New Year lightens housing allowances
January 28, 2011
FORT BRAGG, N.C. - Change is typically a sign of progress, but sometimes it is just a sign of the times.
With government purses tightening around the country, budget cuts are certain to trickle down to the average Soldier.
The latest 'financial squeeze' outlines a basic allowance for housing drop for 2011, which reflects an eight percent decrease in housing compensation for the Fayetteville area. This is the first time, since the inception of BAH, that rates have dropped rather than increased. The deflation reflects data from rental rates in the area, according to the Defense Military Pay Office, and is a joint study of the local military housing office and Runzheimer International.
Many Families may breathe a collective sigh of relief, though, because the rate drop only applies to Soldiers who receive permanent change of station orders to Fort Bragg in 2011. BAH for those who currently live and work in the area remains stabilized, thanks to an addendum to the fiscal year 2001 National Defense Authorization Act, known as individual rate protection.
This protects the 38,000 Soldiers currently stationed at Fort Bragg (before 2011), as BAH rates climb about one percent for those under the IRP umbrella. Such a modest amount hardly lines the pockets of individual Soldiers but will balloon the military housing budget by $100 million, for a yearly cap of $19 billion.
"A typical junior enlisted member with dependents will see BAH rise about $39 a month. A senior non-commissioned officer with dependents will receive about the same as last year, on average," wrote Dennis Scott, director of the Defense Military Pay Office.
Jim Landry, deputy director of the Defense Military Office, Fort Bragg, further explained, "The new rates take effect on January 1 and will be reflected on mid-month January paychecks dated January 14. If a Soldier does not permanently change his or her station (leave), the Fort Bragg's BAH will be rate protected."
Lowered BAH allowances are traced to the idea that housing and apartment rental rates have dropped in response to the housing recession. For instance, said Landry, "If a junior enlisted with dependents at Fort Bragg's BAH rate is $1065 monthly, no PCS, (it) will remain the same. The junior enlisted PCSing to Fort Bragg after December 31, 2010, will get $990 monthly BAH."
Within the United States, BAH rates are designed to cover rent, utilities and rental insurance. Mortgage rates do not factor into the final tally because the costs of home ownership fluctuate between Families. According to the DMPO, "Data is collected on six types of housing with different numbers of bedrooms. Rates are then set based on rent for particular types of housing deemed appropriate for each pay grade, both with and without dependents."
Housing types include apartments, townhomes, condominiums and single-Family residences in the Fayetteville area. In a community energized by the Base Realignment and Closure and the arrival of U.S. Army Forces Command, Forces Command, rental rates seem to have risen - rather than fallen - over the past two years. Soldiers may end up dipping into base pay to supplement BAH allowances. Research released by Picerne Military Housing this month, lists the average rent for a three bedroom home within a 10 mile radius of Fort Bragg as $1,125 a month, with a matching rental deposit. This already exceeds the BAH earned by many lower enlisted Soldiers. Military Families should set a budget and search for rentals within that range, then explore their options, including on post housing, if finances are tight.
Despite the BAH 2011 drop, servicemembers benefit from the stability of BAH protective measures.
And like other Families around the country, Army Families can pull together to find creative solutions in this changing economy, ensuring that they start and finish this year as strong as ever.