Navy signs largest public-private housing partnership
Under the initiative, more than $600 million will be invested in upgrading or replacing homes for sailors and their families.
The Navy recently agreed to privatize more than 5,000 family houses on seven naval installations under the sea service's largest housing initiative to date.
"Navy family housing privatization initiatives have proven to be very successful and are an important tool in the Navy's efforts to put quality homes in the hands of sailors faster," said Navy Rear Adm. Jeffrey B. Cassias, commander of the Naval Facilities Engineering Command's Northeast Region.
All of the military services are privatizing family housing on bases as part of an effort to upgrade quality of life for service members. Congress recently increased service spending caps on housing privatization from $850 million to $1.3 billion.
Under the Navy's latest deal, the service will form a public-private partnership with GMH Military Housing of Newtown Square, Pa., that calls for the company to invest more than $600 million in upgrading or replacing 2,400 homes over the next six years. The new homes will range from single-family to townhomes and duplexes.
The Navy has used public-private partnership as a way to jump-start construction of new housing. The private company borrows money to upgrade and build. and then agrees to manage and maintain the property for 50 years. In return, the Navy has military members sign a lease with the developer for the value of the member's basic housing allowances, which covers rent, utilities and renter insurance. Developers like the deal because they have a steady income stream for five decades.
All told, GMH Military Housing-Navy Northeast will manage 5,600 Navy units in Rhode Island, New York, New Jersey, Connecticut and Maine.