Military housing allowance and the rental market

Military housing allowance and the rental market

SCHOFIELD BARRACKS (HawaiiNewsNow) - Rental housing rates are on the rise in Hawaii.

Active duty military members can be somewhat insulated, given the Basic Allowance for Housing they receive. Depending on the pay grade and whether or not they have dependents, the monthly allotment is anywhere from $2,000 to more than $4,000 in Hawaii.

That's a lot of money, and some believe it's the cause of the increase, but one noted local economist disagrees.

"The fact of the matter is, we don't have enough housing," said Carl Bonham, Executive Director of the University of Hawaii Economic Research Organization, or UHERO. "People's incomes are rising, the population is growing. It puts upward pressure on goods that you're not producing."

The army also says it's not responsible. It actually says it doesn't set the rate for the BAH, the market does.

"We do a market analysis of the rental properties in the local area, we submit those, and a third party contractor also submits properties to get what the BAH needs to be calculated at," said Joey Sanchez, Housing Division Chief at Schofield Barracks.

Bonham says even if there were no military or BAH, the vacuum would be filled because the market isn't in equilibrium: A shortage of housing supply is not meeting the demand. While the influx of military does create competition with civilians for available rentals, focusing simply on the BAH is inaccurate.

"Housing prices, rents, TOD, transportation, they're all intimately related and when you slice it up and just look at one piece at a time, you don't get the whole story."

Additionally, the military's presence leads to positive impacts on the economy as well.

"They're creating a demand for local services, whether it's housing services, food services ...And that's a good thing!" said Bonham.

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