I was at a really great military spouse event on Wednesday (thanks, USO!) and someone mentioned that BAH doesn’t always cover the cost of housing. It’s true that a lot of military families spend more than their BAH on housing. I hear things like this all the time, something along the lines of “I don’t know who makes up these numbers” or “BAH isn’t enough” or “they keep cutting BAH even while housing costs have gone up.” And it’s absolutely true that in many markets, BAH isn’t going to cover the housing that folks want to live in. But as I listened to this discussion, I realized that the problem isn’t that the numbers are made up (they’re not,) or that BAH isn’t “enough” (it does exactly what it is supposed to do), or that BAH drops while housing costs increase (yes, there has been a tiny cut to BAH overall, but not enough to create this widespread problem.) The problem is that the BAH housing allowance are based on an outdated concept of the size and type of housing a military family is “supposed” to occupy.
How BAH is Calculated
As a preface to this, you have to really understand how BAH works. It’s anything but random. A private company is contracted to gather housing and utility costs from around 300 Military Housing Areas. They collect data in the summer and use housing listings, talk to management companies, consult with real estate professionals, and work with the local housing office(s). They identify neighborhoods where the average income is similar to the total military compensation of a service member who would be eligible for that unit, and they pick houses that are geographically representative of the market as a whole. They work with local area installations to ensure that they’ve eliminated unsafe areas. They don’t use data for anything that isn’t a true apartment or house – no mobile homes, no age-restricted neighborhoods, seasonal units, furnished units, income-restricted housing, or efficiencies.
The utilities portion of the equation is determined using data provided by the annual American Community Survey conducted by the Bureau of the Census.
This data is then applied to the formula to determined the actual housing costs for each paygrade and dependency status (with or without dependents.) Based upon the changes to the law, the service member then sees 96% (2018) of that calculated amount, dropping to 95% in 2019.
The Housing Standards
Here’s where I think the actual problem lies. From the BAH Primer, “The Services have agreed to housing standards that allow members to receive a BAH that correlates to what civilians who earn comparable amounts would pay for housing. That is, we use housing standards to link housing costs with a particular paygrade.” This makes total sense, right? You have to base housing costs on something, and so there is a list of how much your BAH should be able to pay for, based upon rank and dependency status. The problem is that this standard figures BAH based on smaller properties than the average service member expects to be able to afford.
Here’s the list for service members with dependents, but first let me explain it a little. The second column is the size house that the military thinks that rank should be living in, sort of. The third column is how the exact cost is calculated. If your rank doesn’t rate one of the “anchor point” size houses, they take the lower housing type/size and the next housing type/size and figure out the difference. They they adjust the allowance to be the percentage between the two type/sizes. Does that make sense?
With Dependents Housing Standards
|Grade||Housing Type||BAH Interpolation|
|E-1||2br||Midpoint of 2br APT and 2br TH|
|E-2||2br||Midpoint of 2br APT and 2br TH|
|E-3||2br||Midpoint of 2br APT and 2br TH|
|E-4||2br||Midpoint of 2br APT and 2br TH|
Do you notice anything interesting about this list? Look at the housing standard listed for your service member’s rank. Do you actually live in a home that fits in the military’s housing standard? We don’t. In over 20 years, we’ve only lived in housing “at our standard” one time, and that was only because we were moving back from overseas and it was easier to move into a house that we already owned even though it was way smaller than we were used to and it was pretty small for our family at the time. (My dear friend has helped me remember that even though we’ve always lived above the standard, we’ve also always stayed below BAH, even though we choose areas with good schools and we generally live in pretty nice houses. So what’s that all about?)
Maybe the problem isn’t the BAH process or formula, maybe the problem is the housing standards.
As far as I know, the current BAH housing standards were set when the current BAH formula was put into place in the 1990s. I think they were probably outdated then, and are even ore outdated now. Today’s military families generally expect to live in larger houses than their grandparents did.
As the military looks to retain a qualified, all-volunteer force for the next 10, 20, or 40 years, they need to address the issues that are upsetting military families, and housing allowances are a constant subject of frustration.
What do you think? Do the current housing standards meet your expectation of appropriate housing for your service member’s rank? Have you lived in housing that aligns with these standards?
Do you want to know more about your military pay and benefits?
Things change fast around here! Keep up-to-date with email alerts about the topics that are important to you!