Mounting evidence shows the broken process to determine the Basic Allowance for Housing (BAH) increases financial stress for many military families. Passing legislation to strengthen the BAH will empower service members struggling to meet their housing needs and secure the military’s family housing portfolio for future generations.
Unaffordable out-of-pocket expenses + inaccurate BAH calculations
Military families continue to face unaffordable housing expenses across the country. An independent survey conducted by Blue Star Families recently found that more than three quarters (76%) of active-duty military families living off-base paid more than $200 per month in out-of-pocket housing expenses in 2021. The study identifies how some families confronted scarce rental housing availability, fast-rising home prices, and a competitive seller’s market as they struggled to access affordable housing.
Expenses to operate and improve on-base family housing also impacted military housing communities. Last year, Military Housing Privatization Initiative (MHPI) partners saw costs to build, renovate, and maintain military homes rapidly rise, with companies reporting an 8-12% increase in the cost of materials. These price hikes impact the cost of maintenance and community improvement plans, including renovations and construction of new homes.
Coupled with a housing affordability crisis and the rising price of goods, Blue Star Families provides evidence that “BAH did not adequately keep up with the market”. The finding confirms a Government Accountability Office (GAO) report concluding the Department of Defense may have often set BAH rates inaccurately and recommends the Department review and update their processes for determining rates.
BAH solutions: reverse draconian budget cuts & improve rate-setting processes
It’s time to reverse the decade-old sequestration policies that led to indiscriminate BAH budget cuts. The BAH Restoration Act proposes to restore this critical funding. At the same time, policymakers and military family advocates are calling for the DoD to overhaul the BAH rate-setting process to more accurately reflect local rental market rates.
As market demand for rental units and the cost of construction materials continues to rise, Congress should act now to pass these legislative solutions critical to strengthening the purchasing power of military families and the ability of MHPI providers to budget, plan, and execute improvements to privatized military housing communities.