The housing sales and rental markets across Northwest Florida are affected by the Basic Allowance for Housing available to service members, and by the privatized on-base housing now available to military personnel and their families.
FORT WALTON BEACH — The thousands of military personnel and their families who call Northwest Florida home — for a couple of years, at least — can take advantage of a housing allowance that currently covers 95 percent of their housing costs. But that money doesn't necessarily push other people out of the housing market, even though it likely is a factor in setting housing prices.
Compared to much of the rest of Florida, the Panhandle is a relatively affordable housing market, according to Lawrence Yun, chief economist with the National Association of Realtors, a real estate trade association. "The Panhandle is more affordable, compared to, say, Naples, Sarasota or Miami," Yun said. "So the housing allowance that a military family may be getting is not necessarily pushing out other local residents."
Data from the 2019 State of the Nation's Housing report from Harvard University's Joint Center for Housing Studies makes Yun's point. According to the report, in the Crestview-Fort Walton Beach-Destin community, where the median household income for homeowners is $74,303, 82.6 percent of homes are deemed to be affordable. The percentage is somewhat lower when rental households and homeowner households are combined, yielding a $59,619 median income, which makes slightly more than 70 percent of the housing stock affordable to those combined households.
However, the local housing situation does become problematic when only rental households are considered. According to the Harvard University data, the median income for renters in the area is $39,424, meaning that less than half of local housing stock — 47.5 percent — is within their reach.
And, beyond Yun's view, an unanticipated pressure on the local housing market arrived when Hurricane Michael roared ashore almost a year ago as a Category 5 storm, devastating a wide swath of the eastern Panhandle and all but destroying Tyndall Air Force Base and Panama City.
Beginning shortly after the hurricane and continuing for several months, the centerpiece F-22 fighter jet mission at Tyndall was transferred to Eglin Air Force Base. Now, as a matter of necessity in some cases, and convenience in others, hundreds of Tyndall airmen — with families, in many cases — are living in the areas immediately surrounding Eglin, according to a Tyndall spokesman.
"Many members of the 325th (Fighter Wing, the host unit at Tyndall AFB) have set up residence in the Eglin area to continue the F-22 mission," spokesman Don Arias said. "Some of those relocated members have jobs that have returned to Tyndall, but they maintain their residence in the Eglin area for family reasons (such as children being enrolled in local schools) and commute to Tyndall."
Additionally, while some of Tyndall's single airmen are back on the base living in repaired dormitories, there is a long way to go before all of Tyndall's dorms are habitable, according to Arias.
"Several of our dorms were badly damaged by the hurricane," Arias said. "Out of 11 dorms, Tyndall has three that are back in service with a fourth dorm that is awaiting furniture that will come online soon."
"By the numbers, our staff is back to 85%," said Col. Brian Laidlaw, commander of the 325th Fighter Wing. "We are flying more F-22s today per week than we were prior to the hurricane. We are getting the mission done."
Beyond the current local challenges with military housing, arranging for accommodations for military personnel across the military services has in recent years represented a broader challenge for the Department of Defense, with both on-base and off-base housing historically serving as parts of the mix of housing options.
According to a 2015 report from the U.S. Department of Housing and Urban Development's Office of Policy Development and Research, on-base housing was rapidly expanded in the 1950s and 1960s, but deteriorated in the intervening years as construction and upkeep lagged.
While Department of Defense policy calls for military installations to rely on private-sector housing in the local community as a primary source of family housing, Congress nonetheless in 1996 approved the Military Housing Privatization Initiative. Since then, each of the military services has established its own on-base housing privatization program.
Under MHPI, each service can use a number of strategies to provide privatized housing where it is deemed necessary. Those strategies can include selling or leasing military property to housing developers, investing public funds in private housing development or making loans or providing loan guarantees to private housing developers.
At Eglin, the 96th Test Wing — the installation's host unit — has 10 dormitories comprising 730 single-occupancy rooms. That number does not include other dorms on Eglin, including housing for the Army's 7th Special Forces Group (Airborne) at Camp Bull Simons near Crestview, the Army's 6th Ranger Training Battalion, the Naval School Explosive Ordnance Disposal, or the 33rd Fighter Wing's housing for F-35 fighter jet student pilots and maintenance personnel,
The current occupancy rate for Eglin's dorms is 96%, a couple of percentage points below the average 98% occupancy rate, according to the base's public affairs office.
Other housing at Eglin is operated by Corvias Military Living, a private Rhode Island-based military housing company. Eglin's partnership with Corvias includes the new construction of 747 homes comprising 237 single-family and 510 duplex homes, ranging from 1,600 square feet to 4,000 square feet.
Hurlburt Field, headquarters of Air Force Special Operations Command, has a mixture of dormitories and privatized housing. Hurlburt 10 dormitories comprise 963 rooms, slightly more than 95% of which were occupied as of July, according to information from the installation. The average occupancy rate for the dorms is 95%, base officials said.
Hurlburt, like Eglin, is a current example of the shift from military-provided housing to privately built and managed on-base housing. At Hurlburt, Corvias since 2013 has been in the process of demolishing homes built in the 1950s and replacing them with the more than 400 new homes. Larger than the homes they're replacing — ranging from 1,700 to 2,200 square feet, with two-, three- and four-bedroom plans, all with 2.5 bathrooms — they include new appliances, two-car garages and irrigation systems, and are designed for energy efficiency.
The housing replacement project is slated for completion by the end of 2021. Currently, 72 homes have been demolished and 235 homes have been built, according to Jen Tumminio, who handles public affairs for Corvias.
To cover their housing costs, military personnel have access to something called BAH (Basic Allowance for Housing), the amount of which is determined by duty location, pay grade and whether or not the service member has dependents. According to the DoD's Defense Travel Management Office, BAH rates are computed using current median market rents and average local expenditures on utilities in each local market, and will fluctuate as those costs change.
For the current calendar year, the BAH for the area stretching from Santa Rosa County through Bay County ranges generally from $1,100 to $1,300 for the lowest-ranking service members without dependents, and from $1,300 to $1,500 for the lowest-ranking service members with dependents. For high-ranking officers, the range extends from $1,500 to $1,900 without dependents, and from $1,900 to $2,600 with dependents. To find the BAH for a specific ZIP code, go online to https://www.defensetravel.dod.mil/site/bahCalc.cfm.
With regard to the rental market, at least, the BAH plays some role, albeit limited, in local housing costs, according to Bob Hudgens, who has owned Coastal Realty in Fort Walton Beach for 20 years.
"Yeah, it certainly has a factor in it," Hudgens said. "We're aware of what the BAH is." But, he added, "We don't price it (rental housing) based on that. We price our rentals based upon market conditions."
In general, according to Hudgens, the BAH reflects local market conditions.
"I think the BAH has kept up with what our market is around here," he said.
Hudgens also said the relatively new on-base housing at local bases hasn't had much of an impact on the off-base rental market.
"To us, we don't really feel it that much," he said. Locally, according to Hudgens, home rental costs can range from $1,200 monthly in the Crestview area to $1,600 monthly in Fort Walton Beach.
Yun, though, suspects the BAH could be a driving force in housing costs, one that brings some disadvantage to prospective renters or buyers who don't have access to the allowance.
"I think once people (selling or renting homes) know what the budget amount is for military families, what that maximum limit is, then the types of homes or types of rentals that are shown (to) ... people (looking to buy or rent a home) ... just stay within their price budget points.”
Beyond setting the Basic Allowance for Housing, the Department of Defense has a housing manual that, as updated late last year, notes that it is department policy to "(e)nsure that eligible personnel and their families have access to affordable, quality housing facilities ... generally reflecting contemporary community living standards."
The DoD has some specific standards for what constitutes "suitable housing," including that it "shall have room patterns, floor areas, and amenities that are consistent with housing in the market area." In addition, the DoD defines suitable housing as having a private entrance, at least one full bathroom, a kitchen equipped with range and refrigerator connections, and, if climate conditions dictate, permanently installed cooling and heating systems.
There also is another aspect of how military personnel — including veterans, in this case — can affect the housing market. They have the option of taking out a home loan partially guaranteed by the U.S. Department of Veterans Affairs. VA-guaranteed home loans can allow a home purchase with no down payment and without mortgage insurance.
According to a recent report from the Consumer Financial Protection Bureau covering the years 2005 to 2017, "the share of first-time homebuying servicemembers using VA mortgages increased from 30 percent before 2007 to 63 percent in 2009. ... In 2016, 78 percent of servicemember loans were VA loans."
The report also notes that the "median loan amount for first-time homebuying servicemembers with a VA loan increased ... from $156,000 in 2006 to $212,000 in 2016." According to Zillow, a real estate listings website, local median sales prices for homes currently sit at $198,100 in Bay County, $221,600 in Santa Rosa County, $226,000 in Okaloosa County and $387,200 in Walton County.
Offering an interesting aside to military housing discussions, retired Army Col. Paul Yingling — whose 28-year career included command of an artillery battalion and time on the faculty at West Point — recently argued on the website of the Association of the United States Army, a nonprofit educational and professional development association, that self-contained military installations, with housing, shopping, schools and hospitals all behind secured gates, actually are harmful to both to the military families who live "inside the wire," and the community "outside the wire."
There are some installations — those located overseas, or that have sensitive missions, or are located in remote areas — where a self-contained environment is necessary, Yingling concedes. But, he writes, life in such an environment can be harmfully insular, particularly for children.
"Children growing up on military bases are less likely than their civilian counterparts to know a family struggling to make rent since base housing is heavily subsidized," Yingling wrote.
And conversely, he said, people living in communities surrounding insular military facilities have "a distorted view of the reality that service members and their families experience. Children growing up with no exposure to military services are less likely than their military counterparts to know someone who has been wounded or killed in action."
"Reducing the gap between the military and American society is an important goal of public policy," Yingling concluded. "As a matter of public policy, military members should be integrated as much as possible into the communities they defend."