BAH rates adjusted for rental markets

By Tom Philpott: PNT columnist

Basic Allowance for Housing (BAH) paid to nearly a million service members living off base in stateside areas will increase an average of 2.5 percent in January to keep up with rising rental costs.

But in 158 military housing areas — 43 percent of the total nationwide — current BAH recipients will see no change to their allowance for 2010, because local rents, on average, have fallen over the last year, said Cheryl Anne Woehr, an analyst for the Defense Department’s BAH program.

BAH rates are adjusted annually for 364 military housing areas based on changes in local rents, utilities and renters’ insurance for the type of housing appropriate for each military pay grade. The overall increase for 2010 is the smallest for the BAH program since it began a decade ago, the predictable result of a distressed economy.

In areas where rental data show costs have climbed, BAH will increase effective Jan. 1. Where rental costs have declined, BAH rates will be lowered. But the lower rates only will affect service members newly assigned to these areas on or after Jan. 1.

Current BAH rates will remain in effect for those already living in areas where rents have fallen from last year.

This rate protection feature ensures that members who entered into rental contracts or mortgage agreements before 2010 will not see their take-home pay crimped by a slide in the local rental market.

With the 2010 rates, the annual cost of the BAH program will reach $19 billion, up from the $17.4 billion estimate last year. About 50,000 more members will draw the payments than did at the start of 2009.

The typical married junior enlisted will see his or her monthly allowance climb an average of $25. Married senior noncommissioned officers will see, on average, a $42 a month BAH increase.

Actual rate will vary by location, pay grade, location and whether a member has dependents to house.

Some of the largest average BAH increases for members with dependents will occur in Louisville, Ky. (13.6 percent), West Point, N.Y. (11.4 percent), Camp Lejeune, N.C. (10.9 percent) and Salina, Kan. (10.5 percent).

Some of the steepest declines in BAH for new arrivals with dependents will happen in Fallon, Nev. (down 7.3 percent), Brunswick, Maine ( -5.8 percent), Panama City, Fla. (-5 percent) and Salt Lake City, Utah, (-5 percent).