BAH cuts may hit troops in privatized housing

2015-02-13T10:15:39-05:00

From: Army Times

Troops living in privatized military housing might be paying extra as the result of increases in out-of-pocket housing expenses.

Under a policy expected to be signed soon, privatized housing tenants would be subject to those increases just like their counterparts living on the local economy.

Until now, rents in privatized housing — owned and operated by private companies — generally have been capped at the amount of Basic Allowance for Housing, designed to cover average costs of rent and utilities. Under the policy expected to be approved, troops could be writing checks to their privatization company for the difference between their BAH and the market rent.

In part, the change is designed to provide more equitable treatment of troops who live in privatized housing and those who live on the local economy. BAH doesn't always cover rent on the local economy, where landlords charge what the market will bear. About 70 percent of troops live in off-base civilian housing.

Another concern is the future viability of the housing privatization program, which relies on BAH as the only revenue stream for the operation, maintenance, future repairs and replacements of troops' privatized housing. Troops would be required to pay more out of pocket to make up the difference and ensure the continued viability of these projects.

As part of this year's defense budget, Congress approved a Pentagon request to reduce BAH rats by 1 percent. In the short-term, the impact to service members is expected to be minimal because BAH rent protection applies as long as service members remain in their current housing at their current assignments, their BAH will not go down.

Privatization companies may not have to charge the extra rent unless the BAH decreases more than 1 percent or 2 percent.

Marine Corps and Army officials who responded to questions about the effects of the possible decrease in BAH on troops living in privatized housing — and the future viability of those projects — said they expect troops may be required to pay extra out of pocket.

"Accordingly, a 5 percent reduction in BAH would likely result in increased out-of-pocket expenses similar to military families on the local economy," said Marine Corps spokesman Rex Runyon.

DoD has not yet issued a policy or direction to the military services, spokeswoman Maureen Schumann said.

These changes will complicate things for troops as well as privatized companies, said Joyce Raezer, executive director of the National Military Family Association. "Which begs the question. What's wrong with setting BAH at 100 percent of the costs of rent and utilities? Why are we nickle-and-diming our service members?

"The BAH rates have put our people in better housing, partly because of privatized housing. But it also encourages people in the civilian community to provide better housing."

The scaling back of the BAH "is a concern for the housing privatization program," said Ivan Bolden, chief of the Army Privatization and Partnerships Office of the Assistant Chief of Staff for Installation Management.

"While previously rents were capped at BAH, the private partners are being given the authority to charge more than BAH. Soldiers could be required to pay the difference between their BAH and a market rate rent, or at a minimum, the out-of-pocket expense budgeted."

For now, Bolden said, all the Army's privatization partner companies are working to absorb the already-imposed 1 percent reduction in BAH by looking at more efficient ways of operating.

In addition to that 1 percent reduction, the BAH no longer covers renters insurance. New residents will have to purchase their own renters insurance, generally around $15 to $30 a month. Current residents will continue to receive renters insurance from their privatization company until their initial lease term is renewed.

Marine Corps spokesman Rex Runyon said the 1 percent decrease in BAH will have "minimal impact to the overall health of [housing privatization], which is based on a 50-year income stream, not a one-time decrease in revenue."

As for the further possible decreases in BAH, he said, "the Marine Corps would continue to work with [defense officials] and our PPV partners to monitor the impact of future BAH reductions. We will issue necessary guidance to ensure that there is sufficient cash flow to sustain/recapitalize housing over the long term."

Under the military family housing privatization initiative, most family housing on installations in the U.S. has been transferred to private companies.Troops receive their BAH, then pay rent to the privatization partner, generally through allotment.

http://www.armytimes.com/story/military/benefits/on-base/2015/02/12/basic-allowance-housing-cuts-troops-privatized-housing-bah-cuts/23309905/

Response by LTC Private RallyPoint Member made Feb 13 at 2015 10:29 AM

2015-02-13T10:29:12-05:00

Yet another reason I try to find a place off post that is under my BAH so much that it also covers my cable, internet, eletric, water, etc.

Response by SPC Neil Hood made Feb 13 at 2015 10:37 AM

2015-02-13T10:37:36-05:00

I can think of a few people who were never entitled to BAH just taking it in as roommates. Too bad there isn't much we can do about folks like that.

Response by SGM Erik Marquez made Feb 13 at 2015 10:56 AM

2015-02-13T10:56:41-05:00

I would be fine with this initiative if it applied ONLY when the post in question was able to provide adequate on post housing at no cost to the SM AND the SM turned down that offer of housing. If the SM chooses to live off post be it in "rent controlled" privatized housing or not. Then paying the fair market cost is reasonable. If the post is only able to offer off post housing to a SM due to shortages on post, then the services should be picking up the tab in total.

Response by SFC William Swartz Jr made Feb 13 at 2015 11:08 AM

2015-02-13T11:08:12-05:00

I find it abhorrent and disheartening that individuals residing in privatized on-post housing would have to pay any rent out of pocket for the right to live in that housing. At no time during my 26 years when I did reside on-post did I ever pay anything out of my own pocket, I knew that I would not have any "extra" in pocket compared to my off-post brothers and sisters, but I didn't have to "lose" anything by doing so either. When I conducted my last PCS move to Ft. Benning in 2011, I chose to live on-post to avoid most of the traffic in the mornings and evenings as well as to lessen the chance of having to pay out of pocket for my utilities, which I never did due to my family's normal utilization of our utilities, hell I even got a rebate check a couple of times as we were below the threshold set for my quarters usage. I know that now that I am retired this doesn't affect me in anyway, but it does bother me that any Soldier; Officer, NCO or Enlisted would have to come out of pocket to pay for housing on-post.

Response by LTC Herman Valentine made Feb 13 at 2015 12:17 PM

2015-02-13T12:17:45-05:00

Nice! More nickle and diming our Soldiers and their families at the expense of civilian welfare recipients and/or other social entitlement programs which are sucking funds out of the DoD budget!

Response by SSG Private RallyPoint Member made Feb 13 at 2015 1:53 PM

2015-02-13T13:53:17-05:00

This is ABSURD! We have Soldiers with Families and a stay at home spouse who may not be able to work because they would lose money or her check would be absorbed by child care.

I am not a fan of the privatized housing personally. This is because they are quick to try and place in a sub rank house for that individual and still take the full BAH. What are they doing with that extra cash?

We tried to get on-post housing at our current location and were constantly lied to about houses that we saw were clearly empty for weeks yet told that the house was occupied.

I am fortunate enough to be in a position to afford off post. I know there are many Soldiers who do not have that luxury.

As a matter of fact I just had to fight with housing for a Single Pregnant Soldier of mine where she was forced to leave the barracks and then housing wanted to charge her the difference in BAH even thought eh ARMY would only pay for single BAH until the child is born. I wonder how many instances like this there are where that "Company" is taking extra money from the Soldier.

I guess there has always been corruption with housing though. When I was at Fort Polk before privatization I remember that there was no way to clear housing without "Paying" for a cleaning team. No matter how clean it was they refused to clear a person until the dowry was paid to their "Cleaning Team."

Instead of going after Soldiers maybe we should focus the attention on where every dollar goes with the housing.

Response by SSG Private RallyPoint Member made Feb 13 at 2015 5:47 PM

2015-02-13T17:47:08-05:00

This BAH cut is appalling. I budget to make sure my wife and I save money for the future, I elected on post housing because (at JBLM), it made more cents (hehe) to live on post. Compared to my last Duty Station Fort Riley, my BAH was only $90 less. My 2 bedroom apartment was $800 bucks a month, $1100 after utilities. But at Lewis, the same apartment (rooms and sq. footage) costs over $1300 before utilities. It feels like whoever makes this budget doesn't even pay attention to the local economy around these installations. 11 more years...........its almost over. lol

Response by MAJ Private RallyPoint Member made Feb 14 at 2015 7:42 AM

2015-02-14T07:42:41-05:00

That's interesting. Most of what is now privatized housing was once managed by the military as on post housing. Routine maintenance was accomplished by the service member assigned to quarters, while major maintenance was provided through the DPW. And, it was far more better managed when administered by the military.

I don't know what the terms of transfer were when housing became privatized. I do believe that the terms were very generous to those property management companies who inherited the housing because the housing was already paid for, and the transfers occurred so quickly, that it would appear the properties were "dumped" at cut rate prices.

Response by SFC Private RallyPoint Member made Feb 14 at 2015 8:15 AM

2015-02-14T08:15:31-05:00

I pay $2200 bucks a month i BAH to live on post. A simular home in the area would go for about $1800, I am pretty sure they will still make a profit.

Response by MAJ Private RallyPoint Member made Feb 14 at 2015 12:09 PM

2015-02-14T12:09:43-05:00

If this does happen, I will examine my options in order to save money. It may mean living off-post in the future if I find a better deal "on the local economy." This will hurt the Soldiers and the owners of the privatized housing.

Response by Lt Col Private RallyPoint Member made Jun 1 at 2016 2:10 PM

2016-06-01T14:10:02-04:00

Maybe stop providing base housing entirely? Stop allowing these companies to gouge military members?

Response by 1SG Mike Pearson made May 23 at 2018 8:41 AM

2018-05-23T08:41:52-04:00

smdh