Military Update

Housing shortages rise at many stateside bases; steps eyed to improve BAH program

By TOM PHILPOTT | | Published: May 19, 2011

The inability of homebuilders to secure construction loans in this weak economy, combined with major force realignments from Europe and other areas, has created housing shortages for families at many large stateside military bases, the Government Accountability Office reports.

The housing squeeze, which impacts at least 19 bases, isn’t going to be relieved anytime soon and will worsen in some areas, GAO explains in a new audit report on the effectiveness of rate-setting under the Basic Allowance for Housing (BAH) program.

“Adequate and affordable” housing for military families is in short supply at three quarters of bases identified as “growth” installations because they have gained, or will gain, at least 2000 personnel under long-planned shifts in U.S. force structure.

The shortage of family housing to rent in surrounding communities exceeds 20 percent at some stateside bases.  The policy of the department over the last two decades has been to rely largely on local communities to build housing for base populations.  They are incentivized to do so through housing privatization and build-to-lease agreements with local bases.

But recent economic conditions “have made it difficult for developers to obtain funding for new construction projects…particularly for multifamily rental housing projects,” GAO reports.  This is particularly true around bases experiencing frequent troop deployments for wars in Iraq and Afghanistan.  The constant turnover leaves many lenders uncertain about occupancy rates and income streams from proposed or new constructed projects.

GAO found significant housing “deficits” for families at four of the five bases that its own auditors visited for its report on BAH rates.

Cannon Air Force Base, N.M., projects a 20 percent family housing shortage (530 units) for its expanding base population.  The shortage will be aggravated by growth in the civilian labor force expected from major base construction projects.  Occupancy rates for rental housing in the community exceeded 99 percent in 2010 and 2011, with high demand reported “for even inadequate housing units on base” and off base rental in “less desirable areas.”  Rents are higher than monthly BAH rates for many members.

Fort Drum, N.Y., reports a shortage of 1700 family housing units, and increasing numbers of soldiers are relocating there without families so they can rent smaller units or share housing with other members.  More soldiers can only find affordable housing 30 to 40 miles from post.  Installation officials said housing availability will tighten even more next year when all but 1000 Fort Drum’s soldiers are to be home from deployment for the first time since the base saw a significant pop in its population.

At Fort Riley, Kan., the gap between supply and demand for family housing is 700 units, a shortage of four percent.  Demand is expected to climb by fall 2011 when all but one of the brigades assigned there will be home from deployment.  Housing officials anticipate that more and more Fort Riley families will have to go move far from post to find adequate housing.

The shortage at Fort Bliss, Texas, is 2900 family units, 15 percent of demand.  GAO says “junior personnel typically obtain housing on the outskirts of El Paso and experience long commutes.”  The housing supply is strained by families relocating from Mexico, GAO says, and will be strained further “as more soldiers return from deployment over the next year.”

At Camp Lejeune and Marine Corps Air Station New River, in North Carolina, the family housing shortage has reached 3500 units, or 20 percent of demand.  Marines there have closed the gap largely by buying or renting mobile homes.  The Department of Defense considers mobile homes “inadequate” housing and doesn’t include them in housing availability lists.

The services are using a variety of “tools” to address their housing challenges including housing privatization projects and closer collaboration between installations and communities, GAO says.  But auditors criticize the DoD for lacking a “formal communication process” to share information between installations on what’s available and working to ease shortages.

The primary focus of the GAO audit, however, was to review the BAH program for setting local allowances for members living off base in stateside areas.  GAO concludes that the $18 billion-a-year program generally is meeting its goals, and satisfaction is high among BAH recipients.  But auditors recommend several ways to enhance its effectiveness.

BAH rates are set using local cost surveys of rent, utilities and rental insurance for particular types of housing deemed appropriate for each pay grade, with and without dependents.  On average, more than 75 percent of BAH covers actual rent and more than 20 percent covers utilities, with renter’s insurance accounting for the remaining costs.

But the cost elements vary widely by locale.  GAO contends that BAH would be more effective if the local breakout of these costs were shared with housing officials and BAH recipients.   Actual utility costs, for example, can range from 8 to 40 percent of BAH.  Lacking information on local utility expenses, GAO suggests, can leave renters in high cost areas signing leases that bring unexpected out-of-pocket costs.

Also, GAO argues, “some landlords view the overall housing allowance rate as the market rental rate and set rental rates equal to the full housing allowance rate for a specific pay grade without regard to utility expenses that would also need to be paid.”

Officials with the Defense Travel Management Office, which sets annual BAH rates, told GAO that publishing all three elements of BAH in every housing area could be distracting for members as they might try to match each element to what’s available among local rental units.  But as a compromise, DoD officials will publish, starting in 2012, BAH cost elements nationwide as a percentage range across various types of housing.

Defense officials also accepted GAO recommendations to improve housing availability by sharing of best housing practices between bases, and to expand the definition of “available” rental properties in military housing areas to improve the accuracy of data collection for setting local BAH rates.

Read the GAO report on stateside military housing.

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