The 2017 BAH rates are out and ready to give you good, or maybe bad, news about next year. But first, let’s get one thing out of the way: as of 2017, Basic Allowance for Housing (BAH), is only really supposed to cover 97 percent of your housing costs. And there are plans to shrink it another two percent in the next couple years, until it only covers 95 percent.
But with that in mind, let’s be honest: does military BAH really cover 97 percent of your housing costs? We frequently hear from readers who are baffled by the way BAH is calculated because it doesn’t come near what they find their housing costs to be, especially in high-cost areas like San Diego, California or Washington, D.C.
I frequently find that this discrepancy is caused by families expecting BAH to cover a house size that it was not intended to match. When the DoD reexamines the rates for each pay grade every year, they make a bunch of assumptions about what kind and size of housing each pay grade requires. This is a great roll up of how the calculations are done.
For example, the rate for E-1 to E-4 is calculated as the halfway point between the cost of a two-bedroom apartment and two-bedroom townhouse. If you’re trying to make E-4 BAH cover a three bedroom, single family home, well, it probably isn’t going to cut it.
That leaves a lot of questions about whether or not the calculations for lower pay grades, in particular, should be more realistic and take into account larger families.
So tell us — do the 2017 BAH rates really cover 97 percent of your housing costs?