The Basic Allowance for Housing (BAH) rate will increase an average of $41 per month nationwide Jan. 1, even as the calculation used to determine it shrinks the amount of housing costs it is designed to cover.
BAH is recalculated annually using a snapshot of housing costs in each region. For 2017, the rate is designed to cover only 97 percent of troops' housing costs -- a one percent drop from last year and the third step in a congressional plan to reduce rates by five percent over five years. The rate also is no longer designed to cover the cost of rental insurance, a change that started in 2015.
The Basic Allowance for Subsistence (BAS) rate for 2017 remains unchanged from 2016 at $253.63 for officers and $368.29 for enlisted personnel. BAS is calculated based on the average price of food as measured by the U.S. Department of Agriculture.
BAH and BAS changes will be reflected in troops' Jan. 15 pay.
Troops in areas or paygrades set to receive a BAH rate increase will receive the new, higher rate beginning in January. Those who live in an area with a rate reduction for 2017 will be grandfathered into the old, higher rate until they leave the area or change rank. If they are promoted and their new rank receives a lower rate, they will continue to receive their old, higher rate.
Defense Department officials warn that in addition to the three percent out-of-pocket cost to troops, the rates are computed from local averages -- not actual costs.
"It is not intended to cover every member's total housing costs," officials warned in a fact sheet. "Some members at a location may incur out-of-pocket expenses based on their actual housing choices."
The almost 2,000 troops stationed in the Atlanta, Georgia, area will see the largest average increase in BAH for 2017 at 19 percent, or an increase from $1,374 for an E-4 with dependents to $1,641. Troops in Seattle will also see a major increase for their second year in a row. The average rate there will rise 13 percent for 2017, or an increase from $2,073 for an E-4 with dependents to $2,373.
Among those areas facing the largest rate drop is Fort Huachuca, Arizona, where the rate will decrease by an average of nine percent, or from $858 for an E-4 with dependents currently living there to $789 for those new to the region.
Minot, North Dakota, also will face a major drop this year, with an average rate decrease of 11 percent, or from $1,308 for an E-4 with dependents currently living there to $1,170 for new residents. Minot had been the recipient of an almost 41 percent BAH increase in 2012 when historic flooding combined with an oil boom caused a major housing shortage. Rates there have yet to return to their pre-shortage levels.
-- Amy Bushatz can be reached at email@example.com.