I am sure by now you have seen the charts with the NEW 2014 BAH Rates for the Naval Base Kitsap area.  Fairly depressing to say the least.  No increase for almost anyone!  Those of us here receiving BAH are lucky to be “grandfathered” into our current BAH allowance.  New military members coming into the are are in for a little surprise.  Bremerton was THE area with THE largest decrease in housing allowance for 2014.  Why?  Most of the headlines or snippets you read when you Google the term 2014 BAH rates shows that there was a 5% increase – largest in the last 5 years.  So why did the Naval Base Kitsap area take such a hit?  Here are some bullet points from the DOD -

• Each year BAH rates are reviewed and adjusted to account for fluctuations in rent, utilities and renter’s insurance in a given location. This routine rate adjustment happens each year.
• BAH is designed to assist service members assigned to permanent duty stations within the U.S. with acquiring housing comparable to civilians in the same income range, at that location.
• This year, BAH rates will increase an average of 5 percent when the new rates take effect on January 1, 2014. An estimated $20 billion will be paid to approximately one million Service Members in 2014.
• On average, BAH rates for members with dependents will increase approximately $79 per month and $76 for members without dependents. A typical mid-grade enlisted member with dependents, for example, will find his/her BAH about $79 per month higher than last year, while a typical junior officer without dependents will find his/her BAH about $76 higher than last year.
• BAH rates at about 20% of the Military Housing Areas (approximately 60 areas) will decrease in 2014 from 2013 rates.
• No matter what happens to housing costs, an individual member will not see his/her BAH rate decrease as long as they do not have a reduction in pay grade, change in dependency status, or permanent change of station. This is called rate protection, and is designed to ensure that members who have made long-term commitments in the form of a lease or contract are not penalized if the area’s housing costs decrease.
• Because BAH is computed from median rent and local averages, it is not intended to cover every member’s total housing cost, and some members at a location may incur out-of-pocket expenses based on their actual housing choices. – See more at: http://www.dodlive.mil/index.php/2013/12/dod-releases-2014-basic-allowance-for-housing-rates/#sthash.UN22kl62.dpuf

For my husbands rank this is a 5.72% decrease which really is almost a 10% decrease if the other 80% of the military members received a 5% increase.  What happened in our area to cause such a drop?  BAH is calculated on median rent rates and local averages, since I am in the business I am going to try and pull some figures.  I said “try” because rental rates are hard to get a hold of.  No consistent reporting like home sales. 

Here is an interesting article.  Guess we might have to wait until Sept of 2014 to see what the actual numbers are.  http://www.deptofnumbers.com/rent/washington/bremerton/

How does the DOD calculate the BAH – where do they get their numbers?  Off to look – and here is your answer folks.

11. What is the source of BAH rental data?

Current data is obtained from multiple sources, employing a “checks and balances” approach to ensure reliability and accuracy of data. Current residential vacancies, identified in local newspapers and real estate rental listings, are an important, but not our only, source of data. Vacancies are selected at random, and subjected to a multi-tiered screening process to ensure accuracy and reliability. Telephone interviews establish the availability and exact location of each residential unit sampled. The sample is designed to obtain a statistical confidence level of 95 percent or higher. Yellow page listings of apartments and real estate management companies are employed to identify units for rental pricing. It is also common to consult real estate professionals in a locality to obtain important confirmation and additional sources of data. When available, fort/post/base housing referral offices are contacted to tap local military expertise and gain insights into the local concerns of uniformed members. Finally, DoD and the Services conduct on-site evaluations at various locations to confirm and ensure reliability and accuracy of the cost data. Future enhancements include examining potential Internet uses as well as housing data available from other government agencies.

Yeah, there really is no way to dispute the findings.  Me, I don’t believe that rental rates have decreased 5% in our area.   If anything I think they have increased.  The demand for rental units is still high here with the housing bubble burst and the lack of military members now renting vs buying.  But, I will wait for the Sept figures to be released before becoming more vocal.