BAH rates bounce back with 2 percent average increase for 2012
WASHINGTON — Basic Allowance for Housing rates for servicemembers are on the rise again, ticking up an average of 2 percent next year, the Pentagon announced Thursday.
Last year for the first time since they were established in 1998, BAH rates fell slightly, a sign of a weak U.S. housing market and falling rental prices. The rates are set by ZIP code and determined by a survey of several types of rental properties in the area, ranging from two-bedroom apartments for junior enlisted troops with dependents up to full-sized houses often rented by senior officers.
Because rates are set locally and market conditions vary, BAH rates in about 35 percent of ZIP codes will decrease, with depressed Southern California housing markets leading the decline.
As usual, BAH payments to servicemembers already living in those areas won’t drop, BAH program manager Cheryl Anne Woehr said. That so-called “rate protection” ensures that servicemembers who sign long-term leases can continue to pay the rent, Woehr said.
Overall for 2012, there are fewer areas where rates dropped and more where they rose relative to 2011, she said.
More than 1 million servicemembers receive nontaxable BAH payments. For an E-6 with dependents, the 2 percent increase will result in an extra $35 per month in 2012, the Pentagon said. For an O-3 with dependents, the rate will rise by $40 per month in January.