PRIVATIZED HOUSING RESIDENTS TO FEEL ‘BAH’ PINCH TOO
Families living in privatized military housing units will not escape the impact of moves Congress made last month to dampen the value of Basic Allowance for Housing (BAH), says a Defense Department housing expert who is coordinating with service branches to implement the changes.
The result will be that families moving into privatized base housing will begin to pay rent that is one-percent higher than their monthly BAH, and could be 3 percent higher by 2017.
Older generations of military retirees and veterans might not know that, starting in 1997, the services began to enter partnerships with private developers to renovate or build, and then manage and maintain, stateside family housing. Today there are 205,000 privatized military housing units, mostly apartments and townhouses but also single family homes.
Indeed, the only stateside housing the military still owns are historic general officer quarters and small clusters of homes at small, remote bases where no private partners could be enticed to cut takeover deals.
Families electing to live in privatized base units sign rental contracts that, until this year, had one unique feature: rents always matched their monthly BAH. Those who agree to pay using payroll allotment avoid having to pay a month’s rent as a security deposit. Other occupants must write monthly checks or arrange electronic transfers to the housing management company just like families have to do renting on the local economy.
Congress last month voted to allow BAH rates, starting in 2015, to be trimmed in two ways: by setting rates to cover only 99 percent, not 100 percent, of average rental costs for members’ pay grade and assignment area; also by no longer including in BAH added dollars to cover the expense of renter’s insurance in case personal property is damaged or stolen.
Both changes are reflected in BAH rates published Jan. 1. And as military renters moving into housing on the economy feel the effect of slightly dampened allowances, so too will families moving into privatized base housing, the Defense official said. He declined to be named so he could speak more frankly about privatized housing and new BAH changes.
“The basic premise is that whatever is happening to everybody in town, whatever added burden they’re bearing whether it’s one percent [of average rental costs] out of pocket or absent renter’s insurance, then people on base will bear the same burden,” said the official.
A BAH rate protection rule ensures that families living off base they won’t see a drop in allowances unless they move to new assignments or have to change residences. That same rule protects those already residing on base. As long as they stay in current base housing, they won’t have to pay rent in excess of monthly BAH.
Sometime soon, however, Army, Air Force, Marine Corps and Navy housing officials will give notice that members moving into privatized housing will have to pay rent equal to BAH plus one percent. That will match the one-percent absorption rate designed into 2015 BAH rates, and already being felt by new occupants of housing on the local economy.
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