Pentagon Stays Mum on Troop Housing Allowance Boost to Offset Pandemic Pinch

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For rent sign outside home.
In this Sept. 24, 2007 file photo, a "for rent" sign is posted outside a home in Denver. (AP Photo/David Zalubowski, File)

U.S. service members living in locations gripped by housing shortages and ballooning rental costs worsened by the coronavirus pandemic may get some relief through an increase in their Basic Allowance for Housing as early as Oct. 1.

Or maybe they won't. So far, the Pentagon has declined to say whether the increase will be approved, despite an apparent memo circulating online and percentage increases posted by one service.

The memo from the director of military compensation policy requesting the boost was shared on social media nearly two weeks ago. Meanwhile, the U.S. Coast Guard published a spreadsheet last week containing a list of 56 proposed locations that would be eligible for higher allowances.

The Coast Guard put the file on its deputy commandant for mission support webpage, but the link to the spreadsheet is no longer listed on the Coast Guard's travel branch's website, only deepening speculation about the Pentagon's intentions for BAH rates.

"As soon as we have an update, we will follow up," said Defense Department spokeswoman Lisa Lawrence in an email Sept. 13. The department has not responded to further requests for information.

"The U.S. Coast Guard partners with the Department of Defense to determine all basic allowance for housing rates (BAH) and is working to finalize updates to existing BAH rates," Lt. j.g. Sondra-Kay Kneen, a Coast Guard spokeswoman, wrote in an email response when asked about the housing allowance increases.

A total of 56 locations would be eligible for the temporary boost through the end of the year and the change could affect more than 200,000 service members, according to the Coast Guard spreadsheet.

The boosts would range from 10% to 20% of current BAH rates.

The "action memo" posted on social media was listed as being from J.B. Busch, director of military compensation policy, asking Leonard Litton, working in the capacity of deputy assistant secretary of defense for military personnel policy, for an increase in BAH rates because the COVID-19 pandemic has "resulted in rental housing availability shortages in many military housing areas, resulting in significant increases in rental housing costs."

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The memo stated that the temporary increase is designed to offset out-of-pocket expenses for those assigned to areas most seriously affected by the pandemic housing crunch.

But the DoD has deferred questions from Military.com about the memo's authenticity, and has not said whether Litton approved the request or whether an increase is coming.

The Coast Guard spreadsheet described the list as "final" as of Sept. 2.

Service members would be required to certify that they are facing higher costs, according to the memo. But it said the large majority of those receiving BAH in the listed geographic areas would be eligible for the temporary rate hike on Oct. 1.

The Coast Guard list showed five installations in rural or rapidly growing areas would see the largest boost at 20%. The areas include Twentynine Palms in California; Boise and Mountain Home Air Force Base in Idaho; Eglin Air Force Base in Florida; and Spokane, Washington.

Eleven locations in California, Virginia, Texas, Florida and Montana would see a 15% increase, while 40 more scattered across the U.S. would see a 10% increase, if the initiative is approved.

Housing demand has skyrocketed across the U.S. during the pandemic, in part because of record-low interest rates that drove people to shop for homes. But it is also driven by people living in smaller homes and apartments seeking to rent or purchase larger spaces during shutdowns.

Landlords also saw an opportunity to sell their properties quickly at premium prices, removing them from the market and causing a scarcity that drove up demand and prices, according to the National Association of Realtors.

"In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates," Lawrence Yun, the association's chief economist, said in an August release.

The BAH increase would apply to all paygrades and types of housing, according to the memo. Even if apartment costs in an area haven't risen by the designated percentage but single-family home costs exceed the percentage, all eligible personnel still would receive the set temporary increase for the area.

The memo also says the increases would remain in effect until Dec. 31. BAH rates are calculated yearly based on various factors such as housing availability and prices. The rates for the next calendar year are typically published in mid-December.

The increase likely would not be awarded to those living in military privatized housing, because they have not faced cost increases and pay rent to military property managers at prices set by the BAH rates.

The Coast Guard spreadsheet noted that 59 areas had been considered but 56 made the final cut, or roughly 18% of the U.S. military's domestic housing areas.

Busch estimated that the cost to the military services would be roughly $159 million.

-- Patricia Kime can be reached at Patricia.Kime@Monster.com. Follow her on Twitter @patriciakime.

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