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                         February 1, 2002

More installations to privatize housing

By Irene Brown
Editor

Eight more Army installations will soon begin the process of privatizing their family housing.

Those installations are: Fort Hamilton, N.Y.; Forts Belvoir, Monroe, Eustis and Story, Va.; Fort Detrick, Md.; Picatinny Arsenal, N.J.; and Walter Reed Army Medical Center, Washington, D.C., said Geoffrey Prosch, principal deputy to the assistant secretary of the Army for Installations and Environment, during an RCI industry forum in Baltimore Jan. 18.

"Privatization of Army family housing is an essential element in solving our significant family housing problem," Prosch said. "In addition to the Army’s four successful Residential Communities Initiative pilot projects at Forts Carson (Colo.), Hood (Texas), Lewis (Wash.) and Meade (Md.), 23 additional projects in the United States are planned between 2002 and 2005. This will result in the privatization of (more than) 71,000 family housing units."

The U.S. Military Academy has no plans to privatize housing in the immediate future, said Walter Perez, Chief of the Department of Housing and Public Works’ Housing Division.

"The current push from DA is to have all housing revitalized by FY07 vice FY10, but our master plan still pushes it out to FY09," Perez said.

Two years ago West Point received approval -- and approximately $6 million per year in funding -- from the Army to go forward with its housing revitalization program as part of the Army Family Housing Construction Program for FY01-FY14.

"USMA was successful in getting its housing revitalization program approved through 2009," Perez said. "That means all West Point housing should be in great shape at that point."

But all installations are not as fortunate as West Point and adequate housing continues to be a problem for soldiers and their families. That is why more and more installations are looking toward privatization, said Maj. Gen. Robert VanAntwerp, assistant chief of staff for Installation Management.

"There are two main Army family housing problems today -- not enough consistent funding to renovate and maintain thousands of aging quarters and too many long waiting lists of soldiers wanting to live on post," VanAntwerp said.

Current Army estimates show the housing revitalization backlog at about $6 billion with about 70 percent of all Army housing needing renovation or replacement.

"Take a look at Fort Lewis where the average age of a set of quarters is 42 years old," Van Antwerp said. "Then take into account an annual housing budget for renovation and maintenance that varies by hundreds of millions of dollars from year to year. The RCI will help the Army get out of the housing business while providing quality quarters to our soldiers and their families."

Originating from the 1996 Defense Authorization Bill, RCI allows the services to partner with the private sector to improve military housing by jointly developing plans to provide housing and service facilities such as pools, parks and playgrounds.

In most cases, an installation’s family housing will be conveyed to a developer with a long-term land lease in return for an agreement to renovate/replace existing quarters and build new units as needed. The developer will also be responsible for operating and maintaining the housing units for the term of the lease. The developer’s return on investment will be the soldier tenants’ Basic Housing Allowance and a high occupancy rate.

"One of the most attractive features of this initiative for developers is that it brings in a constant revenue stream they can count on," said Ted Lipham, the Army’s RCI program director. "Look at the private sector residential community where occupancy rates are cyclic. Another thing they can count on is the BAH rate escalating as time goes by."