Housing allowances paid to about 1 million service members living off base in the United States will rise by an average of 3.8 percent Jan. 1, nearly double the average 2 percent increase of last year.
How Basic Allowance for Housing recipients fare as individuals will vary by pay grade and assignment area. Allowance rates are rising, or at least staying level, across 79 percent of the military’s 365 housing areas, said Cheryl Anne Woehr, housing allowance program manager for the Defense Department.
In the 21 percent of areas where rents have fallen this past year, members already living there will benefit from rate protection. This law allows members who are committed to rental agreements or paying off mortgages to continue to draw housing allowances at current rates.
So only service members who move after Dec. 31 into areas where rental costs have fallen will feel the affects of lowered rates for 2013.
The allowance for a married career enlisted member in the grade of E-6 will climb an average of $60 a month in January. A typical married officer, rank O-3, will see an average increase of $55 a month, Woehr said. Rates for 2013 are online at: www.defensetravel.dod.mil/site/bahCalc.cfm.
Other pay will increase Jan. 1. Military basic pay will increase 1.7 percent across all ranks and pay grades. Basic Allowance for Subsistence will increase 1.1 percent based on food price changes tracked by a Department Of Agriculture index. The rate for enlisted will be $352.27 a month up from $348.44. The officer rate, which is lower because of a quirky history of adjusting food allowances, will be $242.60 a month, up from $239.96.
Service members living off base overseas get an Overseas Housing Allowance instead of the Basic Allowance for Housing. The overseas rate is based on what members pay in rent. It also is adjusted periodically as the dollar’s value shifts against local foreign currency.
Veterans using the Post-9/11 GI bill get a monthly “living” stipend equal to the housing rate in their area for an E-5 with dependents. The Veterans Administration will use 2013 rates to adjust the stipend in August, start of a new academic year.
Housing rates are adjusted based yearly based on changes in rental costs, utilities and renter’s insurance premiums for various housing types. Those who are married or have children draw the higher “with dependents” rate in all housing areas. Housing payments will total $20 billion in 2012
Areas seeing some of the largest housing increases this year include New York City (14.7 percent), Altus Air Force Base, Okla., (14.1 percent), Sumter/Shaw Air Force Base, S.C., (11.8 percent) and Honolulu County, Hawaii (11.2 percent) and Hanscom Air Force Base, Mass., (10.8 percent).
Areas reporting some of the steepest rental declines include Portsmouth, N.H.,/Kittery, Mass., (-5.6 percent), Twenty-Nine Palms Marine Corps Base, Calif., (-5.1 percent), Fort Stewart, Ga. (-3.4 percent) and Montgomery, Ala (-2.6 percent.)
Since 2008, housing “without dependent” rates have benefitted from an artificial floor. These rates for single members must match at least 75 percent of the local “with dependents” rate at the same pay grade.
By law, stateside housing allowances have to be based on the cost of housing for civilians with comparable incomes in the local area, Woehr explained. Rates are set to cover 100 percent of median rental cost, utilities and rental insurance in each area based on the type of housing officials deem appropriate to a member’s pay grade and dependent status.
Allowance rates are tied to the base or installation where military members are assigned.
“We don’t have a specific mileage determination to set the military housing areas,” said Woehr. “They are drawn generally around county lines with the installation or population hub at the center.”
Local rental cost data are collected from May through July when housing markets are most active. Most data are gathered by military housing offices and exclude rents in high-crime areas or where housing is poorly constructed or near environmental hazards and mobile home parks.
The housing allowance law links one group of members to a specific type of housing: Junior enlisted (E-4 and below) with dependents must be given a housing allowance big enough to cover the median cost of renting a two-bedroom apartment and two-bedroom townhouses. With that as a foundation, officials developed rates by pay grade using rental cost data for six types of housing and different numbers of bedrooms in every housing area.
Write Military Update, P.O. Box 231111, Centreville, VA, or email firstname.lastname@example.org or twitter: Tom Philpott @Military_Update.