Living on Post

Has it changed for the better?

By Melissa Meinzer

Living on post, like living anywhere, has plenty of advantages and plenty of disadvantages. Two-thirds of military families choose to apply their basic allowance for housing (BAH) to housing off post.

But for those of us who choose to live in military housing, there have been changes that we’ve noticed and felt over the past dozen years or so as housing has been turned over to private management companies.

Some spouses love the changes, others don’t. For instance, Navy wife Rebecca Duncan, who has lived on post for 10 duty stations, says she feels the personal touch and unity that she felt when housing was government-run is missing. But Army wife Maggie Konopa, who lived at Fort Leavenworth for stints before and after privatization, said she saw tremendous improvements in the new houses.

Getting experts on the job
In 1996, the Department of Defense established the Military Housing Privatization Initiative (MHPI). This took the job of being landlords out of the government’s hands after they realized they weren’t doing such a great job of it. Realty companies competed for contracts, and now almost all the military’s on-post housing — about 90 percent of it, moving towards full privatization — is run by companies like Picerne, Balfour Beatty, Lincoln, Hunt and others.

“Housing was privatized in the first place because two-thirds of the housing inventory that the government owned was in inadequate condition. It was run-down and needed work,” explains Bob Helwig, Deputy Director of the Office of the Secretary of Defense, Housing and Competitive Sourcing. “We were never going to get the money to bring it up to snuff. We were falling behind every year. The reason was to be able to tap private capital and private experts. It was seen as elevating the quality of life.”

How it works
The companies own the housing and have free 50-year leases on the government-owned land they sit on. They collect rent, in the form of your service member’s housing allowance. Most of the housing was in fairly bad shape, so the companies are renovating a lot of it, and demolishing and rebuilding a lot of it. They finance the homes privately — that is, not with taxpayer money that requires Congressional approval — and the government is a junior partner in the corporations, which primarily means they can help get good rates for loans.

“We’ve been doing it for a long time so we’ve got property management expertise,” says Bill Mulvey, vice president of communications for Picerne Military Housing. Mulvey and his family lived on post for all 30 years of his active duty career.  

“We’ve also got a steady flow of cash, which [the military] didn’t have,” he says. “When their housing needed new roofs, they had to go to Congress. They very often didn’t get the funds for repairs or they didn’t get as much as they needed. We get the housing allowance, which stays right there at the post.”

The government says that occupancy rates need to be at 90 percent, but they aren’t the ones who sanction the companies if they fall short. It’s the private creditors the companies have loans from who will come calling. That means the companies have to provide good enough service to make money to pay their own bills — if residents aren’t happy and they move into town, the companies are on the hook financially.

If occupancy falls too low, the companies have plans in place, like opening the housing to federal civilians or military retirees until they fill up. Helwig can recall only one instance of a private company failing to maintain occupancy. That company ended up selling their interest in the development to another company, which returned occupancy to suitable levels.

The Takeaway
Privatized military housing, says Helwig, “can largely be viewed as a success.” Almost all military housing is in private hands now, and private companies have to compete for your BAH dollars.

“Tenant satisfaction is key, but the key indication of tenant satisfaction is ‘do the units stay occupied?’” says Helwig. “The military no longer mandates that the tenant live in the house.”

If you do live in on-post housing, says Mulvey, make sure you fill out tenant surveys and meet the housing folks who are flipping the burgers at community events. You’re their customer, and they have to listen to you, if they want to stay in business.