Report: Higher housing allowances won’t help Defense retention

A Pentagon plan to make civilian housing more affordable for service members will have little effect on the military's retention problems, the General Accounting Office has concluded. By increasing housing allowances, the Defense Department plans to make civilian housing free for military personnel by 2005. At present, service members who live in civilian housing must pay $200 or more a month. Service members pay nothing to live in military housing. While hiking the housing allowance will drive more personnel into civilian housing, it is not likely to have a significant effect on the Pentagon's retention problems, GAO said in its report, "Military Personnel: Higher Allowances Should Increase Use of Civilian Housing, but Not Retention," (GAO-01-684). "DoD should not expect a substantial increase in personnel retention solely from its initiative to increase the housing allowance," GAO said. "This is not unexpected, since we previously testified that the retention decision is complicated, highly personal and usually a function of many factors." GAO based its findings on data from the 1999 Survey of Active Duty Personnel. Housing issues were the top factor in retention decisions for less than one percent of respondents, according to GAO. Since the housing allowance is a form of pay--the top issue driving retention in the 1999 survey--upping the allowance may have some effect on retention, GAO said. But because the Pentagon's retention problems are focused in certain occupations and career levels, an across-the-board allowance hike will not solve these problems, the report said. "Housing allowances and other across-the-board increases, do little to address specific retention problems," said GAO. The Defense Department agreed that raising allowances would create more demand for civilian housing, which is currently used by 619,000 service members, about half of the active-duty force. But the Pentagon disagreed with GAO's finding that increasing the allowance would not help retention, contending the allowance hike is a pay increase with no tax burden. "Because housing allowances are tax-free, we believe the retention effect of an increase in the housing allowance would be even greater than an identical pay raise," wrote Elliott Bloxom, acting deputy assistant secretary of defense for military personnel policy, in response to the report. On Wednesday, a panel commissioned by Defense Secretary Donald Rumsfeld pledged vast improvements in military housing and bases, stating the poor quality of military housing gives the impression that service members are not important. About one-quarter of the active-duty force, or 300,000 personnel, live in military housing, according to GAO. The remaining service members are deployed around the world.
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