Edition: Fri, September 28, 2007
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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:

- Traditional Military Construction,
- Basic Allowance for Housing (BAH) increases, and
- RCI Privatization.

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 on-post housing for the long term.

The program conveys existing housing and leases the underlying ground for a 50-year term to a qualified development partner. The partner collects rent from residents (military Families), equal to the Soldier's BAH. 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 installations with a projected end state of 88,045 homes, 97 percent of on-post family housing in the U.S.

What has the Army done? Through August 2007, the Army has privatized family housing at 36 installations with an end state inventory of 78,789 homes. These 36 installations will complete $10.4 billion in work during the initial development period (IDP) of which the Army contributed $1.3 billion. The IDP is the three to eleven 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 June 2007, RCI projects built 10,283 new and replacement homes and renovated 9,717 homes.

Also, RCI privatization has been expanded to other uses in the U.S. - (1) senior, single Soldier housing and (2) lodging. In 2002, Fort Irwin added 200 apartments to its RCI project, and four other installations have added or are in the process of adding apartments for their single, senior NCOs and officers. In 2003, the Army established the Privatization of Army Lodging (PAL) program, using the RCI processes as a model. The PAL program has been split into three projects with a total of about 17,800 rooms. The first project, comprised of close to 5,000 rooms, has been awarded and is expected to close in 2008.

What continued efforts does the Army have planned for the future? By September 2008, the Army will privatize housing at two additional locations that will increase the projected end state inventory by 1,954 homes. Another seven 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 and looks for project and portfolio enhancements.

Why is RCI important to the Army? RCI is critical to the Army's goal to eliminate inadequate family housing and sustain quality residential communities for the long term.

Military housing privatization continues to be the Army's top well-being initiative and a significant contributor to recruitment, readiness and retention.

The RCI Web Site is currently being updated. For additional information contact Mr. Tom Kraeer, Office of the Assistant Secretary of the Army for Installations and Environment (Privatization and Partnerships) at 703-614-5286.


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