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BAH rates to rise by an average of 6.9%

Service members will receive a slightly smaller average housing allowance next year than they received a year ago.

Overall, the Pentagon will spend about $17.4 billion on the Basic Allowance for Housing in 2009, about $100 million less than in 2008.

The average 6.9 percent increase represents a 0.4 percent decline from the 2008 nationwide average. The number of locations where rates went up actually expanded, but the increases generally were not as large as in 2007, said Susan Brumbaugh, director of the Pentagon’s BAH program.

The new rates, which take effect Jan. 1, were announced Monday.

BAH is designed to cover service members’ off-base rental housing costs. It’s calculated using a complex formula that looks at median current rental rates, the average cost of utilities, and renter’s insurance rates for various types of h ousing in each of 369 housing markets across the 50 states.

Given the poor state of the economy and the housing market, one might have expected to see a greater increase in BAH, Brumbaugh acknowledged. “Typically, rents go up, just like everything else,” she said.

But she said that officials also have not generally seen rents rise as the housing market has collapsed. “In your larger markets — areas like California or New York City — you have such a large market that the impact of families not buying and deciding to rent, ... there are enough units out there available that I would be surprised if it would be a big impact at all,” she said.

Brumbaugh said she would expect to see increases in rent in smaller towns and cities that surround many military bases. But her office did not specifically look at such overall trends, she said.

In 2009, the average increase in BAH for members with dependents will be about $95 a month. The Pentagon says a “typical” junior enlisted member with dependents will receive roughly $68 a month more than in 2008, while a senior noncommissioned officer with dependents will see a BAH increase of about $93 over 2008.

Rates for an E-5 with dependents will range from $739 a month in Paducah, Ky., to $2,763 a month in San Francisco. The 2009 spread for O-3s ranges from a low of $970 in Pine Bluff, Ark., to a high of $3,278 in San Francisco.

Rates for an E-5 without dependents will range from a low of $589 in Paducah to a 2009 high of $2,618 in New York City; the low BAH rate for an O-3 without dependents will be $863 in Paducah, while the high rate, $2,873, also will be paid in New York City.

The biggest overall average BAH rate increase was Denver’s 17.7 percent, followed by a 15 percent increase in Yuma, Ariz., and Louisville, Ky. At the other end of the scale, two Hawaiian counties, Maui and Kauai, had the biggest declines, 6.5 percent and 6.3 percent, respectively, she said.

BAH rates are based on rental data collected throughout the preceding year by base housing offices in every military housing area — some areas have two or three such offices reporting — and by a private contractor, Runzheimer International, which analyzes the data.

Brumbaugh aims to get about 60 percent of her data from base housing offices and 40 percent from Runzheimer. Any data that officials are not completely comfortable with is discarded, she said.

“We will always bend over backwards to make sure that the military member is getting the benefit of the doubt,” she said.

Brumbaugh pointed out that all service members have BAH rate protection. As long as a service member isn’t demoted or doesn’t change dependency status, his or her rate will stay unchanged on Jan. 1 if the new BAH rate for that location declines. Only service members being reassigned to those areas after the new rates take effect will receive lower payments.

“But we’re confident that we’ve got the right rate,” Brumbaugh said. “So even if they move to the area on 2 January, we’re confident that they can find something in their area that is within their BAH.”

In areas where rates increase, however, everyone receives the higher payments.

Brumbaugh said she receives complaints every year about BAH rates being too low in a given area. “That’s a normal reaction,” she said. Complaints, she said, can be addressed to each service’s BAH representative, who in turn contacts Brumbaugh’s office, which will re-analyze the data for that area.

Commands also can request site visits, she said.

But, she noted, “We’ve never had to go back and readjust rates because the data was incorrect.” The only exception during the past three years was a readjustment at Fort Knox, Ky., she said — and that was because of data on mobile homes being incorrectly counted.

BAH charts online

BAH rates with dependents

BAH rates without dependents