R 251800Z OCT 22
MARADMIN 565/22
MSGID/GENADMIN/CMC WASHINGTON DC MRA MP//
SUBJ/CLARIFICATION OF THE BASIC ALLOWANCE FOR HOUSING (BAH) ENTITLEMENT// 
REF/A/DOC/OUSD(P&R)/202201//
AMPN/REF A IS THE 2022 BASIC ALLOWANCE FOR HOUSING (BAH) PRIMER.//
POC/C. V. GRUBB/CIV/MPO/EMAIL: MPO@USMC.MIL/TEL: DSN 278-9386//
GENTEXT/REMARKS/1.  Purpose.  To clarify the basic allowance for housing (BAH) entitlement and methodology for conducting the annual BAH rate determination.
2.  Background.  One of the most common misconceptions regarding BAH is that it is intended to cover all of a service member’s housing costs.  The intent of this Marine Administrative Message (MARADMIN) is to provide service members with a basic overview of the BAH entitlement in addition to providing online resources which are available to service members who desire a more in-depth explanation of BAH allowances and the methodology in their determination.    
    a.  Per the reference, the purpose of the Basic Allowance for Housing (BAH) program is to offset private sector housing costs for service members living off-base on the local market economy.  Accordingly, private sector rental housing costs are the basis for determining BAH rates.  When government quarters are unavailable, BAH rates serve as an equitable allowance helping service members afford adequate rental housing near their duty location.  BAH rates are based exclusively on rental markets and utility costs, not home purchase markets.  Service members are free to use BAH for mortgage payments or other housing expenses.  The actual out-of-pocket expense for an individual member may be higher or lower than the typical, based upon his/her actual choice of housing.  For example, if a service member chooses a bigger or more costly residence than the median, he or she will have larger out-of-pocket expenses.  The opposite is true if a service member chooses to occupy a smaller or less costly residence.
    b.  BAH rates are on based on the typical private sector housing costs near the service member’s duty location.  Once the duty station is known, the BAH rate is fixed, regardless of where the member lives.  An individual service member’s BAH allowance is determined based upon geographic duty location, pay grade, and dependency status (whether or not a member has at least one dependent of the member).  While BAH distinguishes between with-dependent and without-dependent status, the with-dependent BAH rate is determined based on the costs of adequate housing for civilians with comparable income levels who reside in the same geographical area of the service member.  BAH rates do not increase with increases in the number of dependents.
    c.  BAH Total Housing Costs (THC) increased significantly from 2021 to 2023.  Historically, average BAH THC changes vary between 3-4% per year.  In 2022, BAH rates increased by 5-6%.
    d.  THCs are the direct result of the annual BAH data collection process plus average utilities calculated from the American Community Survey (ACS).
3.  Approach.  BAH rates are calculated each year using median market rents and average local utility expenditures (electricity, water/sewer, and heating (fuel)) for civilians in each local rental market area.  The data collection period occurs between February and August each calendar year.  As a result, BAH rates may fluctuate up or down corresponding to the annual changes in these costs.  However, upon a service member’s arrival at a new duty station the service member’s BAH eligibility status will remain unchanged because individual rate protection prevents a member from receiving a lower BAH rate than the previous year.  For example, a service member is entitled to the BAH rates published on 1 January 2023 or the amount of BAH they were in receipt of on 31 December 2022, whichever is the larger amount.
    a.  Annually, the Office of the Secretary Defense (OSD), the Services, and the BAH data collection contractor spend significant time and resources to design, refine, and implement the BAH data collection process for each of the 300 Military Housing Areas (MHAs).  This ensures the resulting data is appropriate, statistically valid, and accurate.  
    b.  The BAH program increased the Calendar Year (CY) 2023 BAH rate sample sizes dramatically and are significantly larger than any previous BAH data collection review. However, some MHAs simply do not have enough available rental housing from which to collect a statistically significant sample size.  In these cases where increasing sample size is not a possibility, the Department uses housing costs trends from surrounding anchor points to estimate the housing costs for MHAs with low sample sizes and thus bolster the data collected in the sample.
4.  For additional reading on BAH, please review the following websites:
https:(slash)(slash)media.defense.gov/2022/Jun/23/2003023204/-1/-1/0/BAH-PRIMER.  PDF; https:(slash)(slash)www.defensetravel.dod.mil/site/bah.cfm; https:(slash)(slash)comptroller.defense.gov/Portals/45/documents/fmr/Volume_07a.  pdf, and https:(slash)(slash)uscode.house.gov/.
5.  This MARADMIN will remain in effect until superseded or canceled, whichever occurs first.  This MARADMIN is applicable to the Marine Corps Total Force.
6.  Release authorized by SES, Michael R. Melillo, Deputy Director, Manpower Plans & Policy Division.//