Military Advantage

BAH Rates Jump 40 Percent for Minot... But Why?

Guest Blogger: Amy Bushatz

“Why not Minot?” goes the slogan. And then comes the Airman’s answer: “the reason is it’s freezin’.”

The big shock to casual observers of the new 2012 BAH Rates released today is the new rate for the area surrounding Minot Air Force Base in North Dakota. While in the past the big winners of BAH increases have seen around a 15 percent bump in payout, a servicemember with dependents in Minot is slated to receive a whopping 40.5 percent average increase next year. The average with dependents BAH in Minot in 2011 was $1,448 – next year it will be $2,040.

Suddenly Minot isn’t looking so bad … sort of.

New BAH rates are based on a variety of cost of living factors collected by DoD. If housing prices in an area are impacted by supply and demand, that flux is captured in the new payout rate.

So what’s going on in Minot? We buzzed the Chamber of Commerce there to find out. The answer? Floods and oil.

Over the summer Minot experienced historic flooding as the Souris River left its banks and ultimately flooded-out 4,000 homes, at least 1,000 of which were owned by Airmen, said John MacMartin, president of the chamber. Although the flood ended months ago, most of those homes aren’t expected to be livable again until this coming spring. In the meantime those families are living in FEMA trailers, apartments or extended stay hotels.

Housing continues to be so tight, in fact, that an Air Force stop movement order issued this summer barring new personnel from relocating their families to the area is still in effect. An official at the Air Force base confirmed that some Airmen currently there who would normally not qualify for on base housing are being allowed to live in the barracks – sometimes doubled up in rooms – because they can’t find housing elsewhere.

And then there’s the oil boom. As the price of oil has continued to rise and previously untapped North Dakota resources are drilled, the area around Minot has seen an influx of oil company workers. Since Minot is the largest city in the area and has an airport, many of those workers choose to live there and take up any housing that would otherwise be extra, MacMartin said.

The result of the perfect storm of an economic boom during a natural disaster? A very tight housing market, skyrocketing housing prices and a 40.5 percent average increase for area BAH in 2012.

Welcome to Minot.

Read Tom Philpott's Military Update to learn more about the impact of the 2012 BAH rate changes.

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