BAH 101

First a few definitions to clear up some common misconceptions:

BAH Program Purpose & Goal: “The purpose of the Basic Allowance for Housing (BAH) program is to provide fair housing allowances to service members. The goal of the program is to help members cover the costs of housing in the private sector; therefore, rental-housing costs in the private sector are the basis for the allowance.” “Members receive a housing allowance when government quarters are not available. DoD determines an equitable housing allowance to enable members to afford suitable rental housing near their duty location. The allowance is set based on geographic duty location, pay grade, and dependent status.” “The Department of Defense and the Services designed the BAH program to provide accurate housing allowances based on the market price of rental housing rather than member-reported rents. The BAH program measures rental-housing costs in the civilian market rather than measuring how much members spend on housing. This method ensures a more accurate correlation between allowance payments and rental prices.”

DoD Housing Profile Standards: “The Services have agreed to housing standards that allow members to receive a BAH that correlates to what civilians who earn comparable amounts would pay for housing. That is, we use housing standards to link housing costs with a particular paygrade. Of course, members are free to choose where to live and in what type of dwelling. The different types of units are referred to as “profiles” or “anchor points.” DoD uses housing profiles to link rental costs with particular paygrades.”

1 Bedroom Apartment: E1-E4 (without dependents)

2 Bedroom Apartment: E1-E4 (with dependents)

2 Bedroom Townhouse/Duplex: E5, O1-O2 (with/without dependents)

3 Bedroom Townhouse/Duplex: E6-E8, O3 (with/without dependents)

3 Bedroom Single Family Detached House: E9, O4 (with/without dependents)

4 Bedroom Single Family Detached House: O5-O10 (with/without dependents)

COMMENT: 55.88% of the survey respondents (4809 total respondents) indicated that they were NOT aware of their DoD Housing Profile Standard. I suspect this number is higher and respondents may have confused their DoD Housing Profile Standard with their base/privatized housing entitlement, which is drastically different. Also 41.11% of respondents indicated they were mortgage holders or property owners vice renters.

Military Housing Area (MHA): “In computing BAH, DoD includes local price data for: rental housing & utilities (including electricity, heating fuel, water, & sewer). We employ a contractor to collect the data annually for approximately 300 Military Housing Areas (MHAs) in the United States, including Alaska and Hawaii.” “The DoD and the Services define these MHAs by sets of ZIP Codes.” “MHAs were originally defined using the Defense Enrollment Eligibility Reporting System (DEERS) data. DEERS data provided information on where members at each installation were living. This created a data set that naturally excluded undesirable neighborhoods, which members had already avoided.” “However, DoD and the Services realize that populations, neighborhoods, and housing conditions can change over time. Periodic re-examining of MHA boundaries is an important and on-going part of the BAH process.” “A comprehensive review of MHA boundaries was conducted in 2011-2012; boundary changes resulting from this review accounted for closed and realigned installations, and military and civilian demographic shifts.”

COMMENT: Since the installation zip code is used as the identifier for the associated MHA many members assume that only that immediate area surrounding the installation is considered for the rental data collection; while in fact the area is much larger. A simple test to see if your current residential area is part of your installation’s MHA can be performed by entering your residential zip code in the BAH calculator (; if your residence is part of the MHA then your installation name will be reflected.

BAH Determination Process: “Nation-wide data collection occurs in the spring and summer when housing markets are most active. Rental costs are collected for apartments, townhouses & duplexes, and single-family rental units of varying bedroom sizes.” “We do not include inadequate units in determining allowances, such as:” Mobile homes, Efficiency apartments, Furnished units, Income-subsidized complexes, Age-restricted facilities, Seasonal units.” “We gather enough data to attain a 95% statistical confidence that the estimated median rent is within 10% of the true median rent.” “Current, valid rental costs are crucial to accurate BAH rates. We use data from multiple sources to provide a “checks and balances” approach. This ensures reliability and accuracy. We obtain current residential vacancies from local newspapers and real estate rental listings. We also contact apartment and real estate management companies to identify units for rental pricing.” “We consult with real estate professionals in each MHA to confirm market rental prices and obtain additional data. Where available, we also contact fort/post/base housing referral offices and installation leadership. We tap the local housing office knowledge and gain insights into the concerns of our members.” “Properties are subjected to additional screening and validation processes. Current, up-to-date rental information from telephone interviews and the internet is utilized from contacts provided by the local housing offices.”

COMMENT: 61.03% of the survey respondents (4809 total respondents) indicated that they did NOT understand how their BAH is determined. I suspect this number is higher given that many members are unsure of the MHA and DoD Housing Profile Standards. Of particular concern was the overwhelming 80.01% of survey respondents who indicated that they did NOT receive quality assistance (i.e. property listings, school district information, crime rate data, etc.) from their base housing office in finding appropriate rental housing at their current CONUS assignment location.

LOCAL EXPERTISE: The question is often asked “What can the local installation leadership do?” and often the assumption is “nothing”….this is not true. The process is called “Local Expertise” and is defined as: “DoD and the Services value “Local Expertise” in the data collection process. We contact the local military housing office (MHO) and command leadership at each installation to provide them the opportunity to contribute to the BAH data collection effort. The expertise and knowledge of the referral office is crucial, and the information they provide is critical to the process. “Housing referral offices and installation leadership have the opportunity to: ”Provide local rental housing referrals, excluding any inadequate units ; Identify specific geographic areas that contain unacceptable housing; Flag rental properties collected by the contractor that are not adequate or suitable.”

COMMENT: 90.03% of survey respondents who indicate that their current CONUS installation does NOT provide an opportunity via Surveys, Town-hall Meetings, etc. for members to raise issues or concerns with BAH rates and/or off-base housing availability or any off-base housing issues or concerns. This was an indicator to me that “Local Expertise” is not being utilized to its full potential across the DoD.

BAH Cuts: It is also important to know that the actual BAH amount itself (percentage of coverage) was reduced from 100% of the computed BAH value to 95% of the computed value starting in 2015. Summary of the cuts: “2015: Renters Insurance (approximately $20 per month) removed from BAH computation; 2015: In an effort to slow the growth in compensation costs, a member cost-sharing element (out-of-pocket expense) of one percent was introduced into the housing allowance rates in 2015; 2016: 2% total reduction; 2017: 3% total reduction; 2018: 4% total reduction; 2019: 5% total reduction. The out-of-pocket is administered using an absorption rate, which is computed to ensure members of a similar pay grade/dependent status pay the same amount out-of-pocket regardless of their location.”

COMMENT: When it comes to a member’s Earned Benefits it is very important that we understand each and can speak knowledgeably about each. Big misperception of the BAH program was that it paid “100% of a member’s housing costs”…this is incorrect. BAH did (pre 2015) pay “100% of the computed rental housing costs for the rank appropriate DoD Housing Profile Standard within the Military Housing Area”…while these are similar in phrasing, the reality could be far different.

FOIA Requests: In addition to deciphering the DoD BAH process documents and creation of a 10-question Survey Monkey survey I also submitted three Freedom of Information Act (FOIA) Requests for “Data collected by contractor (Robert D. Niehaus, Inc) and any documents related to “Local Expertise” information/inputs provided by Ellsworth AFB, any related documents from Air Force Global Strike Command and/or verification of said data and/or BAH rate determinations by the DoD for Ellsworth AFB, SD for 2015, 2016, 2017.” I received the local expertise information/briefings from Ellsworth, however my request for the actual data collected was denied by the SAF FOIA office as “proprietary information”, my appeal to that denial was also denied. Also I did not receive any reply from the AFGSC FOIA office to my request.

COMMENT: The local installation does NOT (per my findings) ever see the data collected…i.e. the number of rental units, rental costs, names of properties, etc. so that they could do a “trust but verify” review. And if an installation utilized “local expertise” to identify certain properties, certain areas, etc. again there’s no verification that said inputs were received and acted upon.

FINDINGS & RECOMMENDATION: I identified 10 findings & recommendations; the first of which was “Lack of Transparency”, which underscores the other nine findings & recommendations. The BAH process, is a mystery to many (too many) and even the new year’s announcement of the updated rates is not an official message, but instead is typically found via unofficial social media, the Air Force Times magazine or simply a “surprise” in your January LES. So I submitted an Airman Powered by Innovation (API) suggestion to develop and use a simple template that explains how the new BAH rate for your rank/dependent status was determined.

Here’s the example I submitted:

To determine the E6 with dependent BAH Rate for Yourname AFB rental data was collected from 14 3-bedroom townhome complexes (DoD standard housing profile) located within the designated Military Housing Area, which includes the towns/communities of Smallville, Metropolis, Springfield, & Mayberry. Base leadership requested that two of these complexes be excluded from the BAH computation. Of the remaining 12 3-bedroom townhome complexes, the monthly rent ranged from $1400 to $1600 per month, with the median range of $1575.

Based upon E6 Regular Military Compensation of $67,000 the US Census annual American Community Survey (ACS) determined the average monthly utility expenditures to total $145 for that income range.

The total E6 with dependent rate BAH for Yourname AFB is computed as $1575 (rent) + $145 (utilities) = $1720

The total E6 without dependent rate BAH for Yourname AFB is computed as 75% of the with dependent rate:

$1720 x .75 = $1290

COMMENT: My API suggestion was not approved.

ELLSWORTH ENGAGEMENTS: Before I sent out my study I met with the Wing Command Chief as well as sent copies to the Mission Support Group Commander for their awareness. Then copies of the study were sent to the local offices of our South Dakota Congressional Delegations. I met with the Senators and Congresswoman’s local staff to discuss the study and the issues regarding BAH program; the consensus was that the legislation directing the BAH program itself was good…the issues identified were at the Service level (transparency, education, local expertise, etc.). As Rapid City and Box Elder started to plan new housing developments, apartment complexes, etc. this study found its way into the local developers to help guide them towards building properties more in line with the DoD Housing Profile Standards…while rental apartments/townhomes/condos may not be what members “want” rental apartments/townhomes/condos are what the BAH is designed to support.

In closing let me add this…

Your benefits (pay & allowances), healthcare, tuition assistance, etc. etc. etc. come not from the Service nor the DoD; they are all (each) a result of legislation from the Congress. The Services then implement was is directed to them by the Congress. BAH was designed to allow local installation engagements…however it appears that is not always the case.

Also, if the subject of BAH (or any of your Earned Benefits) is important to you please consider joining the AFSA so you’ll know that your voice is heard.

This information was provided by CMSgt(ret) Kevin Ott.