Hundreds of government employees are impacted by a restructuring at the Department of Housing and Urban Development. The move, made in response to sequestration, affects multifamily positions.
HUD announced Wednesday a series of restructuring and systemic changes within its Office of Multifamily Housing Programs and its Office of Field Policy and Management.
The move is a result of sequestration cuts that went into effect on March 1 as required by the Budget Control Act of 2011.
HUD Secretary Shaun Donovan warned in testimony delivered during a Senate Committee on Appropriations hearing in February that sequestration “be deeply destructive” and “damage the economy.”
Donovan was one of several Obama administration officials to warn Congress of serious consequences from sequestration.
As a result of the makeover, multifamily hubs across the country will be consolidated, while 16 smaller offices will be closed.
Employees who currently work in 50 offices will be consolidated into 10 offices that will report to five multifamily hubs in Atlanta; Chicago; Fort Worth, Texas; New York; and San Francisco.
Satellite offices will be located in Boston; Jacksonville, Fla.; Detroit; Kansas City; and Denver.
Roughly 900 of HUD’s 9,000 employees are impacted by the move, including some at HUD’s headquarters.
“Throughout implementation, HUD leadership will work on an ongoing basis to ensure employees are fully informed, and that all notification requirements for both union and non-union workers are satisfied,” the announcement stated. “Every affected employee will be offered the opportunity to continue working for HUD, though in some cases in a new location or role.”
It is the first restructuring of multifamily since 1998.
HUD Deputy Secretary Maurice Jones acknowledged in the statement that HUD’s current organizational model isn’t sustainable from a financial and a service delivery perspective.
“We are reviewing every aspect of our operation to determine if we have the right people in the right places and we’re determining where we can be even more efficient, to get the most value out of our limited resources,” Jones stated. “We’re in a different budget environment and we’re at a point where we must make some extremely tough choices.”
Implementation of the restructuring will begin in the fall and is expected to complete by 2016.
Expected annual cost savings at the multifamily operation range from $40 million to $45 million.
The Office of Field Policy and Management is closing 16 of its 80 field offices this year, reducing annual expenses by as much as $150 million over the following decade. Around 120 employees are impacted.
“All employees affected by both the multifamily restructuring and the field policy management office closings will be eligible for relocation assistance, or they can elect to take voluntary separation incentive pay or voluntary early retirement,” HUD stated.
