The Military and the Housing Market

[mydogsarelazy]

A friend was telling me yesterday that charities are providing quite a bit of food for military families at Camp Pendleton. Apparently the cost of housing is one of the many factors causing extreme financial hardship for the families of those serving in Iraq.

Do any of you have information/anecdotes about how service families stationed in Southern California have been affected by the housing market?

JS

[tucker…]

The military receive a lot of donations of food. Especially bread. Gifts for Christmas turkeys etc donated food before the holidays is very normal…Some active duty personnel have too many kids and have to ask for assistance, this is normal too. There is a large number of housing for the military at camp Pendleton .the benefit of living on the base is free electric trash pick up and water.

[JES]

I was stationed at Pendleton for a number of years and have some insight that may be useful. The first way that the housing market is affecting military families is that most are entirely shut out of the market and cannot afford to buy a home here anymore. When I checked into the base in the late 90s many officers and quite a few middle to senior enlisted Marines owned homes. By 2003 homes were out of range for all but the most senior enlisted Marines with equity from prior purchases, and many junior officers that I knew decided not to buy because of high prices. Big mistake as prices boomed further – by 2005 prices were out of range for virtually all Marines regardless of rank.

These days military families checking into Pendleton do not even consider buying a home unless they have prior equity. This is not a huge chunk of the buyers out there. I have no idea what the stats say, but if I had to make a really uneduated guess I’d say that out of the 40,000 Marines at Pendleton, perhaps 300 would buy homes in any given year before 2003. Consider the whole county, including the Navy, and maybe the number was closer to 1,000 homes/year. Whatever it was, I bet it is now down by at least 90%.

Now, the cost of housing is different from the cost of living. The military provides housing pay and cost of living allowances and they are higher for Pendleton than other areas of the country. They are actually adjusted by zip code. It is still expensive here, but there is no reason a family who does not own a house should be suffering because of housing costs.

[MH]

I'm a Marine, so this is a bit of a sensitive (and controversal) issue.

The military pays a "Basic Allowance for Housing" which, unlike my early enlisted days, is now pretty well indexed to the real costs of RENTING in the geo-location.  Those who elect to buy (as we did), do so at their own risk – and its not terribly smart if you aren't sure you'll want to keep the house when you move (generally ~3 years) or that the market will be up enough to offset the transaction costs.  As costs have skyrocketed, BAH still does an okay job of paying rent for "appropriate housing" but won't cover most mortages.

As far as requiring charity… Honestly I think there's an awfull lot of personal choice here.  When I was a young private, no one was married or had kids.  Now, as a reasonably senior officer, about half of my first-term Marines are married and/or have kids.  A Marine is paid fine (obviously you could argue he deserves much more), but the pay scales are really designed to support the hardcharger living in the barracks and eating in the chow hall.  For him (or her) to try to support a very young (and consequently marginally employable) wife, generally on their first time away from home, with one or more children and little life experience is a real challenge. 

A former Commandant tried to establish a policy of not allowing marriages or dependents until reaching E-4 but was shot down immediately by Congress (et al).  God love 'em… but from the DoD level there's a big impact on readiness, volume at the hospitals and other family support services, and additional costs/allowances.   

[powayseller]

MH, are enlisted personnel having families at younger ages? I’ve been told that military wives usually don’t work, because someone has to be home to raise the kids and dad is gone so much, and second because of frequent moves. What kind of pay can they expect, and what is BAH for San Diego?

[PD]

BAH is based on rank. As you move up, you get more BAH. Our rent is about $600 more than we receive in BAH (plus the cost of electric/water/garbage/gas). The only people I know who are paying the same in rent as they are receiving in BAH have lived in their rental for many years and are still paying rent at old prices while their BAH has gone up.

[Anonymous]

You hit the nail on the head MH.

I was amazed when I heard about the food drive to feed military families. Military pay is good enough that you shouldn’t need handouts. It is the ignorant kids that get married as E-1s and don’t understand birth control that cause this problem. Also, the military pays a larger housing allowance for married soldiers than single so historically there was always some incentive for young soldiers to get married.

Looking on the current BAH policy, it has changed a lot in recent years, and is based more on actual rent in a certain local. The rate in San Diego right now is $750 to $1622 per month with dependents and $518 to $1311 for no dependents. Also this is tax free income.

[barnaby33]

I was in the reserves so never actually got BAH, but I remember two things. When I graduated from boot camp(Navy) at least 3 or 4 guys had their wives come to graduation. One of whom already had 3 kids. It was otherworldy to me.

My step-mothers first husband was a career marine. He got out as an E-9. What she told me was that at least early on the marine corps didn’t permit you to get married until you were at least an E-5. I wonder when that changed?

Josh

[SD Realtor]

“Military pay is good enough that you shouldn’t need handouts”

That may or may not be true however my wife and I feel pretty strongly about helping military families out. Rodger Hedgecock does alot of charity work for the military on AM 600 and we drove a truckload of baby supplies down there last week. I went to Venice High up in L.A. when I was a kid and while I had it pretty good, alot of my friends were from very poor neighborhoods in Culver City and Mar Vista. Not alot of them were great decision makers in life and for many of them the military was the best choice.

I think that the sacrifice military personnel have made for all of us is noteworthy to say the least. You do not have to agree or disagree with the policies of our government but like it or not, the military protects all of our well being and without a strong military this country and the world would be a very very different place… I believe for the worse.

I have many friends who have active duty servicemen and the stress on these families is gut wrenching. I think any help that our society can give these families is useful regardless of the good or bad decisions some of the service people have made regarding starting a family to soon or getting married to early.

[Author]

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