Residential Communities Initiative

What is it? The Residential Communities Initiative (RCI) is the Army’s military housing privatization program.  RCI is a primary component of the Army’s plan to eliminate inadequate military family housing using a combination of:

In 1996, Congress provided the military Services with authority to obtain private sector capital and expertise to construct, improve, and sustain military housing in the U.S.  The RCI program leverages appropriated funds and on-post housing assets to obtain private capital and expertise to build, renovate, operate, and maintain adequate family housing for the long term.  The program conveys existing units, and leases the underlying ground, for a 50-year term, to a qualified development partner.  The partner collects rent from tenants (military families), equal to the soldier’s basic allowance for housing.  The Army may make an equity contribution when necessary to ensure adequate funds for the required scope of work.  The RCI program currently plans to include 45 locations with a projected end state of 86,800 homes, more than 92% of on-post family housing in the U.S.

What has the Army done? Through September 2006, the Army privatized family housing at 33 installations, with an end state inventory of 72,000 homes.  These 33 installations will complete $9.6 billion in work during the initial development period, of which the Army has contributed $787 million.  (The initial development period is the 3-10 year build-out period following privatization, during which inadequate housing is eliminated by replacement, renovation, or demolition, and new construction is completed.)  Although most projects are in the early stages of development, through July 2006, the private sector built 7,214 new and replacement homes, and renovated 7,583 homes.

What continued efforts does the Army have planned for the future? By October 2007, the Army will privatize housing at three additional locations and expand privatized housing to support stationing decisions at three installations already privatized.  These additions will increase the projected end state inventory by 4,555 homes, for a total of more than 76,400 privatized homes.  Another nine installations are scheduled to transfer to privatized operations between 2008 and 2010.  The Army is protecting its investments and the interests of Army families with a rigorous portfolio and asset management process.  This process monitors project performance, compliance with development plans and schedules, and financial health over the 50-year term of the business agreements.

Why is this important to the Army? RCI is critical to the Army’s goal to eliminate inadequate housing and sustain quality residential communities for the long term.  RCI allows the Army to leverage appropriated funds to achieve these results more economically than using traditional military construction appropriations.  Quality, affordable housing is a key issue for the well being of Army families, and a significant contributor to recruitment, readiness, and retention.

 

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