The average amount of housing subsidies that the Defense Ministry will provide to the military in 2022 increases significantly compared to previous years.
The Pentagon says the average increase in the Basic Shelter Allowance (BAH) will rise 5.1%, a significant jump from the past two years, which averaged just below 3%. The DoD will spend $ 25.6 billion in BAH for 2022.
Depending on rank and dependency status, the military will see BAH increase from a range of $ 74 to $ 168. The allowances will not decrease.
“The department is committed to preserving a compensation and benefits structure that provides members with an adequate standard of living to maintain a trained, experienced and ready force now and into the future,” the DoD wrote in a statement. press release Wednesday.
It is important to note that the increase in BAH is only an average. Some service members may not see the full 5.1% increase; others might see allowances even higher than that.
“The department annually collects rental housing cost data for approximately 300 military housing areas in the United States, including Alaska and Hawaii,” the release said. “Current market average rent and average utilities (including electricity, heat and water / sewerage) include the total cost of housing for each military housing area and are included in the BAH calculation. Total housing costs are developed for six housing profiles (based on housing type and number of rooms) in each military housing area. BAH rates are then calculated for each pay level, with and without dependents. “
Part of the reason for the sharp increase in the BAH may be due to the fact that house and rental prices have increased in 2021 and 2020.
According to Red tuna, a real estate brokerage firm, the median selling price of a home increased 13.2% when comparing regulations from October 2020 to October 2021. Selling prices increased 14% from October 2019 to October 2020.
Meanwhile, the number of homes for sale is down nearly 18%, and 44.3% of homes sold above their listing price.
The housing market became so competitive last year that the DoD temporarily increased the BAH in 56 areas for the last quarter of the year.
“Rental housing market data collected by the Department of Defense from March to August 2021 indicates that the COVID-19 pandemic has had a significant impact on rental housing costs in the 56 affected markets. In particular, the low availability and turnover of rental housing stock during the spring and summer months has resulted in increased rental costs in many locations, ”a DoD statement said in September.
The BAH 2022 rate replaces these temporary increases.
Some of the areas where selling prices are rising the fastest, according to Redfin, are the cities of Florida and Arizona, as well as Detroit. The army has several bases in all of these regions.
Lawmakers recently had concerns about BAH. The Defense Authorization Act 2022 requires a report from the DoD indicating whether BAH is sufficient for an average military family.