Elon Musk's DOGE Era: How Real Estate Could Be Different Under Trump's New Administration

The federal government’s massive real estate footprint faces scrutiny as Tesla CEO Elon Musk and former presidential candidate Vivek Ramaswamy prepare to lead Donald Trump’s new Department of Government Efficiency, nicknamed DOGE.

Their mandate to slash federal bureaucracy could reshape office markets nationwide.

“The implications to the real estate industry in the U.S., now facing a pullback in federal demand, would be profound,” warned Brendan Wallace, CEO of Fifth Wall, in a CNBC interview last week. The federal government currently leases approximately 150 million square feet, costing $5 billion annually, with roughly half the leases cancelable within six months.

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While Washington D.C. would feel the heaviest impact from any federal space reduction, Wallace said the ripple effects would reach across the country. The timing proves particularly challenging for an office sector already grappling with existential questions about space demand.

However, some industry experts see potential opportunities amid the disruption. “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,” suggests David Dworkin, president of the National Housing Conference, to Housing Wire.

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The initiative’s strict return-to-office mandate could trigger workforce changes. Musk and Ramaswamy’s Wall Street Journal op-ed embraces potential “voluntary terminations,” while simultaneously exploring options to monetize federal real estate assets through vehicles like REITs.

Beyond office space, Wallace identifies AI’s emerging influence on real estate markets as another factor. “The real estate industry is just now grappling with some of these big questions not just about how AI is going to make our business more efficient, but how it’s going to fundamentally change the business of real estate itself,” he explains.

Pat Cave, senior vice president at Enterprise Community Partners, argues against assuming negative outcomes. “I think the assumption that Trump is bad for housing is false,” he told Housing Wire, citing increased housing investments during Trump’s first term.

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The initiative’s exact impact remains unclear, though housing agencies already face staffing challenges. Jung Choi of the Urban Institute notes both HUD and Ginnie Mae operate understaffed, potentially complicating program implementation, particularly for natural disaster response.

The potential privatization of government-sponsored enterprises adds another layer of uncertainty. “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, pointing to possible shifts in housing finance policy under the new administration.

As DOGE takes shape, its influence could extend beyond direct federal real estate holdings to shape broader market dynamics, from office demand patterns to housing policy implementation.

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