By Marguerite Cleveland
The Department of Defense (DoD) recently announced the 2021 Basic Allowance for Housing (BAH) rates. The new BAH rates go into effect on January 1, 2021 and will increase an average of 2.9 percent. If you are receiving the GI Bill Monthly Housing Allowance (MHA) which is the same as BAH for an E-5 with dependents and based on the school zip code your rate will increase on August 1, 2021, the start of the academic year.
This is part of a robust military compensation package, but service members will incur out-of-pocket expenses at five percent of the national average housing cost by pay grade. For 2021 that amount should range from $70 to $158 a month based on grade and dependency status. The DoD considers the overall military pay and benefits package to be competitive even with out-of-pocket expenses.
Depending on your area your BAH will either go up or down. A question many people have is what happens if my BAH goes down? Basically, nothing due to the individual rate protection provision which is an important part of the BAH program. If you maintain uninterrupted BAH eligibility at a set location, you will not see your rate decrease. If you have a lease or long-term commitment you aren’t penalized if housing costs decrease in your area. If you PCS and then return to the area later, you will receive the BAH in effect at that time.
So how does the DoD determine BAH rates. Each year they collect housing cost data for 300 military housing areas in the United States including Alaska and Hawaii. The branches of the military as well as local housing offices assisted in the data collection effort. In addition, local commands provide information on which neighborhoods provide adequate and safe apartments and houses available for rent.
Then it gets more complex as the median current market rent and averages for electricity, heat, and water/sewer are factored in to make up the total housing cost for an area. Then there are six different housing profiles which are based on the type of home and number of bedrooms for each military housing area. Then the BAH rates are calculated for each pay grade with and without dependents.
What are the highest and lowest BAH rates around the country? Check out this chart from Military Benefits.
2021 BAH Rates by The Numbers
Areas with 10 Highest BAH Rates*
- San Francisco, CA (MHA: CA019)
- Santa Clara County, CA (MHA: CA044)
- Westchester County, NY (MHA: NY349)
- Long Island, NY (MHA: NY218)
- Nantucket, MA (MHA: MA119)
- New York City, NY (MHA: NY219)
- Marin/Sonoma, CA (MHA: CA027)
- Boston, MA (MHA: MA120)
- Oakland, CA (MHA: CA018)
- Florida Keys, FL (MHA: FL069)
Areas with 10 Lowest BAH Rates*
- Terre Haute, IN (MHA: IN338)
- Fort Leonard Wood, MO (MHA: MO163)
- Youngstown, OH (MHA: OH233)
- Anniston/Fort McClelland, AL (MHA: AL001)
- Charleston, WV (MHA: WV323)
- Sault Ste Marie, MI (MHA: MI145)
- Saginaw, MI (MHA: MI156)
- Fort Chaffee/Fort Smith, AR (MHA: AR012)
- Saint Joseph, MO (MHA: MO344)
- Fort Still/Lawton, OK (MHA: OK237)
*Average across pay grades. Individual pay grades by area may rank lower or higher.