Department Of Defense Family Housing Units

Examines policy options that would reduce the cost of DoD family housing in the U.S. while attempting to protect the quality of life now enjoyed by families of military personnel. Photos and graphs.

The Department of Defense (DOD) spends about $8 billion annually to provide housing for military members and their families either by paying cash allowances for members to live in private sector housing or by assigning members to military-owned or -leased quarters. Over the past several years, DOD has expressed concern over the poor quality of the military housing inventory and the need for renovations and improvements to bring the housing up to contemporary standards. To improve housing faster and more economically than could be achieved if only traditional military construction appropriations were used, the Congress approved DOD's request for a new initiative, known as the Military Housing Privatization initiative, that allows and encourages private sector financing, ownership, operation, and maintenance of military housing. Under the initiative, DOD can provide direct loans, loan guarantees, and other incentives to encourage private developers to construct and operate housing either on or off military installations. Because it represents a new approach to improving military housing, GAO reviewed the implementation of the new initiative to (1) measure progress to date, (2) assess issues associated with privatizing military housing, and (3) determine whether the new initiative is being integrated with other elements of DOD's housing program.

DoD estimates that about 200,000 military family housing (MFH) units are old, lack modern amenities, & require renovation or replacement. To improve MFH more economically & faster, Congress authorized a 5-year pilot program, termed the Military Housing Privatization Initiative (MHPI), to allow private sector financing, ownership, operation, & maintenance of military housing. This report reviews the implementation of the MHPI to determine the status of current & planned MFH privatization projects, examine the accuracy of life-cycle cost analyses for proposed projects, & asses progress toward integrating the initiative with other MFH programs. Charts & tables.

Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) methodology for determining whether build-to-lease and rental-guarantee housing projects are cost-effective when compared to traditional military housing, where the government builds and owns the housing project. GAO also determined the status of the 801 project, where the government leases a project from a private developer, and the 802 project, where the government guarantees up to 97-percent occupancy of privately owned rental housing. GAO found that: (1) the services have complied with the laws authorizing 801 and 802 projects; (2) it could not compare the quality of 801 and 802 housing projects with those built under traditional military construction due to the stage of the projects at the time of its review, the lack of comparable housing units, and the subjective nature of quality determinations; (3) DOD officials believe that the quality of 801 units would be equal to that of traditional military construction; however, 802 units would be adequate but not as good as 801 or traditional military housing units since less money is used to construct the 802 units; (4) although Congress received information showing that the 801 and 802 projects were less costly than the services' estimate, the information may not be an adequate basis for approving an 801 or 802 project, due to the uncertainty about the quality of leased housing and the maximum allowable cost that DOD sets to ensure that all successful 801 and 802 bids are less costly than the military construction alternative; and (5) more information is needed to determine whether leasing is more cost-effective than traditional military construction methods.