Rising real estate prices across the country will push the average Basic Allowance for Housing up a notch next year despite new rules that change the methodology for how the tax-free benefit is calculated.
Overall average BAH rates will tick up by 0.5 percent, or about $17 per month, a far smaller rise than last year's 5 percent increase. Individual rates for specific locations and paygrades are available here.
The comparatively small bump is due to two significant changes in the way the Pentagon calculates BAH, both measures that were designed to shave some costs savings from military compensation.
One, housing officials removed the small slice of the benefit intended to cover renters insurance, which typically accounted for about 1 percent of the overall BAH rates.
And two, Congress on Dec. 12 finalized an annual defense bill that shaved 1 percent from BAH, meaning the tax-free benefit is now intended to cover only 99 percent of estimated housing costs. Individual service members will be expected to pay the remaining 1 percent out of pocket.
Despite a change to the underlying methodology in the way the military housing allowance is calculated, many rates will nevertheless rise somewhat because the Pentagon's annual survey of housing costs showed that rental costs are moving upward.
No service members will see a year-over-year decrease in the real-dollar amount of their BAH because the Defense Department is again extending its rate-protection policy. That ensures that troops who enter into a long-term lease will not be penalized by falling housing prices or reduced benefits. Falling rates will only apply to service members moving into an area in 2015.
Scaling back the BAH rate to cover only 99 percent of housing costs marks the first reduction in the benefit in a generation. But it's a far smaller drop than the one the Pentagon requested in March when it sought to cut it to 95 percent.
And the benefit remains far higher than it was in the 1990s when it was calculated to cover only about 80 percent of housing costs.
For individuals, the rate changes will be modest. For example, an E-6 without dependents at Camp Pendleton, California, will see his or her BAH rate move from this year's monthly rate of $1,764 up $21 to a 2015 rate of $1,785
Or an O-3 with dependents at Fort Campbell, Kentucky, will see his or her BAH rate go from $1,746 per month to $1,830, an $84 rise.
Andrew Tilghman is the executive editor for Military Times. He is a former Military Times Pentagon reporter and served as a Middle East correspondent for the Stars and Stripes. Before covering the military, he worked as a reporter for the Houston Chronicle in Texas, the Albany Times Union in New York and The Associated Press in Milwaukee.
