Military Members to See Boost in Housing Allowance
A bigger housing allowance is coming for members of the U.S. military as servicemembers and their families deal with rising inflation and pricey housing markets.
The Department of Defense (DOD) recently released its Basic Allowance for Housing (BAH) rates for 2023 and the BAH will rise an average of 12.1 percent. DOD estimates it will pay out a total of $26.8 billion in BAH payments, and it says approximately one million service members will receive the benefit.
In a press release DOD stated, “The significant increase in average BAH rates is reflective of the unique market conditions experienced across many locations nationwide over the past year.”
DOD had already taken some action on the issue. It September, it authorized temporary automatic BAH Rate increases for 28 military housing areas that were seeing significant price appreciation. Areas impacted include San Diego, Miami, Boston, Houston, Orlando, and others. The temporary increases will expire at the end of the year and be replaced by the 2023 rates. There will only be marginal changes between those rates and the new numbers for 2023.
DOD calculates BAH rates by collecting data on 300 military housing areas across the nation. It factors both median current rent and utilities into its calculations and relies on a string of data points to reach its estimates, including rental cost databases, online rental listing websites, U.S. Census Bureau information, and more.
BAH rates vary by pay grade, whether a servicemember has dependents as well as location. According to Federal News Network, California military bases saw average housing costs go up by 20 percent, and for example an E-4 with dependents in Twentynine Palms, Calif., would get a
“BAH monthly payment of $1,974 in 2023 compared with $1,371 in 2022.”
DOD also points out that once a BAH rate is set, it does not go back down, even if housing prices decline.
“The Department is committed to the preservation of a compensation and benefit structure that provides members with an adequate standard of living to sustain a trained, experienced, and ready force now and in the future,” the press release said.
In a 2021 military lifestyle survey conducted by Blue Star Families, many military families cited frequent moves as a source of financial strain.
“Compounded across multiple moves during a military career, unreimbursed out-of-pocket relocation expenses can create financial hardship for families, especially when the active duty spouse often loses employment and the family loses income with a relocation,” the report stated.