New Year Brings Higher Housing Allowance to Most Recipients

By Fred W. Baker III
American Forces Press Service

Dec. 12, 2007 - Most servicemembers receiving a housing allowance will see more in their 2008 paychecks. The average increase more than doubled for 2008 at 7.3 percent over last year's 3.5 percent average increase.

The Defense Department will pump an additional $600 million into the housing allowance program, for a total of $17.5 billion for 2008. This is paid out to 1.2 million servicemembers receiving the allowance.

Overall, members with dependents will see an average increase of $83 a month, according to a Defense Department release. An E-4 with dependents will see about a $63-per-month increase, while an E-8 will pocket about $79 more.

Not all rates saw increases, though. Rates are based on average current rent, utilities and renter insurance by market. In markets where those costs decreased, allowances went down accordingly. But a DoD rate-protection feature locks in rates for servicemembers already living in an area to protect their current rental leases. The cost of buying a home is not included in the data.

Officials collect data on 369 military housing areas in the United States, including Hawaii and Alaska. They then calculate 48 different rates per area based on pay grade and dependant status, to come up with more than 17,000 different rates. Of those, just under 12 percent of the allowance rates saw a decrease, according to officials.

Not surprisingly, cities in California, New York and Hawaii took most spots on the top 10 highest allowance rates in the United States. San Francisco saw the top rates for allowances with dependents at an average of $2,853 monthly.

Military housing allowances have come under heavy scrutiny by Congress and senior department officials since the 1980s and have increased historically since 2000.

In 2005, housing rate increases represented a final phase of a DoD plan to eliminate servicemembers' out-of-pocket housing expenses. Out-of-pocket expenses were estimated at nearly 20 percent in 2000, according to DoD releases.

"It's come a long way. It just gets better and better every year. The members are seeing increases in most locations every year, so the program is doing what it's supposed to do," said Susan Brumbaugh, director of the Basic Allowance for Housing, Per Diem, Travel and Transportation Allowance Committee.