Over many years, government-owned military housing had deteriorated to the point it was affecting the quality of life for service members and their families. By 1996, more than 60 percent of the military housing inventory needed to be renovated or replaced. Traditional methods to revitalize the housing would have cost over $30 billion and taken 30 to 40 years. Congress provided new authorities to use private sector expertise and capital to accelerate improvements to the housing inventory and help provide quality affordable housing. Using these privatization authorities, DOD has developed projects that provide higher quality on and off base housing faster and at less cost than traditional methods.
DOD has now awarded 30 projects and has over 60,000 privatized housing units and expects to have 136,000 units by the end of FY 2005. The project team has developed agreements that protect the government interest but maintain private sector control and management. The military culture has changed to allow control of base housing to be ceded to the private sector. The project has provided housing worth $6.2 billion while using only $550 million in appropriated construction funds. To further support the success of the initiative, quality of life surveys have shown the military families to be overwhelmingly positive about their revitalized homes.
Before projects are approved, a comprehensive analysis is conducted to determine how many military families can be housed in the local community. Projects leverage government assets and transfer existing housing and land to the private sector to offset the need for government cash subsidies. Housing units are built to private market standards and, if there is a time in the future when they are not needed for military families, the developer will be able to rent them to the public. A reinvestment account captures excess revenues for future recapitalization.
For more information, contact Mr. Joseph K. Sikes at (703) 607-3207 or via e-mail at joseph.sikes@osd.mil
