Service members will see relief from high housing costs in 2023 thanks to a proposed Defense Department increase in the basic allowance for housing (BAH) next year. The 2023 defense budget calls for a 4.2 percent increase in BAH rates next year.
However, not all service members will see the same increase in housing allowance. BAH rates vary based on pay grade, military housing areas, and dependency status. If you’re confused, don’t worry. This guide will cover everything you need to know about 2023 BAH rates.
What is the Basic Allowance for Housing (BAH)?
The basic allowance for housing (BAH) is a subsidy the military offers service members who do not live in government quarters. BAH covers 95 percent of housing expenses, and the military member must pay the remaining 5 percent out of pocket.
In addition to the basic allowance for housing, there are BAH sub-types:
- Partial BAH: Some service members without dependents living in government-provided housing may receive a partial BAH payment.
- BAH Type II: If you are in the National Guard or Reserves and are activated for fewer than 30 days, you may receive a special housing allowance that is fixed based on national averages and doesn’t vary by location. This also applies to military members transitioning from a duty station with no prior BAH rate.
- BAH Differential: If a military member is stationed alone without their family but must pay to support their dependents. (Note: If your child support payment is lower than the BHA-Diff amount, you aren’t eligible for BAH-Diff payments.)
- Overseas Housing Allowance: This is technically not a form of BAH, but it’s similar. This allowance applies to active duty military members stationed overseas.
How Is the BAH Rate Set?
The federal government surveys the constantly changing housing costs, including rent and utilities, in 300 civilian rental markets and adjusts the BAH accordingly. The Department of Defense applies a different rate for each military housing area (MHA).
Will You Be Affected?
Though the 2023 BAH rates for all service members will average around 4.2 percent, some will see a greater boost next year than others. In some cases, the BAH rate may remain the same.
The basic allowance for housing provided to each individual service member is based on three factors:
- Pay grade: The higher your rank, the more money you receive for housing expenses.
- Dependency status: Service members with minor children and other dependents receive more BAH pay.
- Military housing area: The military sets higher BAH rates for areas with higher average housing costs
Will Your BAH Go Down?
A policy known as BAH Rate Protection prevents you from losing your basic allowance for housing due to a change in BAH rates in your military housing area. Your BAH rate will only go down under the following circumstances:
- Demotion: If you are demoted to a lower pay grade, you will receive the BAH rate for your new pay grade. However, if the rate has been lowered at your station at the time of your demotion, you will continue to receive the high protected BAH rate under your previous pay grade.
- Change in Dependency Status: Those with dependents will receive the same BAH pay regardless of the number of dependents. Your BAH will only change if you stop having dependents altogether. For example, if you have one child who ages out of dependency, your BAH pay will go down.
- Permanent Change of Station: Your BAH pay may go down if you are permanently reassigned to a duty station in a military housing area with a lower BAH rate. This doesn’t apply if your new station is within commuting distance of your current residence.
Automatic Increases in Certain Areas Before 2023
In response to skyrocketing rent, the Department of Defense approved temporary BAH rate increases in 28 military housing areas starting in October 2022:
- Vandenberg AFB, CA
- Twenty Nine Palms MCB, CA
- San Diego, CA
- Dover AFB/ Rehoboth, DE
- Patrick AFB, FL
- Miami/Fort Lauderdale, FL
- Orlando, FL
- West Palm Beach, FL
- Volusia County, FL
- Fort Myers Beach, FL
- Kings Bay/Brunswick, GA
- Maui County, HI
- Chicago, IL
- Boston, MA
- Cape Cod – Plymouth, MA
- Martha’s Vineyard, MA
- Brunswick, ME
- Coastal Maine, ME
- Fort Leonard Wood, MO
- Helena, MT
- Wilmington, NC
- Northern New Jersey, NJ
- Newport, RI
- Providence, RI
- Beaufort/Parris Island, SC
- Knoxville, TN
- Houston, TX
- Quantico/Woodbridge, VA
Historical BAH Rates
Though the proposed BAH rate for 2023 is 4.2 percent, that figure will likely change in the final department of the defense budget. Changes in the housing market forecast may prompt lawmakers to revise the allowance downward.
When the defense budget was drafted earlier this year, home and rental prices were projected to rise. However, analysts are now singing a different tune. Many traditionally hot housing markets on the coast are expected to cool significantly, which could mean a lower BAH increase than the current rate for some.
Usually, the official BAH rates are within 1 or 2 percent of the rate proposed in the draft budget. To give you an idea of the variation between proposed and actual BAH rates, here is a list of military housing rates for the past 10 years:
|Year||Proposed Increase/Decrease||Actual Increase|
|2021||2.90% – 3.70%||2.90%|
You can consult the Defense Travel Management Office for the most up-to-date information on current BAH rates. If you live in one of the above-mentioned MHAs eligible to receive BAH increases under the temporary BAH rate adjustment, you can use their built-in tool to calculate your expected benefit.
Simply enter the zip code of your duty location and pay grade to calculate your BAH rate.
The cost of housing in the United States varies greatly from location to location. The basic allowance for housing (BAH) is one way the military ensures fair pay for its members and families regardless of where they live. If you’re a military member living outside government housing, you are likely eligible for BAH payments.
The proposed 2023 allowance for housing is 4.2 percent, but this may be increased or decreased. Once the defense budget is finalized, the new rate will go into effect in January 2023. Visit the official DoD website for the most up-to-date information.