Evaluation of Basic Allowance for Housing

This is a report for the 14th Quadrennial Review of Military Compensation (QRMC) on the Basic Allowance for Housing (BAH). Specifically, this report responds to BAH-related questions posed by Congress in the 2023 National Defense Authorization Act (NDAA).

The NDAA asks that DOD evaluate the following six issues:

1. The efficiency and accuracy of the current system used to calculate BAH
2. The appropriateness of using mean and median housing costs in such calculations
3. Existing military housing areas (MHAs) in relation to choices in, and the availability of, housing to servicemembers
4. The suitability of the six standard housing profiles in relation to the average family sizes of servicemembers, disaggregated by uniformed service, rank, and MHA
5. The flexibility of BAH to respond to changes in real estate markets
6. Residential real estate processes to determine rental rates

The NDAA also calls for the Department of Defense (DOD) to provide recommendations on the following five topics:

1. The feasibility of including information, furnished by federal entities, regarding school districts in calculating BAH
2. Whether to calculate BAH more frequently, including in response to a sudden change in the housing market
3. Whether to enter into an agreement with a covered entity to compile data and develop an enterprise-grade, objective, and data-driven algorithm to calculate BAH
4. Whether to publish the methods used by the Secretary of Defense to calculate BAH on a publicly accessible website of the DOD
5. Whether BAH calculations appropriately account for increased housing costs associated with Coast Guard facilities