Following sequestration-driven budget cuts, the Department of Defense (DoD) is required to slash its budget by almost $500 billion over the next decade. On Nov. 7, the Senate Committee on Armed Services held a hearing that focused on the broad impacts of DoD budget cuts, including service member pay and benefits. Of concern to housing providers, reductions to the Basic Allowance for Housing (BAH) are under consideration. NMHC/NAA submitted a statement to be entered into the official hearing record given the potential implications for both privatized military housing providers and market-rate providers operating in military communities.
The NMHC/NAA statement calls critical attention to the role that privatized military housing providers have played in modernizing military housing. Prior to the enactment of the Military Housing Privatization Initiative (MHPI), more than 50 percent of the DoD’s housing units needed to be replaced or repaired. In addition, the statement thoroughly outlines the potential impact of BAH reductions on America’s service members and their families.
Specifically, the BAH reductions could increase out-of-pocket housing expenses for nearly one million of the nation’s troops. NMHC/NAA also point out that for the two-thirds of the military population living off-base in conventional private-sector housing, any BAH reduction, or period of flat BAH rates, will shrink the funds service members have available for housing costs. And finally, the statement emphasizes that a reduction in BAH funding could result in collateral damage to local economies because apartments and their residents are significant economic drivers in their communities.
DoD is urged to exercise caution before using BAH reductions to satisfy budget cuts. A measured approach to the reductions is recommended in the statement, one that engages industry stakeholders and assesses the effects across the real estate sector and local economies.
On Nov. 8, an article on the potential reductions to the BAH program was published in the Wall Street Journal and quoted NMHC Senior Director of Energy and Environmental Policy Paula Cino who emphasized, “The sooner that we really understand what the potential changes can be, the better we can respond and mitigate any damage to the program moving forward.”
