OnWatch is a quarterly news update for Active Duty

April 9, 2021

Is BAH Coverage Enough for Your Area? 

In 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 market.  

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) 

The 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. 

 The 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. 

Although 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.  

The 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 fully reflected. 

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 families.

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