Most housing rates dip for 2011 as pay, subsistence increase
December 15, 2010
WASHINGTON (Dec. 15, 2010) -- Most military housing allowance rates will decrease slightly for 2011, but servicemembers will receive, on average, as much or slightly more money than they did this year, Defense Department officials said today.
Cheryl Anne Woehr, housing allowance program analyst, said overall rates are fairly stable.
"On average, they'll decrease about six tenths of a percent," she said.
The 2011 Basic Allowance for Housing rates take effect Jan. 1. A provision ensuring against rate decreases for servicemembers already stationed at a location means Soldiers, Sailors, Airmen and Marines will receive an average 1.1 percent increase, Woehr said. That overall increase is "because of the effects of individual rate protection and the distribution of servicemembers throughout the [United States]," she explained.
Individual rate protection ensures that members who have made lease or contract commitments for housing aren't penalized if an area's costs decline. Any decreases apply only to members who move to a location after rates change. Even if housing allowance rates decrease over two or more years, military members stationed in the same location are assured their previous, higher rate, Woehr said.
"They receive the higher of what they were paid Dec. 31, or the new rate," she said. "If the rates go down one year, the servicemember receives the previous year's rate. If the rates go down again, the servicemember would continue to get that year-one rate."
The allowance covers housing costs for servicemembers living off military installations in the United States. Those who live in government housing don't receive the allowance. Servicemembers stationed overseas who live in private housing receive the overseas housing allowance.
Rates for that allowance are reviewed at least every six months, defense finance officials said.
"The reality is, the [basic allowance for housing] rates vary and the changes in the rates vary across the country, with some housing areas decreasing as much as eight percent and others increasing more than 10 percent," Woehr said. "Rent is the largest component of the BAH rates, so that has the most influence on what rates do."
The allowance rate is computed annually for each military housing area and is based on three factors: median current market rent; average utilities, including water and sewer, electricity and heating costs; and average renter's insurance.
Total costs are assessed for six housing profiles, based on dwelling type and number of bedrooms, in each military housing area. Housing allowance rates are then determined for servicemembers in each pay grade, with and without dependent family members. The department will pay its more than 1 million Active Duty servicemembers an estimated $19 billion in housing allowance over 2011.
Jeri Busch, director of military compensation, said servicemembers also will see an increase in pay and subsistence allowances in January. Unless modified by Congress, a 1.4 percent basic pay raise takes effect Jan. 1, by operation of law, and reflects the change in the employment cost index, she said.
The basic allowance for subsistence in 2011 will increase 0.36 percent, Busch said. The new rates will be $223.04 for officers and $323.87 for enlisted servicemembers.
Since 2002, defense officials said, military pay has risen 42 percent, housing allowances have risen 83 percent, and the subsistence allowance has risen 40 percent. By comparison, private-sector salaries have risen 32 percent over that time, officials said.