Military Housing Funding Essential for Military Readiness and Retention

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Posted: Mar 18, 2022

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Military Housing Funding Essential for Military Readiness and Retention

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Public-private partnerships (P3s) have allowed communities across Texas to meet necessary demands for updated infrastructure. In addition to providing affordable housing solutions and addressing student housing needs in Texas, over the past 23-years P3s have played a significant role in the overhaul and improvement of on-base housing on military installations across the state. Access to quality housing for service members not only positively impacts state and local economies, but also results in improved military recruitment, retention and readiness.

In the early 1990s, the Department of Defense struggled with retention, recruitment and readiness issues related to less than desirable housing for military personnel and their families. Faced with the overwhelming need for funding, including $16 billion in backlogged deferred maintenance, Congress authorized the Military Housing Privatization Initiative (MHPI) in 1996. This unique P3 model was designed to alleviate the shortage of quality, affordable housing by facilitating construction of new communities and renovating existing DoD homes and neighborhoods with amenities such as walking and biking trails, community centers and playgrounds.

Comprehensive financial structures with 50-year projections were established to address the specific housing challenges on each U.S. military installation. These plans relied on full financing from service members’ Basic Allowance for Housing (BAH), which are allotted to cover their housing costs. For the first time since the 1970s, military housing underwent extensive renovations. Service members and their families now have access to housing and community amenities that were previously unavailable on-base, including energy efficient appliances, garages and spacious floor plans.

Under MHPI, families benefit from the ongoing commitment of private companies working together with their military partners to ensure safe,  improved living conditions. If a concern does arise, the teams work together to resolve the situation as quickly and effectively as possible.

Although MHPI is one of the most successful P3s to date, with 15,227 homes for service members and their families stationed across 13 military installations in Texas, funding for maintaining and increasing housing developments isoften scrutinized by the Congressional Budget Office (CBO) and public policy groups. 

In the FY15 National Defense Authorization Act (NDAA), Congress implemented a reversal to its initial funding agreement for MHPI, reducing the BAH percentage a military member could receive by 1 percent per year (for a total of a 5% reduction). While this annual reduction may seem relatively small, in reality it had a dramatic negative effect on the standard of life for those living on military installations.

As a result of this BAH decrease, MHPI partners were directed by the DoD to reduce services being provided to the service members and their families, community amenities, and planned renovations. at each military housing community.

Congress restored full funding for BAH for service members living in MHPI housing to address reports of housing quality concerns in the FY19 NDAA. However, this policy was not a permanent funding commitment. Recently the CBO recommended decreasing BAH allocation to 80 percent of rental cost to assist with reducing the nation’s budget.

Meaningful change, which members of Congress have recently promised, must include proper funding to address years of underfunding to ensure our service members continue to have the best on-base housing possible. Without that commitment, military readiness will decrease.

The success of MHPI proves that P3s have the ability to sustain high-quality military housing and serve as the foremost case study for leveraging private sector funding. It has resulted in an improved standard of living for service members and their families, and better recruiting, retention, and readiness for service branches. It would be sensible for Congress, and this administration, to recognize that policy shifts are more than a simple percentage change on paper – they are a direct hit to service members and their families.

By Sinclair Cooper, President of the Public Infrastructure Development Division of Hunt Companies, Inc. With more than 30 years of experience, Mr. Cooper is responsible for the development of institutional public-private partnership opportunities throughout the United States and is an executive leader of Hunt’s Military Housing Privatization Initiative.

Send comments/inquiries to Hunt Military Communities’ Vice President of Corporate Communications
([email protected])

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