BAH to Rise In Some Locations, Fall in Others – VA Benefits Blog

BAH to Rise In Some Locations, Fall in Others

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by Levi Newman on December 27, 2011

 

According to new data from the Department of Defense data, Basic Allowance for Housing rates will rise 2 percent on average next year across the nation, but rates will drop slightly in about one-third of U.S. locations.

When rates go up, all service members in a given location get the increase. When rates dip, the military’s “individual rate protection” policy ensures that troops already settled in a location will not see their BAH decrease for as long as they remain in that location, assuming no change in dependency status or a reduction in pay grade.

Thus, any lowered rates will only affect those troops who move into a new area next year, assuring those that who signed long-term leases are not penalized if housing costs in their area fall.

The largest drops came in parts of California, including the area around Fort Irwin in Barstow, Calif., where rates will dip 8.5 percent in 2012. Ventura, Calif., and Los Angeles also will see significant drops of 7.4 and 5.8 percent, respectively.

Rates increased most in the area surrounding Minot Air Force Base, N.D., where the monthly stipend will spike 40 percent. Rates in the Washington, D.C., metro area, home to more than 43,000 service members, will also see a sharp rise, up nearly 10 percent from 2011.

The Defense Department will pay out a total of about $20 billion in BAH, an increase from last year’s total of about $19 billion. More than 1 million troops receive BAH to cover the cost of housing off-post or rent in privatized housing complexes on military installations.

Median rental costs, average utility costs and renter’s insurance rates are factors in the complex formula officials use to determine BAH rates. The Pentagon analyzes data annually for 365 U.S. housing markets, including Alaska and Hawaii.

You can find your 2012 BAH rates by clicking here.

 

Photo thanks to james.thompson under creative commons license on Flickr.

 

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