WASHINGTON (Army News Service, Dec. 19, 2006) - Servicemembers will receive an average 3.5 percent boost in their basic allowance for housing compensation benefit in 2007, Defense Department officials said.
The planned BAH increase starting Jan. 1 works out to about $300 million more than what was paid in 2006, officials said.
"The continued improvement in housing allowances represents our commitment to the preservation of a compensation and benefit structure which will provide members with a suitable and secure standard of living that will sustain a trained, experienced and ready force in the future," Cynthia Smith, a DoD spokeswoman, said yesterday.
Officials said military housing allowances are computed according to three key criteria: median current market rent; average utilities, to include electricity, heat and water/sewer costs; and average renter's insurance.
BAH rates also are based on dwelling type and number of bedrooms in a given area and then calculated for each pay grade, both with and without family members.
For servicemembers with family members, average increases in the BAH are approximately $44 per month. For example, a typical specialist/corporal (E-4) will receive about $34 more in BAH than in 2006, while a master sergeant/first sergeant (E-8) will receive about $42 more than this year.
The BAH rate system has built-in protections to ensure that an individual servicemember in a given location won't see his or her BAH rate decrease. This provision assures that members who have made long-term lease or contract commitments are not penalized if the area's housing costs decrease.
Some areas' housing costs have remained relatively stable, while others continue to rise. Most of the costliest housing in the United States with the highest BAH rates are clustered on or near the East and West coasts, and the state of Hawaii.