Jan 1, 1999
Family housing provides members of the military a significant benefit. It is an expensive one — costing about $10 billion annually — and will likely become even more so as aging sets of quarters are renovated or replaced at an estimated cost of $20 billion. A number of studies of Department of Defense (DoD) housing have been conducted in a search for more cost-effective ways to provide this benefit, but typically these have focused on comparing the relative costs of providing housing with the allowances given to those who live off-base. In An Evaluation of Housing Options for Military Families, the National Defense Research Institute (NDRI) focuses on those who use the housing — the service members and their families.
Service members perceive government housing as a substantial economic benefit. This perception explains why most installations have waiting lists for housing. These lists can be long, resulting in delays as long as two years. The preference for military housing is driven by the "benefit gap" between the military housing benefit and the allowance provided for those living in the civilian economy. For example, the value of military housing is about 40 percent greater than the allowance for junior enlisted personnel with families ($519 monthly allowance compared with a $735 monthly value). Military housing becomes less valuable relative to the allowance for higher enlisted and officer ranks.
The difference is also reflected in out-of-pocket costs. Those living in government housing pay neither rent nor utilities; instead, they forfeit their housing allowances. However, the allowances given to those who occupy civilian housing typically do not cover all the costs associated with living off-base, and those who do must pay the additional costs out of their own pockets. The size of the out-of-pocket payment varies depending on several factors, but surveys conducted for this study show that extra costs range from $167 per month for renters to $356 per month for those buying homes. Given that the median annual income for the families in this survey was $20,000, these expenditures are significant. Individuals living in government housing have no out-of-pocket costs.
Service members want to live on-base because they believe doing so saves them money. The figure shows the factors that those surveyed saw as first or second most important. When those occupying government housing were asked why they chose to live there, they overwhelmingly (65 percent) answered that it made good economic sense. Other factors such as security and convenience ran a distant second. Interestingly, having military neighbors was not regarded as important. Conversely, those living in rented civilian quarters said they did so because they could not get into on-base housing. Over 70 percent of owners cited economic reasons for their choice, either because it was an investment or was simply a good economic decision.
Senior military officials have traditionally associated a number of benefits with living in government housing. It is thought to help introduce junior personnel into the military culture, promote military values, and foster a sense of community. It is also seen as facilitating support to families when the military member is deployed or simply gone a lot.
However, few members consider these benefits when making their housing choices. For example, members do not believe that military housing plays a critical role in supporting their families. Having military neighbors was the least frequently cited reason for living on post, and service members believe their families are equally well supported on- and off-base.
But many members do believe that military housing contributes to the well-being of families in general and to the military community. The key contribution was also economic — helping families make ends meet was regarded as important by almost all those surveyed, and 80 percent saw it as very important. Other contributions thought to be important are supporting families of deployed members, supporting families so that members can focus on their duties, helping junior enlisted members fit in, and making families feel part of the military. About half thought military housing maintains military values, although half thought it does not.
Comparing military with similar civilian families, the researchers found, not surprisingly, that more civilians own homes than do military members. Although ownership varies by income and education across both groups, home ownership is always greater among the civilian population. For example, among those in the same age groups with a high school diploma, 20 percent of the military own their current residences compared with 70 percent of the civilians. The gap narrows when comparing those with college degrees, 55 percent compared with just over 80 percent, but the civilian population retains an edge. However, when comparing the portion of income spent on rent, the differences between military and civilian families are negligible.
These findings have important implications for DoD housing policy. Because military members see few unique benefits to living on-base, spending $20 billion to renovate and replace government quarters may not make economic sense. Rather, DoD should encourage more members to live off-base. However, to convince service members to opt for civilian housing will require incentives, and the NDRI researchers suggest two.
First, DoD should make the value of off-base housing more comparable with that of on-base housing, especially for junior personnel. At least two ways exist to accomplish this. One possibility is that housing allowances could be increased to enable families to rent or buy housing that is equivalent to on-base quarters. The increased cost of the allowance could eventually be offset by the decreased cost of maintaining fewer sets of government quarters. A second possibility would be to charge for on-base utilities and use the revenue to increase housing allowances.
A second approach to incentives would be to enhance the programs that help military families find civilian housing. Relocating families place a high premium on convenience, and they would benefit from programs that quickly match them with acceptable civilian housing.