The Department of Defense has released the 2023 Basic Allowance for Housing rates. Basic Allowance for Housing rates will increase an average of 12.1 percent when the new rates take effect on January 1, 2023. An estimated $26.8 billion will be paid to approximately one million Service members. The significant increase in average BAH rates is reflective of the unique market conditions experienced across many locations nationwide over the past year. While average BAH rates increased substantially, different rental markets experience different market trends, and the 2023 BAH rates reflect those geographic market condition differences.
The temporary automatic BAH rate increases DoD authorized effective October 1, 2022 for 28 military housing areas across the country will expire on December 31, 2022 and will be replaced by 2023 BAH rates. There are only marginal changes between the automatically increased rates and the 2023 rates (most rates are unchanged).
The Department collects rental housing cost data annually for approximately 300 military housing areas in the United States, including Alaska and Hawaii. The Basic Allowance for Housing rate-setting process relies on a wide variety of data sources (e.g., U.S. Census Bureau survey data, Bureau of Labor Statistics Consumer Price Index, commercial subscription rental cost databases, industry-leading online rental listing websites, and input from the Services and local military installation housing offices, among other sources) to obtain high-quality, accurate, current-year housing cost data.
Median current market rent and average utilities (including electricity, heat, and water/sewer) comprise the total housing cost for each military housing area and are included in the Basic Allowance for Housing computation. Total housing costs are determined for six housing profiles (based on dwelling type and number of bedrooms) in each military housing area. Basic Allowance for Housing rates are then calculated for each pay grade, both with and without dependents, based on the housing choices of civilians with comparable incomes to each Service member pay grade grouping.
The 2023 Basic Allowance for Housing rates, as part of a robust military compensation package, continue the member cost-sharing element at five percent of the national average housing cost by pay grade. These amounts vary by grade and dependency status and range from $82 to $184 monthly for the 2023 rates. Even with this cost-sharing element, the overall military pay and benefits package remains competitive and healthy.
An integral part of the Basic Allowance for Housing program is the provision of individual rate protection to all members. No matter what happens to measured housing costs – including the out-of-pocket expense adjustment – an individual member who maintains uninterrupted Basic Allowance for Housing eligibility in a given location will not see his/her Basic Allowance for Housing rate decrease. This ensures 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.
The Department is committed to the preservation of a compensation and benefit structure that provides members with an adequate standard of living to sustain a trained, experienced, and ready force now and in the future.
For more information on the Basic Allowance for Housing, including the 2023 Basic Allowance for Housing rates and 2023 Basic Allowance for Housing rate component breakdown, visit https://www.travel.dod.mil/Allowances/Basic-Allowance-for-Housing/. Service members can calculate their BAH payment by using the Basic Allowance for Housing calculator at: https://www.travel.dod.mil/Allowances/Basic-Allowance-for-Housing/BAH-Rate-Lookup/.