thedrifter
11-07-06, 12:50 PM
November 13, 2006
The BAH bounce
Decrease in allowance shows disconnect between what troops, services consider adequate
By Gordon Lubold and Rick Maze
Staff writers
Ask Sgt. 1st Class Andy Baird what he thinks about his housing allowance rate, and he’ll tell you it just doesn’t fit the bill.
When Baird, 39, and his wife looked for housing in the Fort Knox, Ky., area, they found that their monthly allowance of $842 simply didn’t pay for anything they would want to call home.
Baird, a cavalry scout, doesn’t think the allowance reflects the true cost of housing in that part of Kentucky. He said the civilian housing analysts paid by the Pentagon to determine BAH rates around the nation weren’t looking in the same neighborhoods as he and his wife.
“I don’t know where they looked, but they didn’t look in this area because we couldn’t find anything that fit my BAH, as an E-7 in the Army, that I could put my family in,” he said. “We looked at some houses that I wouldn’t put a dog in, and they wanted a lot of money for them.”
Almost a year after the Pentagon ended a five-year effort to improve the BAH program, concerns linger in some markets that housing rates still don’t measure up.
Indeed, at Knox, there were some particular problems with the rates, which were later fixed. But those adjustments still didn’t help a soldier like Baird.
“We’re a family of four and we have a lot of stuff,” he said.
The Defense Department has come a long way since the BAH improvement effort began in 2000, a time when service members across the country still were expected to pay an average of about 20 percent of housing costs out of their own pockets.
Now, theoretically, the Defense Department covers 100 percent of average rental housing costs — meaning troops should have no out-of-pocket costs as long as they rent the type of housing that defense officials deem fitting for their paygrade.
But while ranks in some locales around the country do fine — even do well — those living off base in other markets still believe they don’t receive enough BAH.
And the 2006 rates, released last December, brought another surprise. Over the five-year BAH improvement campaign, defense officials did not allow rates to drop in any area, even if local rental costs were declining. But this year, for the first time in recent memory, BAH rates can go not only up, but also down.
An unexpected drop
At Marine Corps Air Station Yuma, Ariz., housing manager Mark Smith concedes he did not expect to see rates decrease in his area this year. But they did, by an average of about 2 percent for enlisted members and about 3 percent for officers — and all ranks took some kind of hit.
The local housing market has been in growth mode as the high-priced Phoenix and Southern California markets push out into this and other remote desert cities. An average house now goes for about $250,000, up from about $125,000 just a couple of years ago, and rental rates have also increased accordingly.
Moreover, since BAH at Yuma has risen for the past several years, Marines thought it would keep climbing. The monthly rate for E-1s to E-4s had been about $500 at the beginning of the five-year effort; today, those grades get $849 per month.
“It was a little bit surprising to see the 2006 BAH rates drop even a couple of percentage points, because the local housing market has just taken off in the last few years,” said Smith, who has been at Yuma for 15 years.
First Lt. Roy Forehand was among those who assumed rates would rise when he began looking at housing in October 2005, when his BAH was $1,126 per month.
Expecting a slight increase for inflation when the 2006 rates came out, Forehand was dismayed to find that his new rate was actually $30 less. That made it more difficult to realize his dream of owning a house — and even to find a rental in an area in which a three-bedroom home can easily go for $1,100 per month.
BAH has always taken care of him during his 17-year career in the Marine Corps, and Forehand isn’t complaining. But he doesn’t think the rates do Yuma justice.
“They just missed the mark on Yuma — however they came up with it,” he said.
Forehand’s experience is not uncommon — and officials say it’s largely a matter of expectations.
Virginia Penrod, director of compensation for the Defense Department, said service members like Forehand may want to buy a home, but that’s not what BAH is for.
“We provide you with enough [BAH] to go out and rent nice, clean, affordable housing,” she said. “It may not be enough to buy a $300,000 house, but we know that you will be able to afford decent housing.”
Even when renting, many troops feel their BAH does not go far enough to get them the type of housing that they consider adequate. And that’s the key — a disconnect between what service members consider adequate housing and what defense officials consider adequate for someone of their age and family status.
The type of housing BAH is designed to pay for differs by paygrade. Forehand may want a three-bedroom house, but the Pentagon believes O-2s should be satisfied with a two-bedroom town house or duplex if they’re married and a two-bedroom apartment if they’re not.
If they want more housing than that, they must dip into their own pockets to cover the difference.
Air Force Staff Sgt. Chris Sy didn’t want to squeeze his wife and two children into the two-bedroom town house that his BAH rate was supposed to get him.
When he moved from Florida to Travis Air Force Base, Calif., last year, the 27-year-old vehicle maintenance airman had planned to move into a single-family home that rented for $1,700 per month.
He had checked the BAH rate chart and determined he’d get $1,670 per month at Travis, which meant he could afford the four-bedroom home he had targeted for his growing family.
But like many service members who moved into a new market in 2006, Sy found that rates at Travis went down — in his case, by about $210 per month.
The Sys mulled their options and decided they wanted more than the two-bedroom town house that the Pentagon says they should be happy with. The E-5 took the four-bedroom house and now pays about $250 per month out of pocket just for rent.
“We’re just not going to movies or restaurants,” he said.
The new, lower rate for E-5s arriving at Travis in 2006 is still appropriate for the market — as long as they are aiming for the type of housing that their BAH is meant to cover, said Mark Dupre, the housing director at Travis.
For the most part, Dupre said, those paying out-of-pocket costs are doing so only because, like Sy, they’re trying to stretch too far.
“An E-4 with kids is thinking condominium or house, when really what he’s being paid ... is intended to get an apartment,” Dupre said. “If people are taking [out-of-pocket costs], in my opinion, it’s because they are not conserving on utilities or they’re getting into [housing] above their means.”
Well, yes and no. In some markets, troops insist their BAH just doesn’t reflect reality — even for the type of housing assigned to their paygrade.
At Fort Knox, they were right.
Col. Mark Needham, garrison commander at Fort Knox, didn’t like what he saw when the 2006 rates came out late last year — an overall drop of 2 percent, with rates for some ranks declining by more than $100 per month.
“We looked at it and said, ‘How could this happen?’” he recalled.
Each year, military housing managers in 370 markets across the country analyze the rental market in their areas, feed data into a Web-based system and let Runzheimer International, a Pentagon contractor specializing in work-force management issues, crunch the numbers to come up with median rental costs in each market for each type of housing.
But the way Runzheimer goes about checking rental rates in any particular area can lead to confusion, because the company picks some houses to include in its survey but leaves others out.
Therein lies the rub — at least sometimes.
When Needham and his staff felt that the rates around Knox were too low, they reviewed the data and found that Runzheimer had included rental units in its surveys that were unsatisfactory, which helped depress BAH rates.
“They were inadequate homes,” Needham said. “We would never have put people in those homes.”
He and his staff made dozens of calls and finally succeeded in getting representatives from the Army housing office, the Office of the Secretary of Defense, and Runzheimer to tour the Knox housing market.
Officials acknowledged that many of the homes upon which the 2006 housing rates in the area had been based were no good. Needham got the rates fixed — and many soldiers got a little money back.
“You can work within the system and get it fixed, but I’ll tell you, there are challenges to get it done,” Needham said.
Ditto at Naval Air Station Jacksonville, Fla., where the base commander couldn’t understand why BAH rates dropped for every officer this year by anywhere from $6 to $202 a month. For enlisted members, rates rose for every paygrade except E-9, which saw an insignificant drop of $1 per month.
“I cannot point to anything locally that explains that,” said Navy Capt. Chip Dobson. “The cuts don’t make sense, given my personal knowledge of the local real estate market. If anything, our rates are too low.”
Local rental costs in neighborhoods deemed acceptable for O-4s through O-6s with two or three children are about $1,800 a month, and utilities can add $250 to $300 more. However, the highest BAH rate in Jacksonville this year is $1,601 a month for O-7s and up — $202 less than the rate for those paygrades in 2005.
Dobson said his own research found that a good three- or four-bedroom house in a decent neighborhood rents for $1,395 a month and up, which guarantees officers would pay out of pocket for housing, something that was supposed to stop.
“The rates seem to be short, in the $500 to $600 range,” he said, suggesting that $2,100 would be the proper amount for a married officer to receive.
Seeking a second opinion
Sheila Higgenbotham, the Navy’s housing director for the South Coast, which includes parts of Florida and Georgia, said the rate reductions appear to be taken in stride by officers because many buy, rather than rent, and sufficient on-base housing exists for officers who don’t want to buy.
Still, she said, questions about the BAH rates at Jacksonville for both officers and enlisted members prompted the Navy to ask for a full Pentagon review of the region.
The review would look at current rates and at whether the single rate that now covers NAS Jacksonville, the nearby Naval Station Mayport and Naval Submarine Base Kings Bay, Ga., should be divided into smaller parts.
One sailor who sees something wrong with the Jacksonville rates is Aviation Electrician’s Mate Jonathan Bennett, a 20-year-old student in flight engineer school.
His monthly BAH of $959 just about covers the rent and utilities on a two-bedroom apartment, but he said it’s in an area that leaves much to be desired.
His wife “absolutely hates it,” Bennett said. “We are in a really crappy neighborhood.”
He said his car was broken into twice in two weeks, and even the hiring of an armed guard at the apartment complex doesn’t seem to have made it safer.
He picked the apartment mostly because it was near the base.
“We wanted to stay close,” he said. “We saw a lot of nicer ones further away, but we decided at the time this was the best for us because I was going to be in school and all.”
Although it’s unclear if any changes the Pentagon may or may not make would alter the Bennetts’ situation, defense officials acknowledge mistakes can be made in the way BAH rates are determined. But they say the system is built to quickly respond to such errors.
For example, officials realized that the tabulation of BAH rates in at least one market had been based on housing that would be considered inadequate in most parts of the country. A “double-wide” trailer should not count as a single-family three-bedroom home, but in that market, it had been — and was used in the surveys that set BAH rates there.
“Once we identified that, inadvertently, some of those had gotten into the data pool, we were able to adjust the rate midyear,” said Steve Westbrook, director of the Defense Department’s Per Diem, Travel and Transportation Allowance Committee.
But those kinds of glitches are easier to address than the issue of whether the housing standards assigned to various paygrades still make sense.
Defense officials said the standards are probably due for a review, but there’s been no word on when, or even whether, such a review might take place.
So some service members are still faced with the same trade-off as before — settle for less housing than they are comfortable with, or pay part of the costs themselves.
Aviation Warfare Systems Operator Airman Marlon Jordan, a student at Jacksonville, pays $804 a month for a one-bedroom apartment in a nice neighborhood. But when utilities are added, he’s dipping into his pocket to pay the bill.
For Jordan, that trade-off is worth it. He said he and his wife Kesha “have lived in rough neighborhoods” before.
“When we got here, my wife said, ‘We don’t want to do that anymore.’”
Ellie
The BAH bounce
Decrease in allowance shows disconnect between what troops, services consider adequate
By Gordon Lubold and Rick Maze
Staff writers
Ask Sgt. 1st Class Andy Baird what he thinks about his housing allowance rate, and he’ll tell you it just doesn’t fit the bill.
When Baird, 39, and his wife looked for housing in the Fort Knox, Ky., area, they found that their monthly allowance of $842 simply didn’t pay for anything they would want to call home.
Baird, a cavalry scout, doesn’t think the allowance reflects the true cost of housing in that part of Kentucky. He said the civilian housing analysts paid by the Pentagon to determine BAH rates around the nation weren’t looking in the same neighborhoods as he and his wife.
“I don’t know where they looked, but they didn’t look in this area because we couldn’t find anything that fit my BAH, as an E-7 in the Army, that I could put my family in,” he said. “We looked at some houses that I wouldn’t put a dog in, and they wanted a lot of money for them.”
Almost a year after the Pentagon ended a five-year effort to improve the BAH program, concerns linger in some markets that housing rates still don’t measure up.
Indeed, at Knox, there were some particular problems with the rates, which were later fixed. But those adjustments still didn’t help a soldier like Baird.
“We’re a family of four and we have a lot of stuff,” he said.
The Defense Department has come a long way since the BAH improvement effort began in 2000, a time when service members across the country still were expected to pay an average of about 20 percent of housing costs out of their own pockets.
Now, theoretically, the Defense Department covers 100 percent of average rental housing costs — meaning troops should have no out-of-pocket costs as long as they rent the type of housing that defense officials deem fitting for their paygrade.
But while ranks in some locales around the country do fine — even do well — those living off base in other markets still believe they don’t receive enough BAH.
And the 2006 rates, released last December, brought another surprise. Over the five-year BAH improvement campaign, defense officials did not allow rates to drop in any area, even if local rental costs were declining. But this year, for the first time in recent memory, BAH rates can go not only up, but also down.
An unexpected drop
At Marine Corps Air Station Yuma, Ariz., housing manager Mark Smith concedes he did not expect to see rates decrease in his area this year. But they did, by an average of about 2 percent for enlisted members and about 3 percent for officers — and all ranks took some kind of hit.
The local housing market has been in growth mode as the high-priced Phoenix and Southern California markets push out into this and other remote desert cities. An average house now goes for about $250,000, up from about $125,000 just a couple of years ago, and rental rates have also increased accordingly.
Moreover, since BAH at Yuma has risen for the past several years, Marines thought it would keep climbing. The monthly rate for E-1s to E-4s had been about $500 at the beginning of the five-year effort; today, those grades get $849 per month.
“It was a little bit surprising to see the 2006 BAH rates drop even a couple of percentage points, because the local housing market has just taken off in the last few years,” said Smith, who has been at Yuma for 15 years.
First Lt. Roy Forehand was among those who assumed rates would rise when he began looking at housing in October 2005, when his BAH was $1,126 per month.
Expecting a slight increase for inflation when the 2006 rates came out, Forehand was dismayed to find that his new rate was actually $30 less. That made it more difficult to realize his dream of owning a house — and even to find a rental in an area in which a three-bedroom home can easily go for $1,100 per month.
BAH has always taken care of him during his 17-year career in the Marine Corps, and Forehand isn’t complaining. But he doesn’t think the rates do Yuma justice.
“They just missed the mark on Yuma — however they came up with it,” he said.
Forehand’s experience is not uncommon — and officials say it’s largely a matter of expectations.
Virginia Penrod, director of compensation for the Defense Department, said service members like Forehand may want to buy a home, but that’s not what BAH is for.
“We provide you with enough [BAH] to go out and rent nice, clean, affordable housing,” she said. “It may not be enough to buy a $300,000 house, but we know that you will be able to afford decent housing.”
Even when renting, many troops feel their BAH does not go far enough to get them the type of housing that they consider adequate. And that’s the key — a disconnect between what service members consider adequate housing and what defense officials consider adequate for someone of their age and family status.
The type of housing BAH is designed to pay for differs by paygrade. Forehand may want a three-bedroom house, but the Pentagon believes O-2s should be satisfied with a two-bedroom town house or duplex if they’re married and a two-bedroom apartment if they’re not.
If they want more housing than that, they must dip into their own pockets to cover the difference.
Air Force Staff Sgt. Chris Sy didn’t want to squeeze his wife and two children into the two-bedroom town house that his BAH rate was supposed to get him.
When he moved from Florida to Travis Air Force Base, Calif., last year, the 27-year-old vehicle maintenance airman had planned to move into a single-family home that rented for $1,700 per month.
He had checked the BAH rate chart and determined he’d get $1,670 per month at Travis, which meant he could afford the four-bedroom home he had targeted for his growing family.
But like many service members who moved into a new market in 2006, Sy found that rates at Travis went down — in his case, by about $210 per month.
The Sys mulled their options and decided they wanted more than the two-bedroom town house that the Pentagon says they should be happy with. The E-5 took the four-bedroom house and now pays about $250 per month out of pocket just for rent.
“We’re just not going to movies or restaurants,” he said.
The new, lower rate for E-5s arriving at Travis in 2006 is still appropriate for the market — as long as they are aiming for the type of housing that their BAH is meant to cover, said Mark Dupre, the housing director at Travis.
For the most part, Dupre said, those paying out-of-pocket costs are doing so only because, like Sy, they’re trying to stretch too far.
“An E-4 with kids is thinking condominium or house, when really what he’s being paid ... is intended to get an apartment,” Dupre said. “If people are taking [out-of-pocket costs], in my opinion, it’s because they are not conserving on utilities or they’re getting into [housing] above their means.”
Well, yes and no. In some markets, troops insist their BAH just doesn’t reflect reality — even for the type of housing assigned to their paygrade.
At Fort Knox, they were right.
Col. Mark Needham, garrison commander at Fort Knox, didn’t like what he saw when the 2006 rates came out late last year — an overall drop of 2 percent, with rates for some ranks declining by more than $100 per month.
“We looked at it and said, ‘How could this happen?’” he recalled.
Each year, military housing managers in 370 markets across the country analyze the rental market in their areas, feed data into a Web-based system and let Runzheimer International, a Pentagon contractor specializing in work-force management issues, crunch the numbers to come up with median rental costs in each market for each type of housing.
But the way Runzheimer goes about checking rental rates in any particular area can lead to confusion, because the company picks some houses to include in its survey but leaves others out.
Therein lies the rub — at least sometimes.
When Needham and his staff felt that the rates around Knox were too low, they reviewed the data and found that Runzheimer had included rental units in its surveys that were unsatisfactory, which helped depress BAH rates.
“They were inadequate homes,” Needham said. “We would never have put people in those homes.”
He and his staff made dozens of calls and finally succeeded in getting representatives from the Army housing office, the Office of the Secretary of Defense, and Runzheimer to tour the Knox housing market.
Officials acknowledged that many of the homes upon which the 2006 housing rates in the area had been based were no good. Needham got the rates fixed — and many soldiers got a little money back.
“You can work within the system and get it fixed, but I’ll tell you, there are challenges to get it done,” Needham said.
Ditto at Naval Air Station Jacksonville, Fla., where the base commander couldn’t understand why BAH rates dropped for every officer this year by anywhere from $6 to $202 a month. For enlisted members, rates rose for every paygrade except E-9, which saw an insignificant drop of $1 per month.
“I cannot point to anything locally that explains that,” said Navy Capt. Chip Dobson. “The cuts don’t make sense, given my personal knowledge of the local real estate market. If anything, our rates are too low.”
Local rental costs in neighborhoods deemed acceptable for O-4s through O-6s with two or three children are about $1,800 a month, and utilities can add $250 to $300 more. However, the highest BAH rate in Jacksonville this year is $1,601 a month for O-7s and up — $202 less than the rate for those paygrades in 2005.
Dobson said his own research found that a good three- or four-bedroom house in a decent neighborhood rents for $1,395 a month and up, which guarantees officers would pay out of pocket for housing, something that was supposed to stop.
“The rates seem to be short, in the $500 to $600 range,” he said, suggesting that $2,100 would be the proper amount for a married officer to receive.
Seeking a second opinion
Sheila Higgenbotham, the Navy’s housing director for the South Coast, which includes parts of Florida and Georgia, said the rate reductions appear to be taken in stride by officers because many buy, rather than rent, and sufficient on-base housing exists for officers who don’t want to buy.
Still, she said, questions about the BAH rates at Jacksonville for both officers and enlisted members prompted the Navy to ask for a full Pentagon review of the region.
The review would look at current rates and at whether the single rate that now covers NAS Jacksonville, the nearby Naval Station Mayport and Naval Submarine Base Kings Bay, Ga., should be divided into smaller parts.
One sailor who sees something wrong with the Jacksonville rates is Aviation Electrician’s Mate Jonathan Bennett, a 20-year-old student in flight engineer school.
His monthly BAH of $959 just about covers the rent and utilities on a two-bedroom apartment, but he said it’s in an area that leaves much to be desired.
His wife “absolutely hates it,” Bennett said. “We are in a really crappy neighborhood.”
He said his car was broken into twice in two weeks, and even the hiring of an armed guard at the apartment complex doesn’t seem to have made it safer.
He picked the apartment mostly because it was near the base.
“We wanted to stay close,” he said. “We saw a lot of nicer ones further away, but we decided at the time this was the best for us because I was going to be in school and all.”
Although it’s unclear if any changes the Pentagon may or may not make would alter the Bennetts’ situation, defense officials acknowledge mistakes can be made in the way BAH rates are determined. But they say the system is built to quickly respond to such errors.
For example, officials realized that the tabulation of BAH rates in at least one market had been based on housing that would be considered inadequate in most parts of the country. A “double-wide” trailer should not count as a single-family three-bedroom home, but in that market, it had been — and was used in the surveys that set BAH rates there.
“Once we identified that, inadvertently, some of those had gotten into the data pool, we were able to adjust the rate midyear,” said Steve Westbrook, director of the Defense Department’s Per Diem, Travel and Transportation Allowance Committee.
But those kinds of glitches are easier to address than the issue of whether the housing standards assigned to various paygrades still make sense.
Defense officials said the standards are probably due for a review, but there’s been no word on when, or even whether, such a review might take place.
So some service members are still faced with the same trade-off as before — settle for less housing than they are comfortable with, or pay part of the costs themselves.
Aviation Warfare Systems Operator Airman Marlon Jordan, a student at Jacksonville, pays $804 a month for a one-bedroom apartment in a nice neighborhood. But when utilities are added, he’s dipping into his pocket to pay the bill.
For Jordan, that trade-off is worth it. He said he and his wife Kesha “have lived in rough neighborhoods” before.
“When we got here, my wife said, ‘We don’t want to do that anymore.’”
Ellie