CBO Report on Military Basic Housing Allowance

March 6, 2024 3:48 PM

The following is the March 6, 2024, Congressional Budget Office report: How the Military’s Basic Allowance for Housing Compares With Civilian Housing Costs.

From the report

The U.S. military has provided room and board, or allowances in lieu thereof, to its personnel and their dependents for many decades. Currently, most service members on active duty are provided with housing through the basic allowance for housing (BAH), which is part of their cash compensation. In fiscal year 2023, funding for all types of BAH was about $24 billion (in 2023 dollars), 14 percent of funding for the Department of Defense’s (DoD’s) military personnel accounts. Retaining active-duty personnel depends in part on whether their compensation package—which includes the housing allowance—is sufficient to entice them to stay in the military.

In this report, the Congressional Budget Office compares the kinds of housing that DoD defines as suitable for military personnel who receive BAH, known as military housing standards, with the housing choices made by two groups of civilians: those with age and education profiles comparable to military personnel of each pay grade and those with comparable income. CBO also compares the size of BAH payments (which are derived from the military housing standards) with the rental costs (including utilities) that comparable civilians pay.

CBO focused its analysis on civilians who were similar to enlisted military personnel with dependents at pay grade E-5 from 2017 to 2019. Service members at that pay grade are typically between the ages of 23 and 28 and hold the rank of sergeant in the Army, Marine Corps, and Space Force; staff sergeant in the Air Force; or petty officer, second class in the Navy. They constitute one of the largest groups of BAH recipients.

CBO found the following:

  • The housing choices that civilians made varied considerably by location. They tended to live in smaller units in more expensive areas and larger units in less expensive areas. By contrast, the military housing standards for off-base housing do not vary by location, regardless of prevailing housing costs.
  • Civilians who were similar to military personnel in demographic characteristics (age and education) tended to rent smaller housing units than the military housing standard. Civilians who had income similar to that of military personnel also sometimes rented smaller housing units than the standard. Generally, though, they rented units that were larger than those rented by civilians with age and education levels similar to military personnel.
  • The BAH rate for military personnel was typically higher than what similar civilians paid for rent and utilities. For example, the BAH rate for E-5 personnel with dependents for a given geographic area was about 47 percent higher, on average, than the median rents paid by civilians with similar age and education profiles. The difference narrowed to about 20 percent for civilians with income similar to that of E-5s. There was considerable variation in the size of that gap across areas with similar BAH rates.

Download the document here.

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