The Defense Department announced rates for housing allowances for troops in the U.S. that will take effect Jan. 1.

The Defense Department announced rates for housing allowances for troops in the U.S. that will take effect Jan. 1. ( Daniel Malta/U.S. Army)

WASHINGTON — Families of service members stationed in the United States will see more financial assistance for housing in the new year, the Defense Department announced Thursday.

The new rates take effect Jan. 1, and military families in the U.S. will see an increase to their basic allowance for housing of 5.4%, the Pentagon said. Housing allowances totaling an estimated $27.9 billion will be paid to about 1 million service members.

“The [Defense] Department is committed to the preservation of a compensation and benefit structure that provides members with an adequate standard of living to sustain a trained, experienced, and ready force now and in the future,” the Pentagon said in a statement.

Families last year saw an average increase of 12.1% in their basic allowance for housing, or BAH, which reflected the largest year-over-year jump to housing allowances in many years.

Many service members have faced long waiting lists for on-base housing and found themselves priced out of quality off-base housing.

Basic housing allowance rates are calculated based on a service member’s rank, location and number of dependents. The payments aim to allow service members to afford housing on par with that of civilians earning comparable incomes in the local area.

Allowance calculations also factor in the average cost of utilities, including electricity, heat, water and sewer payments.

Since 2019, service members have been expected to pay about 5% of rental or monthly mortgage costs out of pocket.

Pentagon officials base new housing rates on cost data collected annually for approximately 300 military housing areas in the United States, including Alaska and Hawaii.

Members stationed overseas are not going to see an immediate benefit from the change as the BAH and Overseas Housing Allowance are based on different market and local survey data.

In May, defense officials announced troops stationed in foreign countries or outside the contiguous United States would see two periods of decreases in their overseas cost-of-living allowance beginning May 15 and again Nov. 15. The overseas cost-of-living allowance, or OCOLA, is a program for service members to offset overseas prices for goods and services such as groceries and clothing. This program does not address housing or utilities.

Service members can calculate their BAH payment by using the basic allowance for housing calculator online.

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Matthew Adams covers the Defense Department at the Pentagon. His past reporting experience includes covering politics for The Dallas Morning News, Houston Chronicle and The News and Observer. He is based in Washington, D.C.

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