DOD readjusting housing allowance at stateside bases
July 10, 2005
WASHINGTON — Defense officials are changing the calculations for housing allowances at stateside bases, which could give some troops rotating back less money than those already there.
Starting in January, the department will eliminate its geographic rate protection, which has ensured that BAH rates did not decrease even if a region’s housing prices did. BAH rates will follow the ups and downs of market rental costs, with payouts based on median prices for the area.
Tim Fowlkes, director of BAH, said the rate protection is no longer needed because BAH rates across the country currently reflect those median prices. The protection was designed to keep troops from receiving less than their expected allowance as officials spent the last five years adjusting the system.
“But now there are some areas now enjoying a higher BAH than needed,” he said. “It’s not always a function of the entire market; sometimes it’s possible that individual types of housing within an area can fluctuate in price, too.”
Troops with those inflated checks won’t see a drop in their housing compensation. Fowlkes said that individual rate protections will mean that no servicemembers will see a drop in their monthly checks.
But troops rotating back into those areas would see smaller BAH payouts than individuals already there, due to the new adjustments with the proper market rates, Fowlkes said.
He said he doesn’t expect any problems with those uneven payments. Troops already receive different payouts based on rank and years of service. And Fowlkes noted the BAH rates rely on a region’s median housing prices, leaving different families in different situations.
“If your house sits right on the median cost, then you’ll have no out-of-pocket costs,” he said. “But if you choose to rent a nicer, more expensive house, this won’t cover all the expenses.”
Col. Virginia Penrod, director of military compensation, said the BAH rates for 2006 won’t be released until late 2005, to more accurately reflect up-to-date housing prices.
None of the changes will affect the overseas housing allowance calculations, she said.