The Department of Defense released the 2008 basic allowance for housing (BAH) rates today. In total, the planned increase in housing allowance funds for 2008 is about $600 million above the 2007 amount.
Military members will receive an average housing allowance increase of 7.3 percent when the new rates take effect Jan. 1, 2008.
Three components are included in the BAH computation:
Median current market rent
Average utilities (including electricity, heat, and water/sewer)
Average renter's insurance
Total housing costs are calculated for six housing profiles (based on dwelling type and number of bedrooms) in each military housing areas. BAH rates are then calculated for each pay grade, both with and without dependents. An estimated $17.5 billion will be paid to over 1,200,000 service members in 2008.
For members with dependents, average increases in the BAH are approximately $83 per month. A typical E-4 with dependents, for example, will find his/her BAH about $63 per month higher than last year, while an E-8 with dependents will receive about $79 more than last year.
An integral part of the BAH program is the provision of individual rate protection to all members. No matter what happens to measured housing costs, an individual member in a given location will never see his/her BAH rate decrease. This assures 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.