Military Housing, rentals, home buying, real estate, VA home loans - Marine Corps Times

Private developers replace, fix base housing

With the bulk of the family housing privatization projects already awarded to private developers, defense and service officials are now focusing on making sure the deals — and the military houses — stay in good shape for the next 50 years, officials said.

Service officials awarded 11 projects in September as they tried to meet their goal of having most of the projects awarded in fiscal 2007. In all, 85 projects involving 171,529 units of family housing have been awarded to private developers, who are to fix or replace, maintain and manage the housing. When finished, the services will have awarded projects for about 195,000 houses by 2010.

The Army, Navy and Marine Corps have transferred all their problems with inadequate housing over to the private sector, and it’s the privatization partners’ responsibility now to fix or replace the housing. As of June 30, about one-third of the construction and renovation work in the projects awarded had been completed.

Of the 171,529 units of housing transferred, more than 129,000 were inadequate, according to defense officials. The Air Force has less than 10,000 inadequate units of family housing remaining in its inventory, and that should be addressed within the next year.

The Air Force has not moved as fast as the other services, partly because its housing stock was in better condition than that of the other services and did not need privatization as badly, said Bob Helwig, deputy director of housing for the Defense Department. By partnering with the private sector, the services have invested $1.66 billion in family housing, while the private sector has invested more than $20 billion.

“And the Air Force was more cautious in implementing privatization. They were more concerned that ceding control of housing to the private sector would end up with problems,” he said.

“We’re really in the home stretch now,” said William Armbruster, deputy assistant secretary of the Army for privatization and partnerships. The Army has transferred housing at 36 installations to private developers, with 76,000 units. In the end, about 88,000 units of housing will be privatized at 45 installations, and the goal is to complete the work by 2010. The Army is looking at ways to privatize smaller installations with smaller inventories of family housing, he said.

Sustainment — maintaining, renovating and replacing over the long term — is a key part of the projects, so that in 50 years, the houses do not end up dilapidated, as many were in the 1990s, Armbruster said. Short on money, the services did not fund the required maintenance for family housing and instead used money from housing allowances to fund other needs. Defense and service officials contend that with these privatization deals, the money from service members’ rent — based on their housing allowances — returns to the housing.

Surveys to find out satisfaction

The services conduct surveys to determine whether military families are satisfied with their housing and the services provided. Defense officials also have commissioned a study on the factors in service members’ housing choices, and researchers have started gathering information, Helwig said. Across the services, the occupancy rate of privatized housing is about 91 percent, he said.

But the amount of housing needed is a moving target, so tweaks are being made as a result of changes in end strengths, restationing and base realignment and closure. “If there’s a privatization project in place, we look at whether we can expand the project, or if it’s finished and topped out, we look at whether we can combine it with another base,” he said.

For example, the Marine Corps had a shortage of housing at large ground bases, primarily Camp Lejeune, N.C., and Camp Pendleton, Calif.. “With the Marine Corps end strength increase, it’s going to exacerbate that,” said Karen Ayers, head of the Marine Corps’ housing section. That is one primary focus since the Marine Corps awarded its last three privatization projects in September.

There are tentative plans for the increases, she said, but the numbers are not available because they have not yet been submitted for approval to the Defense Department and Congress. The Marine Corps’ approach is to privatize bases in phases. “We’ve not had the approach of building a ton of housing at a time,” she said. Rather, officials evaluate each year what is available in the private sector, the number of families who need housing, what’s planned for the private sector, any fluctuations in housing allowances, and other factors.

Marine Corps officials expect the bulk of their work to be completed — houses renovated or replaced — by 2012. Work is expected to be completed by 2014 at Camp Lejeune, Twentynine-Palms, Calif., and Marine Corps Base Hawaii, Kaneohe Bay, she said.

The Army is also considering making some changes in the amount of housing, because of the changes in its force and base structure, Helwig said. Defense Department officials are reviewing the housing requirements at Forts Carson, Bliss, Lewis, Bragg and Drum.

A problem developer

The Air Force is further behind schedule in its renovations and construction, partly because of recent problems with one developer, American Eagle Communities. The developer, which has fallen behind in construction on four Air Force projects, one Army and one Navy project, will not have an adverse effect on the overall privatization initiative, Helwig said The projects are at Fort Leonard Wood, Mo. (2,242 units); Patrick Air Force Base, Fla. (552 units); Moody AFB, Ga. (606 units); Little Rock AFB, Ark. (1,200 units); Hanscom AFB, Mass. (784 units); and in the Northwest Navy region, including Naval Base Kitsap, Wash. (2,985 units.) Officials with American Eagle Communities could not be reached for comment at press time.

The Navy and Army are moving to take action and get new general partners, Helwig said. Those services are limited partners with the developers in their privatization deals. But the Air Force deals are structured to be more at arm’s length. It is up to the lender that provided the capital to American Eagle to take action, Helwig said. Although the construction is behind schedule — or stopped, as in the case of Moody AFB — the developer continues to manage and maintain the other houses in the project. The Air Force has no cash at risk in its projects, he said.

“At the end of the day, the bad result for the government is that housing is not being built,” Helwig said.

“These six projects are a speed bump, but the amount of housing we’ve fixed and the construction we’ve generated is a very, very good story,” he said.

Although there are some growing pains as families adjust to dealing with a civilian landlord rather than a military chain of command, families across the country have praised the new housing, which has more storage, modern amenities, and playgrounds.

“This is the first time we’ve lived in new housing,” said newly promoted Sgt. Tony Persina, who lives with his family at Fort Belvoir, Va. “I love it. I can’t even describe it.”

Coretta Wiggins, wife of Army Sgt. 1st Class Mark Wiggins, said the maintenance crew for the new Lewis Village at Fort Belvoir “is great. If I call today with a problem, they’ll come today and look at it and get somebody out at least by the next day.

“This is the best housing we’ve ever lived in.”

DISCUSS: Will privatization fix the problem?