OnWatch is a quarterly news update for Active Duty
April 9, 2021
Is BAH Coverage Enough for Your Area?
2015, Congress authorized a gradual reduction of Basic Allowance for Housing (BAH) rates by one percent over a five-year period, due to the
growing cost of the military personnel program. The total coverage was
eventually reduced to 95 percent in 2019. The reduction required service
members to pay a portion of their housing costs, which affected the
majority of service members because they reside in the civilian housing
The other housing options
available to service members, include government or privatized housing
projects that rely on BAH for their key revenue source. In 2018,
Congress required the Department of Defense (DoD) to invest in these
housing projects to offset the BAH reduction, and as a result, Congress
tasked the Government Accountability Office (GAO) to review DoD's BAH
process. Recent reports by Military Times claim many military families
are paying more than 200 dollars a month out of their pocket for housing
costs above the BAH.
GAO Report Findings (GAO-21-137)
DoD has established a process to determine BAH rates. However, the DoD
has not always collected rental data on the minimum number of rental
units needed to estimate the total housing cost for certain locations
and housing types. The GAO analysis found that 44 percent (788 of 1,806)
of locations and housing types had fewer than the minimum sample-size
target to determine accurate BAH rates.
GAO found that privatized housing projects received payments that were
either over or under the amount of revenue lost from reductions made to
BAH, in some cases by one million dollars or more. These distortions
occurred because the legal requirements for calculating the BAH
reduction and the congressionally mandated payments differ.
Specifically, the law requires the BAH reduction to be a set dollar
amount, regardless of location, while payments to privatized housing
projects are required to differ by location. According to the DoD, the
BAH reduction was the same amount regardless of location. Therein lies
the problem of why some troops are paying more than 200 dollars above
BAH in certain areas each month.
the DoD improved monitoring BAH rates, it does not have a process that
uses quality information to monitor alternative external data sources.
Additionally, the DoD does not effectively mitigate the potential bias
that can occur when selecting rental housing data to include in its data
collection. The GAO recommends the DoD assesses its process for
collecting rental property data to determine methods to increase the
sample size of current representative data; establishing and
implementing a process that allows for consistent monitoring of key
data, consistent use of quality information, and timely remediation of
any identified deficiencies. This would help ensure that BAH rates are
appropriate for service members' rank and that rates also reflect the
current costs of local private housing.
GAO also recommended reviewing and updating BAH guidance to ensure that
information about the BAH rate-setting process, including its sampling
methodology and use of minimum sample-size targets, is accurately and
FRA will continue to
monitor this situation and advocate for the DoD to enact the GAO
recommendations. FRA opposes cuts to BAH payments and wants to restore
BAH to 100 percent of housing costs. The association wants to reform
enlisted housing standards by allowing E-7s and above to reside in
separate homes, track BAH to ensure it is commensurate with actual
housing costs, ensure adequate housing inventory and that housing
privatization programs are beneficial to service members and their
OnWatch is a quarterly news update for active duty and Reserve personnel, written by Theo Lawson. He served 8 years total reserve and active duty in the United States Marine Corps and has a personal interest in these matters. As the assistant director of Legislative Programs for the Fleet Reserve Association (FRA), he’s also committed to FRA’s mission to maintain and improve the quality of life for Navy, Marine Corps and Coast Guard personnel and their families. He looks forward to keeping you up to date on FRA’s legislative efforts to protect and enhance your earned military and veterans’ benefits.