Also coming: a new pay allowance and efforts to improve child care, employ spouses and ease change-of-station moves
The Defense Department’s personnel chief unveiled a list of initiatives Thursday aimed at improving the quality of life for service members, including — for the second year in a row — a temporary boost in Basic Allowance for Housing for some active duty members.
In many markets, the housing allowance, which is adjusted at the start of each calendar year, has not kept up with the soaring cost of housing, according to a memo from Defense Secretary Lloyd Austin. In 28 Military Housing Areas, the allowance falls short of the actual cost of housing by more than 20%.
About 114,267 service members in those 28 areas of the country can look forward to an automatic bump in their BAH, starting in October.
“The action ordered by the Secretary today reflects the department’s commitment to honor our troops’ service and ensure we continue to offer a competitive suite of benefits that makes DoD an employer of choice for those who so selflessly serve,” Gil Cisneros, the defense undersecretary for personnel and readiness, told reporters Thursday.
It’s not immediately clear whether there will be an across-the-board percentage increase in troops’ BAH, but the dollar amount of the increase will vary based on location, rank, and whether or not there are dependents, as it did in the temporary BAH increases in 2021.
For example, for an E-6 with dependents living in the Kings Bay, Georgia, area, the increase will be $198 a month; for an E-5 with dependents in Boston, it will be more than $1,100 a month, according to Jeri Busch, DoD’s director of military compensation.
The 28 Military Housing Areas are:
- Vandenberg AFB, California
- Twenty-Nine Palms MCB, California
- San Diego, California
- Dover AFB/ Rehoboth, Delaware
- Patrick AFB, Florida
- Miami/Fort Lauderdale, Florida
- Orlando, Florida
- West Palm Beach, Florida
- Volusia County, Florida
- Fort Myers Beach, Florida
- Kings Bay/Brunswick, Georgia
- Maui County, Hawaii
- Chicago, Illinois
- Boston, Massachusetts
- Cape Cod–Plymouth, Massachusetts
- Martha’s Vineyard, Massachusetts
- Brunswick, Maine
- Coastal Maine, Maine
- Fort Leonard Wood, Missouri
- Helena, Montana
- Wilmington, North Carolina
- Northern New Jersey
- Newport, Rhode Island
- Providence, Rhode Island
- Beaufort/Parris Island, South Carolina
- Knoxville, Tennessee
- Houston, Texas
- Quantico/Woodbridge, Virginia
For the past two years, service members in many locations have battled an unusually volatile housing market, with rentals being in short supply and priced well beyond troops’ housing allowances.
Some have resorted to living in RVs on installation campgrounds; some have rented housing far from base; some have had to live in unsafe areas, and others have left their families behind as they tried to find housing.
Many who have wanted to purchase homes have found themselves outbid by other buyers offering tens of thousands of dollars more than the asking price. In the fall of 2021, DoD authorized temporary increases for troops in 56 areas, but troops had to apply for the increase and show the need.
Austin directed his office to review the current basic allowance for housing levels “to ensure that calculations reflect the unusually dynamic fluctuations in the housing market.”
Some of the other quality of life initiatives that were announced are directed at long-standing issues in which fixes were already in the works.
Chief among them is a new allowance designed to augment basic pay for troops whose locations and household sizes put them under the poverty line.
Mandated by the 2022 National Defense Authorization Act, the Basic Needs Allowance will bring troops up to 130% of the poverty level for their particular situation, starting in January.
For example, an E-3 with a non-working spouse and four children living in San Diego would see their gross monthly pay, including the new allowance, bumped up from $4,700 to more than $5,000.
“We’ve estimated roughly, and it could be as little as $990 for a year, upwards of $30,000 for an E-1 with a very large family (nine or more dependents),” Busch said.
At the commissary, prices will be cut to reflect at least a 25% savings over what troops would pay at off-base supermarkets.
That saving is higher than the congressionally mandated 23.7% savings set when Congress allowed DoD to start adjusting commissary prices to reduce the number of taxpayer dollars required to operate commissaries.
Officials didn’t provide any comment about whether they will allow commissaries to go back to selling groceries at the price that represents the simple cost from the supplier.
To ease the burden of permanent-change-of-station moves, the services will permanently cover lodging expenses for 14 days during moves within the contiguous U.S., with up to 60 days for moves into markets with housing shortages, starting in October.
And for junior enlisted service members, E-1 to E-6, dislocation allowance to cover personal moving expenses will be automatically paid out a month prior to move dates, starting in October.
On the child care front, Austin wrote that the department will “make significant investments in Child Development Program (CDP) facilities and infrastructure to further expand our capacity to provide quality child care,” but did not offer more details.
Lack of child care has been an issue for military families for decades. Lawmakers have repeatedly grilled service leaders about their inadequate requests for child development centers. Information was not available to define the dollar amounts or number of child care centers that define the “significant investment” Austin is directing.
Child care staff will get a 50% discount on services if they choose to bring their own child, though just one, to on-base facilities “to help attract more talented staff and to increase capacity,” according to the memo, also taking effect in October.
There are also plans to improve access to the Military Child Care in Your Neighborhood and expand a pilot program that helps cover the cost of in-home child care.
There are several initiatives aimed at helping spouses find jobs:
- Speed up the creation of seven more occupational licensure interstate compacts that allow spouses licensed to professionally practice in one state to skip relicensing requirements when they move to another.
- Hire more spouses directly, on a non-competitive basis, for Defense Department jobs.
- Begin a pilot program to match spouses with paid private-sector fellowships, which begins in 2023.
- Add 10% more companies to the Military Spouse Employment Partnership program by January.
Five of the seven licensure agreements have been in development for nearly two years: teaching; social work; cosmetology; massage therapy, and dentistry/dental hygiene. Two more added since early 2021 are school psychologists and dietician nutritionists.
“Over the past year, we have focused on ways to take even better care of our Service members and their families,” Austin wrote in the memo. “I am proud of the progress that we have made, and we will keep driving hard to do even more. I understand the extraordinary pressures that our military families face — and we are determined to do right by them, every step of the way.”
Asked whether there are more items on a wish list, including overall pay raises or other initiatives that would need congressional funding, Cisneros demurred.
“There’s a number of issues that I think the secretary is considering,” he said. “… And, again, this is something that the secretary takes very personal and, you know, he is continuously considering ideas and how we can better make changes, and he will continue to do that. And again, this is not the end, and we will continue to see what we can do to improve family life for service members and their families.”
Here’s what that reduction in Basic Allowance for Housing is costing troops
Most troops paid at least $1,000 a year out of pocket in 2020 because of reductions in the Basic Allowance for Housing, according to an analysis by government auditors.
“The fact that DoD has been reducing the Basic Allowance for Housing has not gotten a whole lot of attention, so it may be a surprise to some service members and their families,” Elizabeth Field, director of the Government Accountability Office’s Defense Capabilities and Management team, told Military Times. “For military families living off base in housing they find in the local economy, the reduction means that they’ve had to share more of the cost of housing than they have in the past.”
To GAO’s knowledge, this is the first time an analysis has been conducted of the actual BAH reductions and what they mean to service members, Field said. Their chart shows how much extra a service member would get each month and over a year’s time, if the 5 percent reduction weren’t required. For example, E1s to E4s with dependents missed out on $84 a month in 2020, according to the Jan. 26 GAO report.
Starting in 2015, DoD reduced the BAH rates gradually by 5 percent, so that service members are required to pay a share of their housing costs out of pocket. Instead of the previous goal that BAH would cover 100 percent of housing costs, the rate was reduced to 95 percent.
“For those who would never intend to live on base, the 5 percent out of pocket cost means some choose to live at the 95 percent standard, which can be significant in some locations,” according to Dan Merry, vice president of government relations for the Military Officers Association of America. It can be especially difficult for junior troops in some areas.
The BAH reductions were fully phased in by fiscal year 2019. The auditors note that defense officials asked for the change in law so they could divert some of the money paid in BAH into the force for training and readiness. DoD spent about $20 billion in fiscal 2019 on BAH, one of the largest parts of military pay, according to auditors.
BAH rates are calculated each year for each of the 301 separate military housing areas — based on pay grade, and whether the service member has dependents. While on the average an as a whole BAH rates have increased since 2014, individual rates can increase or decrease for a given pay grade, dependency status, and geographic location. A service member may choose to rent or buy a dwelling in the civilian community that costs less than the monthly BAH, and can pocket the extra money. If they choose to rent or buy a dwelling that costs more than BAH, that extra comes out of pocket, too. For those living in privatized housing, the rent is set at the BAH rate.
The 5 percent reduction is calculated after DoD determines the BAH rates for the individual locations. They calculate a weighted national average of those local rates, and use the weighted national average rates to determine the dollar amount of reduction for each BAH rate to equal a 5 percent reduction.
The BAH rates are reduced by a set dollar amount, regardless of where the service member is stationed. DoD contends calculating the reductions in this way is more equitable, the GAO auditors stated, because it ensures the amount coming out of pocket for the service member is the same across any given pay grade and dependency status, regardless of where in the U.S. a service member is stationed.
That does mean that the percentage of the actual reduction varies by location. Service members in more expensive areas where the BAH was greater than the national average see a lower percentage of decrease in their BAH than those living in lower-cost areas. Using GAO’s examples, the $102 per month reduction equals a 2-percent BAH reduction for the E6 with dependents in San Francisco; and about a 10-percent BAH reduction for an E6 with dependents living in Johnstown, Pa.
Examples of how much the BAH reduction cost troops in 2020:
|With Dependents||Without dependents|
|E1-E4||$84 per month/$1,008 per year||$69 per month/$828 per year|
|E6||$102 per month/$1,224 per year||$87 per month/$1,044 per year|
|E7||$104 per month/$1,248 per year||$89 per month/$1,068 per year|
|O2||$96 per month/$1,152 per year||$87 per month/$1,044 per year|
|O4||$127 per month/$1,524 per year||$112 per month/$1,344 per year|
|O6||$143 per month/$1,716 per year||$127 per month/$1,524 per year|
|O7-O10:||$148 per month/$1,776 per year||$132 per year/$1,584 per year|
|Source:||GAO analysis of DoD data|
Privatized housing landlords get compensation for BAH reductions
Meanwhile, concerns were raised about how these reductions in BAH would affect the financial viability of privatized housing projects, which rely on service members’ rent as their primary source of income.
In fiscal years 2018, 2019, and 2020, Congress required the military to make payments to the privatized housing projects to offset the BAH reductions.
“The fact that subsidy payments are paid to [privatized housing projects’ to offset the BAH reduction …. I don’t think that’s well-known” among troops and families, said Sarah Kline, an Army wife and housing advocate for the Military Housing Advocacy Network. “It doesn’t feel fair to the service members living off base in the civilian community, forced to deal with the reduced [BAH] rates.”
About two-thirds of families live off base, either by choice, or because on-base housing isn’t available. “Military families who do not have a choice to live on installation may find the BAH reduction and investment in [the privatized housing projects to offset BAH reductions] unfair,” MOAA’s Merry said. “Long waiting lists on installations where housing demand exceeds supply often results in expensive out-of-pocket options off base.”
In their Jan. 26 report, auditors found problems with the congressionally-mandated method for calculating the payments to the projects. Because the payments to the projects are based on the local BAH rate, and the BAH reductions are based on a national weighted average BAH rate, it causes a “distortion” that gives some privatized housing projects more money or less money than Congress intended, auditors stated.
Auditors found that six privatized housing projects received more than $1 million greater than the estimated amount of BAH reductions of the service members in their communities. Yet six other projects received more than $1 million less than the estimated amount of BAH reductions. GAO hasn’t released information on the specific projects.
“For those living on base in privatized housing, the impacts of the reduction have been mixed,” Field said. “As we found, there have been some instances in which DoD did not provide enough funds to privatized housing developments to make up for the reduction in BAH. In these cases, that meant less funding available to help maintain quality housing, a concern that Congress and others have been focused on in recent years.
“We also found instances in which DoD provided more funds than needed.” Auditors recommended that Congress take steps to fix this methodology.
Kline said she is concerned about locations where the military privatized housing landlords were under-compensated for the BAH reduction, and how it affects military families living in those housing areas.
In 2019, DoD’s reduction in BAH for troops specifically living in privatized housing saved DoD about $193 million. That same year, DoD made congressionally mandated payments to private housing landlords of $198 million to offset the losses.
Overall, the Army’s and Air Force’s payments to privatized housing projects on their installations were $3.4 million and $3.5 million less, respectively, than the total BAH reduction, indicating underpayments to some projects. The Navy’s and Marine Corps’ overall payments to projects were greater than the BAH reduction, by $9 million and $2.7 million.
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