BAH hikes average 6.9 percent - Military Pay & Allowances - Military Times

BAH hikes average 6.9 percent

Service members will receive a slightly smaller average housing allowance in 2009 than in the year that is just about to run out.

The Pentagon will spend $17.4 billion on the Basic Allowance for Housing next year, about $100 million less than in 2008.

The average 6.9 percent increase is 0.4 percentage points less than the 2008 nationwide average. The number of locations where rates increase actually expands in 2009, but the increases generally were not as large as in the last update almost a year ago, said Susan Brumbaugh, director of the Pentagon’s BAH program.

The new rates, which take effect Jan. 1, were announced Dec. 15.

See the 2009 charts

BAH is designed to cover average off-base rental housing costs for service members and their families. It is calculated using a complex formula that looks at median current rental rates, average cost of utilities and renter’s insurance rates for various types of housing — apartments, townhomes and single-family homes, with varying numbers of bedrooms — in each of more than 365 housing markets across the nation, including Alaska and Hawaii.

Brumbaugh said officials have not generally seen rental costs rise as the housing sales market has collapsed.

“In larger markets — California or New York City — you have such a large market that the impact of families not buying and deciding to rent ... there are enough units out there available that I’d be surprised if it would be a big impact at all,” she said.

Brumbaugh said she would expect to see increases mostly in rent in smaller towns and cities surrounding many military bases. But her office did not specifically look at such overall trends.

In 2009, the average increase in BAH for troops with dependents will be about $95 a month. The Pentagon says a “typical” junior enlisted member with dependents will receive roughly $68 a month more than in 2008, while a senior noncommissioned officer with dependents will see a BAH increase of about $93.

Monthly rates for an E-5 with dependents will range from $739 a month in Paducah, Ky., to $2,763 a month in San Francisco. The 2009 spread for O-3s ranges from a low of $970 in Pine Bluff, Ark., to a high of $3,278 in San Francisco.

Rates for a single E-5 will range from a low of $589 in Paducah to a 2009 high of $2,618 in New York City; the low BAH rate for a single O-3 is $863 in Paducah, while the high rate, $2,873, also will be paid in New York City.

The biggest overall average BAH rate increase was Denver’s 17.7 percent, followed by 15 percent in Yuma, Ariz., and Louisville, Ky. At the other end of the scale, two Hawaiian counties, Maui and Kauai, had the biggest declines, 6.5 percent and 6.3 percent, respectively.

BAH rates are based on rental data collected throughout the preceding year by base housing offices in every military housing area — some areas have two or three such offices reporting — and by a private contractor, Runzheimer International, which analyzes the data.

Brumbaugh said she aims to get about 60 percent of her data from base housing offices, 40 percent from Runzheimer. She said any data that officials are not completely comfortable with is tossed out.

“We will always bend over backwards to make sure that the military member is getting the benefit of the doubt,” she said.

Brumbaugh said an important feature of the BAH program is “individual rate protection.” As long as troops aren’t demoted or don’t change dependency status, everyone already assigned to a given area where rates decline Jan. 1 will see no cut in BAH; their rates remain unchanged for as long as they are assigned in that location. Only those being reassigned to these areas after Jan. 1 will get lower payments.

Brumbaugh said this does not mean anyone “loses” on BAH; if rates drop in a given area, it’s because survey data shows that average rental costs are declining — so the lower rate should still buy adequate housing.

“We’re confident that we’ve got the right rate,” Brumbaugh said. “So even if they move to the area on 2 January, we’re confident that they can find something in their area that is within their BAH.”

In areas where rates increase Jan. 1, everyone assigned to those areas gets the bigger payments.

Brumbaugh said she hears complaints every year about BAH rates being too low in a given area. “That’s a normal reaction,” she said.

A small controversy has brewed in recent years about the housing standards upon which BAH rates are based. The Pentagon assigns a certain standard of housing to each paygrade, based on where most members in that paygrade are thought likely to be in terms of age, family status and income. Lower paygrades are assigned apartments, for example, while the most senior ranks rate single-family homes.

The standards haven’t changed in more than a decade, and some say they are outdated. In the enlisted ranks, for example, the only paygrade whose BAH rates are based on surveys of rental costs of single-family home is the highest enlisted paygrade — E-9.

An effort was made in Congress this year to also make single-family homes the housing standard for E-8s with families, which would have raised BAH rates by about $180 per month for 29,000 E-8s with families. But that provision did not make it into the final defense bill for fiscal 2009.

Brumbaugh said complaints about BAH rates can be addressed to each service’s BAH representative, who in turn contacts her office, which will re-analyze the data for an area.

Commands also can request site visits, she said.

But, she noted, “We’ve never had to go back and readjust rates because the data was incorrect.”

The only exception in the past three years was a readjustment at Fort Knox, Ky., because data on mobile homes had been incorrectly counted, she said.

The services recently were authorized to pay for local household goods moves by troops forced out of rented homes as a result of foreclosure on their landlords. Contact local installation housing offices or Military OneSource at (800) 342-9647, or online.