Stateside housing allowances slightly increase in January

Active Duty, Articles |

Some active-duty servicemembers living off base saw their housing allowance increase slightly, while others saw no change at all this January 1. As Military.com reported, the Basic Allowance for Housing increased an average of 0.7 percent – the equivalent of $10 per month – at the start of 2018. Individual increases varied depending on a servicemember's location, pay grade and whether or not he or she has dependents. 

That said, the increase only applies to servicemembers stationed in certain military housing areas. Local BAH rates will fall in 128 of the 301 locations. However, no current recipient will see their allowances decrease unless they're demoted, their number of dependents changes or they move to a new location.

"We do not penalize members who have already gone to a location, signed a lease and then rates happen to decrease," said Summer Britford, a chief with the Defense Travel Management Office. "Incoming members do have access to lowered [rental] costs so they do experience those decreases."

That latter statement doesn't exactly align with the expenses experienced by many servicemembers and civilians. As Military.com pointed out, the BAH adjustments haven't matched changing rent and utility costs. That said, the new rate does agree with the Defense Department's decision to reduce housing allowances overall, leaving servicemembers responsible for some expenses once again.

A brief history of housing allowances

Originally, allowances were only designed to cover approximately 80 percent of servicemembers' housing costs, leaving them responsible for the remaining 20. However, according to Military Benefits, the Defense Department began increasing allowance rates in the late 1990s to keep them in line with nationwide rental costs. By 2005, housing allowances covered 100 percent of housing costs for servicemembers.

In 2015, however, the DoD reduced BAH rates to cover 99 percent of these costs. The department also began excluding rental insurance from rate calculations at that time. The next year, the DoD determined that BAH rates would be set at 95 percent, falling at a rate of 1 percent per year over four years. The current rate covers 96 percent of housing costs; it will drop again for a final time next year.

Defense officials wish to use the millions of dollars saved by reduced BAH rates for other needs as defense budgets tighten and the country struggles to eliminate the deficit.

An image of a home with text that reads, "The BAH rate will fall to 95 percent of housing costs by 2019."Stateside housing allowances are falling at a rate of 1 percent per year.

Other housing allowance 'solutions' could hurt servicemembers

While the DoD works internally to find the right housing allowance balance, other organizations have come up with their own ideas. As a separate Military.com article revealed, The Heritage Foundation proposed a reduction of housing allowances in the 2018 budget.

"[The housing allowance] is not military compensation," the report read, according to Military.com. "Housing allowances should be based on the amount of money that service members must pay to obtain adequate housing. Service members are not entitled to, nor should they have any expectation, that money above what they pay for housing can be retained as 'extra compensation.'"

The report implies that servicemembers receive allowances that cover more than the cost of housing in their area; however, BAH rates are designed only to cover a portion of these expenses. While this suggestion wasn't included in the budget, think tanks and government officials will likely continue to adjust BAH rates to the detriment of active servicemembers.