Saturday, May 24, 2008

2008 Basic Allowance for Housing Rates Forthcoming

It's that time of year again! No, not the holiday season, but the month or so where military personnel and their families are anxiously tapping their toes waiting for the release of the next year's housing allowance figures. According to the Pentagon site, the 2008 BAH figures will be available in "mid-December." Historical data suggests this will probably be December 14 or December 17.
I suspect in many areas of the country, BAH rates will either level off or drop. There seems to have been a huge increase in BAH rates nationwide in 2005, and in many areas that appears to have been too much, such that rates have either flattened or fallen in the past two years. The trend will probably continue.
BAH rates are determined by an annual survey of properties in a given military housing area, and by determining the median housing costs (rent, utilities, and renters insurance) for servicemembers based on the type of housing they *should* have based on their paygrade and family size. Basically that means more modest housing for junior enlisted and more substantial housing for senior enlisted and officers, as well as more substantial housing for servicemembers with dependents. A single E3 has more modest housing needs than an E7 with a wife and three children.
What happens if you live in an area where the BAH rates will drop from 2007 to 2008? You will be covered by "rate protection." Rate protection means you will receive the higher of the BAH you are entitled to on January 1, 2008, or the BAH you were entitled to on December 31, 2007. In other words, if you see that your BAH is expected to drop $200 per month between 2007 and 2008, provided you don't lose BAH eligibility for some reason, you will keep seeing the 2007 rate. However, if you move into the area from another duty station, you will receive the new (and lower) BAH rate. If the BAH annual survey has done its job properly, though, you shouldn't be paying too much out of pocket for housing expenses.

No comments: