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Military Housing Benefits Can’t Keep Up with Rising Housing Costs

BAH rates

It’s a growing issue; military members and their families stationed in America are struggling to keep up with local rents, and the military’s Basic Allowance for Housing (BAH) isn’t enough in many cases to help.

Fortune Magazine reported in 2022 that the Basic Allowance For Housing, paid according to rank and adjusted each year, isn’t able to keep up with market rent and utility expenses. And in 2022 with rents going higher than they have in some time, this is an issue that could affect morale, retention, and recruiting.

Typically, BAH is not intended to cover the entire amount of housing expenses a servicemember and family must pay; BAH is meant to cover up to 95% of those costs–on paper.

In the United States, some estimate the number of service members who must live off-post or off-base to be approximately two-thirds of active duty troops.

The Associated Press compared five stateside military bases and their housing allowances; the AP found that housing allowances have gone up just under 20% since 2018 but rents have increased nearly 45% in those same housing markets. Where are these markets located?

  • Carlsbad, CA
  • Colorado Springs, CO
  • El Paso, TX
  • Killeen, TX
  • Tacoma, WA

In February 2022, the Associated Press ran an article that included this headline: “Rents reach ‘insane’ levels across US with no end in sight” and in light of these issues it would be easy to ask why these military members don’t simply move on base instead of living “on the economy”.

Why Don’t They All Just Move On Base?

The answer is fairly simple. There isn’t enough on-post housing to accommodate the sheer volume of people who would potentially take full advantage of this in high-cost housing markets like Southern California, the East Coast, and elsewhere. Military housing has traditionally featured waiting lists, and this is a situation that is not likely to change soon.

Add to that, military housing scandals like the Camp Lejeune water contamination issue which the Marine Corps and the Defense Department failed to deal with properly between 1953 and 1987, and what you get is a potential deep distrust of living on-post, at least among certain segments of the population.

Why Can’t The DoD Keep Up With Rising Rent?

Unless there is a special increase in BAH military members and their families have to wait until new BAH rates are calculated for the new year. And even then, there is no guarantee that any increase in the allowance will be sufficient to offset higher market rents. Why do we mention a special increase? In 2021, the DoD temporarily increased BAH for more than 50 housing markets that had “increased housing costs” above the current BAH rates.

This increase was not automatic–troops had to apply and be approved for the higher BAH to offset their rental costs. But the increase in this particular case was allowed to begin in October 2021 and expired at the end of December in the same year.

That is likely little comfort to military families who have to pay elevated rent and utility costs all 12 months out of the year.

The Nature Of BAH Calculations

Why the major gap between military allowances and rising market rent? One reason has to do with the way BAH benefits are calculated each year. Military housing allowances are typically set, according to the Department of Defense, by, “surveying the cost of rental properties in each geographic location.”

That means that when BAH is adjusted on an annual basis, local rent data such as median market rent plus the average cost of utilities are calculated using data collected in the spring and summertime

That’s one reason why the DoD can’t just raise the rates. The data at press time is likely still being collected and the calculations are yet to be run. Until the 2023 rates are available and announced, military members and their families still have to live with the pay gap and there is no guarantee that the gap will be significantly reduced in the coming year. You can learn what the current BAH rate is by using the DoD BAH rate calculator.