Some U.S. military personnel assigned to locations with tight rental markets can apply for increases to their Basic Allowance for Housing, the Pentagon announced Friday.
Troops in 56 geographic areas deemed by the Department of Defense as having rising rents and an inadequate supply of rental housing could be eligible for the boost, which will range from 10% to 20%, depending on location.
According to a news release issued Friday, affected troops will be notified via email "in the coming days," and the military branches each will release administrative messages containing details on how to apply.
The rate hike has been in the works for at least a month and could affect more than 200,000 service members.
According to the list published late Friday, five installations in rural or rapidly growing areas would see the largest boost, at 20%, including Twentynine Palms, California; Boise and Mountain Home Air Force Base, Idaho; Eglin Air Force Base, Florida; and Spokane, Washington.
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Eleven locations in California, Virginia, Texas, Florida and Montana would see a 15% increase, while 40 more scattered across the U.S. would see a 10% increase.
The rates will be in effect until next year's yet-to-be announced housing rates go into effect on Jan. 1, 2022, according to the release.
In a memo leaked to social media earlier this month but never confirmed by the Pentagon as authentic, DoD officials said the increase was necessary because the COVID-19 pandemic has "resulted in rental housing availability shortages in many military housing areas, resulting in significant increases in rental housing costs."
According to a spreadsheet posted last week by the Coast Guard, the estimated cost of the rate hike is $159 million.
The BAH increase applies to active-duty troops and full-time National Guard members of all paygrades and types of housing. Even if apartment costs in an area haven't risen by the designated percentage but single-family home costs exceed the percentage, all eligible personnel still would receive the set temporary increase.
In the release, Pentagon officials said that BAH rates for the affected areas in 2022 may differ from the temporary rates, increasing for some and decreasing for others based on market assessments.
BAH protection, which usually protects service members from seeing decreases in their housing allowance during an assignment, will not apply to the temporary increases, according to Pentagon officials.
"Members should not assume these rate increases will continue into 2022," DoD officials wrote in the release.
The increases likely will not be awarded to those living in military privatized housing, because they have not faced cost increases and pay rent to military property managers at prices set by the BAH rates.
While the sales market for houses showed signs of slowing at the end of the summer, an economist with the National Association of Realtors said earlier this month that demand for rent remains high across the U.S. -- particularly for multi-family housing such as apartments -- and should remain elevated for the next year.
In a blog post, research economist Gay Cororaton wrote that rent growth has surged and construction activity continues to be lower than it was before the pandemic, contributing to the shortage of rental properties.
"With home prices rising at double-digit pace and with some increase in mortgage rates in the offing, there is still pressure to rent than to own," Cororaton wrote.
-- Patricia Kime can be reached at Patricia.Kime@Monster.com. Follow her on Twitter @patriciakime.
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