|FY 2003 Basic Allowance for Housing|
|Rates for Commissioned Officers with Dependents|
Below are the rates of tax-free housing allowance (Basic Allowance for Housing, or BAH) that are provided to commissioned officers (with dependents) who are authorized to reside off base at government expense.
For Fiscal Year 2003, housing rates increased by an average of 8 percent over 2002 rates. As a National Survey has shown that rental rates around military bases have risen an average of 4.2 percent during the past year, the average out-of-pocket housing expenses for military members will drop from 11.3 percent to 7.5 percent. This is part of a DOD plan to reduce average out-of-pocket expenses to zero by the year 2005. In 2000, average out-of-pocket costs were 20 percent, reduced to 15 percent with the raise for 2001, and 11.3 percent in 2002. Housing allowance rates are based upon rank, location, and whether or not a member has dependents.
The Department of Defense (DOD) employs Runzheimer International to collect the nation-wide housing cost data that they use to compute BAH. Additionally, DOD obtains current data from multiple sources, employing a "checks and balances" approach to ensure reliability and accuracy. Current residential vacancies, identified in local newspapers and real estate rental listings, are an important source of data. Vacancies are selected at random, and subjected to a screening process. Telephone interviews establish the availability and exact location of each unit sampled. DOD has designed the sample to obtain a statistical confidence level of 95% or higher. DOD also contacts apartment and real estate management companies to identify units for rental pricing. It is not uncommon for DOD to consult real estate professionals in a locality to obtain confirmation and additional sources of data. Where available, DOD contacts fort/post/base housing referral offices, to tap local military expertise and gain insights into the local concerns of military. Finally, DoD and the Services conduct on-site evaluations at various locations to confirm and ensure reliability and accuracy of the cost data.
Data courtesy of Department of Defense