Residential Communities Initiative

Friday October 20, 2006

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 increases, and
- 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 United States. 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 43 locations with 82,000 homes, more than 90 percent of on-post family housing in the United States.

What has the Army done? Through May 2006, the Army has privatized family housing at 32 installations, with about 68,000 homes. These 32 installations will complete $9 billion in work during the initial development period, of which the Army has contributed $596 million (a 15:1 leverage ratio). (The initial development period is the 3-10 year build-out period following privatization, during which inadequate housing is eliminated by replacement construction, renovation, or demolition, and new construction is completed.) Although most projects are in the early stages of development, through March 2006, the private sector has built 5,683 new and replacement homes, and renovation 7,019 homes.

What continued efforts does the Army have planned for the future? By September 2007, the Army will privatize housing at four additional locations, and expand privatized housing at three installations to support stationing decisions. These additions will increase the end state inventory by 8,000 homes, for a total of more than 76,000 privatized homes. Another seven installations are scheduled to transfer to privatized operations between 2008 and 2010.

For more additional information on Residential Communities Initiative

For more information on this and other topics see** Addendum J in the Army Posture Statement.**

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