Basic Allowance for Housing rates will increase an average of 0.7 percent when the new rates take effect on January 1, 2018. An estimated $21 billion will be paid to approximately one million service members.
Based on the authority provided in the FY 2016 National Defense Authorization Act, the cost-sharing element (out-of-pocket expense) has increased to four percent for 2018. In layman's terms, a typical service member will absorb four percent of the national average housing cost by pay grade.
Even with the increase in cost sharing, BAH rates will increase (on average) approximately $10 per month.
A typical mid-grade enlisted member with dependents, for example, will find his/her BAH about $19 per month higher than last year, while a typical junior officer without dependents will find his/her BAH about $16 higher than last year.
Housing cost data are collected annually for more than 300 military housing areas in the United States, including Alaska and Hawaii.
An important part of the Basic Allowance for Housing process is the cooperation the Services and local military housing offices in the data collection effort. Input from local commands is used to determine in what neighborhoods data is collected and to direct the data collection effort towards adequate apartment complexes and individual housing units.
Median current market rent and average utilities (including electricity, heat, and water/sewer) comprise the total housing cost for each military housing area and are included in the Basic Allowance for Housing computation. Total housing costs are developed for six housing profiles (based on dwelling type and number of bedrooms) in each military housing area. Basic Allowance for Housing rates then calculated for each pay grade, both with and without dependents.
An integral part of the Basic Allowance for Housing program is the provision of individual rate protection to all members. No matter what happens to measured housing costs – including the out-of-pocket cost-sharing adjustment, an individual member who maintains uninterrupted Basic Allowance for Housing eligibility in a given location will not see his/her Basic Allowance for Housing rate decrease. This ensures that members who have made long-term commitments in the form of a lease or contract are not penalized if the area's housing costs decrease.