Housing allowance rates will increase by an average of 2.8 percent for service members starting Jan. 1, defense officials announced Thursday.
The Basic Allowance for Housing, or BAH, rates vary depending housing cost data collected each year for more than 300 military housing areas in the U.S. BAH also varies by paygrade and whether the service member has dependents. Service members can find their new BAH rate by visiting the DoD BAH rate calculator.
The 2.8 percent increase is across the spectrum, and doesn’t guarantee that everybody will see that increase — or any increase. But if the BAH rate decreases in a particular area, service members already living there won’t see their BAH decrease, so that those who have made long-term commitments with leases won’t be penalized. For example, the BAH for an E-5 with dependents at Camp Pendleton, Calif., will decrease by $3 a month, to $2,589 in January, according to the BAH calculator. But those Camp Pendleton service members are grandfathered in to the 2019 amount of $2,592.
Officials also announced that Basic Allowance for Subsistence rates will increase by 0.9 percent. Enlisted members will receive $372.71 per month in BAS, up by $3.32; and officers will receive $256.68 per month, an increase of $2.29. As authorized by Congress, basic pay will increase by 3.1 percent across the force. Specific pay rates are expected to be released soon, officials said.
In determining the BAH, officials factor in the median current market rent and average utilities of an area into the total housing cost. These total housing costs are computed for six types of housing based on the type of house and number of bedrooms in each area. BAH rates are calculated for each paygrade, both with and without dependents. Local commanders provide input so that data is collected in neighborhoods with there are adequate apartment complexes and individual housing units, according to officials.
Defense officials estimate that $22 billion in BAH will be paid to about 1 million service members.
Consistent with the authority given by Congress in 2016, the BAH is no longer designed to cover 100 percent of the housing costs in an area. The service member’s out-of-pocket cost share is now calculated to be about 5 percent of actual rent and utilities cost. DoD estimates that the out of pocket rates incorporated into the 2020 BAH rates range from $68 to $148 monthly, and vary by pay grade and whether or not the service member has dependents. Again, these are averages, and service members’ costs vary depending on the type of house they rent. If service members live in privatized housing, their rent is equal to the BAH amount.