The military housing privatization initiative and the Defense Department's Military Family Housing Revitalization Plan

Abstract

Throughout our nation's history, the armed forces struggled to provide an adequate quantity and quality of living quarters for service members and their families because competing budget priorities continually overshadowed the need for more and better housing. The trend worsened during the 1990's, with traditional on base housing stocks deteriorating due to insufficient maintenance funding, inadequate new construction funding, and meager housing allowance increases. Supporting the continued and growing emphasis on the welfare of service families, Congress authorized the Military Housing Privatization Initiative (MHPI) in 1996 to take advantage of outsourcing opportunities and to quickly alleviate the housing problem. This thesis compares MHPI to the other two traditional family housing programs (MILCON and BAH) and analyzes many specific MHPI strengths and weakness. The research concludes that MHPI is a valuable and flexible tool for bridging the perpetual gap between the MILCON program (limited by congressional appropriations) and the housing allowance program (limited by local real estate markets). Since many long-term uncertainties exist regarding DoD's future housing needs and the resulting effect of the BAH rate increase initiative, this thesis recommends that MHPI be used only when MILCON and BAH can not meet housing needs. Additionally, it recommends that DoD not count on projected MHPI cost savings, which are unlikely to materialize; and t hat DoD use MHPI projects as an opportunity to increase utility conservation responsibilities for service families.