner Scott here. What's his name? Scott Turner. Scott Turner. Close.

You're putting a lot of faith. You're putting a lot of faith in Scott Turner. Do you remember who the HUD Secretary was before? Of course not. Yeah. Because bureaucracy is supposed to be boring. But apparently you put a lot of faith in them. So at the end of day, now that you know that this all exists, you're concerned with it? Absolutely. Yes. Because continuity is the point. And I trusted previous administrations to introduce continuity and maintain continuity. and this very much does not.

Do you still trust it when you know that the budget in 2019 was $29 billion, and that has increased to $52 billion now as of 2024? I trust it less when you say those numbers, but I still trust that the outcomes and the actual lived experience of people were maintained. But were they improved? Probably not. So with $20 billion of extra, funds in that for five years.

Yeah, I'm just saying you... Is there a benefit? You cut a huge operating budget. You should expect some fallout in the outcomes. That's all I'm saying. I actually think that's the entire point. All right. Well, I guess we're wrapping up here.

We'll agree to disagree. Luckily, this experiment's playing out live in the world and we'll be able to see the actual outcomes probably in the next six to eight months as our landlords and others start voicing. their experiences and I'm sure there will be a lot of tenant interviews as well in places like the New York Times, good to read. And I think it would be very interesting if we see different counties and public housing authorities across the country. Adaptive. Operate differently. And hopefully what we can get is some best practices that spread across the country as each of these have to

find their own ways to become a little bit more efficient. Laboratories of Democracy. TurboTenant is the all-in-one platform for landlords to manage their rental properties. From vacancy to tenancy, we have you covered with industry-leading tools and expert advice. Landlord better from anywhere for free at turbotenant.com.