New BAH rates hike average stateside housing pay by 2%
Basic Allowance for Housing (BAH) paid to a million service members living off base in stateside areas will rise an average of two percent Jan. 1.
BAH for a typical enlisted member, in pay grade E-6 with dependents, will increase by an average of about $35 a month. BAH for a typical officer, a married O-3, will climb by about $40 a month.
Actual BAH rates for individuals, as well as the size of increases for 2012, will vary widely, determined by changes in local rents, a member’s rank or pay grade, and dependency status. Those who are married or have children will draw the higher “with dependents” rate in all housing areas.
BAH will jump an average of 41 percent, to $2040 a month, for members with families in Minot, N.D. The largest average BAH will be found in San Francisco, $3147 a month for all pay grades with dependents. More typical is average BAH of $1422 for married members in El Paso, Texas.
Again in 2012 many BAH recipients won’t see any housing allowance increase because rental costs in their area fell over the past year. Rents dropped in 35 percent military housing areas, said Cheryl Anne Woehr, BAH program manager for the Defense Department. But thanks to a “rate protection” feature, only members who arrive after Dec. 31 in areas where rents dropped will feel the affects of lowered allowances. The law shields other members from any cut in their tax-free housing payments.
“As long as they stay at the same duty station, have the same dependency status and are not demoted, they will keep the previous year BAH rate if that is the higher one,” Woehr said. “We do that because those service members already have housing commitments in their area that were based on the market at the time they made that commitment.”
Since 2008, BAH “without dependent” rates has benefitted from an artificial floor. These single member rates must match at least 75 percent of the local “with dependents" rate at the same pay grade.
Housing areas that will see larger percentage jumps in BAH include: Washington DC (9.9 percent); Fort Bragg/Pope Air Force Base, N.C. (9.6 percent); Morehead/Cherry Point Marine Corps Air Station, N.C. (9.5 percent) and Fort Campbell, Ky. (8.6 percent).
Areas where BAH will fall significantly include: Barstow/Fort Irwin, Calif. (-8.5 percent); Wichita Falls/Sheppard Air Force Base, Texas (-7.5 percent); Holloman AFB/Alamogordo, N.M. (-5.7 percent) and Beale AFB, Calif. (-5.2 percent). Individual rates for 2012 can be found online at: https://www.defensetravel.dod.mil/site/bahCalc.cfm
Also rising Jan. 1 will be military basic pay, by 1.6 percent, and basic allowance for subsistence (BAS) by 7.2 percent to match the increase in food prices during fiscal 2011 as measured by a Department of Agriculture food cost index. BAS for enlisted will increase from $325.04 a month to $348.44. Officer BAS, lower of the two, will rise from $223.84 to $239.96.
Service members living off base overseas get an Overseas Housing Allowance instead of BAH. OHA is based on what members actually pay in rent. It gets adjusted as the dollar’s value shifts against local currency.
Veterans using the Post-9/11 GI bill get a monthly “living” stipend equal to BAH in their area for an E-5 without dependents. VA will use new BAH rates to adjust the stipend next August before the start of the new academic year, said Keith Wilson, director of VA education services.
By law, stateside housing allowances “have to be based on the cost of housing for civilians with comparable incomes in the local area,” Woehr explained. BAH rates are set to cover 100 percent of median rental cost, utilities and rental insurance in each area based on the type of housing officials deem appropriate to a member’s pay grade and dependent status.
Local rental costs are collected from May through July when housing markets are most active. Most of data are gathered by military housing offices and exclude rents in high-crime areas, or where housing is poorly constructed or near environmental hazards, and mobile home parks.
The BAH law links only one group of members to a specific type of housing, Woehr explained. Junior enlisted grades (E-4 and below) with dependents must have BAH set high enough to cover the median cost of renting two-bedroom apartments and two-bedroom townhouses. With that as a foundation, officials developed a method to set rates by pay grade using rental data for six types of housing and different numbers of bedrooms.
The methodology and its appropriateness for setting BAH rates is reviewed periodically, most recently in 2010, said Woehr. No changes were needed, she added.
BAH payments will total $20 billion in 2012, up from $19 billion “and change” last year, Woehr said. The number of members on active duty eligible for BAH rose steadily over the last decade as the Defense Department privatized its inventory of military housing, replacing tens of thousands of aging units, on base and off, with housing built or renovated by private contractors. Privatized housing means more members qualify for BAH and forfeit that money as rent to reside in privatized communities.
Relatively few military members these days are assigned to base housing, with the “in-kind” housing benefit making them ineligible for BAH.
For the first time since the BAH program began in 1998, average rates fell slightly last year along with rents nationwide. A total of 400,000 members were helped by BAH rate protection. Fewer member will need rate protection in 2012, Woehr said, but the exact figure was unavailable.