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BAH rates up 5 percent in 2014; program changes on horizon

Dec. 23, 2013 - 04:38PM   |  
Basic Allowance for Housing rates for 2014 will increase by an average 5 percent.
Basic Allowance for Housing rates for 2014 will increase by an average 5 percent. (Army)
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2014 Base Allowance for Housing by state (PDFs)

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Big changes to Basic Allowance for Housing rates are under consideration for down the road inside the Pentagon, but for now many troops can rest easy knowing that they will receive the standard uptick for next year.

BAH rates for 2014 will increase by an average 5 percent, defense officials announced Tuesday. That will vary greatly depending on location, but on average troops will see nearly $80 more in their monthly housing allowance.

The 5 percent bump is largest rise in five years since the nationwide housing market crash and recession in 2008 sent average BAH rates downward.

In recent months, BAH has moved into the crosshairs for the Pentagon’s budget cutters. Top officials say they are looking for ways to carve some savings from the roughly $20 billion spent each year on off-base housing. About 1 million troops receive BAH.

Significant changes likely would require congressional approval and some defense officials say they will be included with the Defense Department’s fiscal 2015 budget request to Congress in February.

“Any changes to BAH proposed in the upcoming budget submission would not affect BAH rates this year for service members,” stressed Lt. Cmdr Nate Christensen, a Pentagon spokesman. “No final decisions have been made regarding BAH rates for 2015 and beyond.”

BAH is intended to cover 100 percent of average off-base housing costs. Proposals to lower rates could include returning to a Pentagon policy that predated the early 2000s, when rates were intended to cover only about 80 percent of average off-base housing rental costs, with troops expected to cover the other 20 percent out of their own pockets.

Cheryl Anne Woehr, who heads the BAH office at the Pentagon, declined to discuss details of potential policy changes to policy.

However, she said, “Certainly because BAH is such a large portion of our personnel costs, it’s something that we’re looking at.”

At the same time, she added, “We don’t want to adversely impact the quality of life of our service members. We need to ensure that they can maintain their lifestyle.

The largest increases in BAH rates will go to places like Hawaii, where some 40,000 troops will see their rates increase by about 15 percent compared to 2013. Both Fort Hood in Texas and Fort Gordon in Georgia will see rates go up about 11.5 percent.

The largest decreases will occur in places where the housing market continues to slump and the cost of renting an apartment is falling. That includes Bremerton, Wash., where rates for next year will fall by 5.6 percent, and Beale Air Force Base, Calif., where rates are down 5.2 percent. In Virginia, Hampton Roads and Newport News will see a 3.1 percent drop for troops moving into that area.

Under a Pentagon policy of individual rate protection, troops who are already assigned to a location where average rates will decline will not see any redcution in their checks; they’ll continue to receive their previous BAH rate for as long as they remain assigned to that location.

That’s based on the assumption that many troops sign multi-year leases or buy homes at the market rate during their first year in that location.

Lower rates apply only to troops who make a permenant change-of-station move into such a location during calendar year 2014.

On the other hand, anyone living in a location where rates go up will see the increase in their paychecks, regardless of how long they have been assigned to that location.

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