No. BAH rates are designed to reflect the median housing costs facing civilians in the local housing market. This means that approximately 50% of the local population (including Service members) can be expected to rent above the median rent and 50% to rent below it. Members are free to economize (and save a portion of their BAH) by renting below the market median costs, or to upgrade (and pay out-of-pocket) by renting above the market costs. Member housing preference and choice do not affect BAH rates.

Yes. A legislative proposal approved for the Fiscal Year 2016 National Defense Authorization Act (NDAA) allows the Department to incorporate a BAH member cost-sharing element (out-of-pocket amount), not to exceed five percent of national average housing costs by grade. BAH rates are currently set such that members are expected to pay a small portion of median local housing expenses (equal to 5% of the national mean BAH rate for a member’s pay grade and dependency status).

Yes. An out-of-pocket amount was incorporated early in the BAH program to limit rates to a defined budget. These out-of-pocket costs were reduced from nearly 20% in 2000 to elimination in 2005. The Fiscal Year 2015 and 2016 NDAAs allowed for the reintroduction of a relatively small out-of-pocket expense (capped at a maximum of 5% of BAH).

The impact of the member cost sharing impact varies based on member housing choice. Members who rent a median-priced property are expected to pay a small amount above their monthly BAH rate. Members who choose to economize in their housing choices may have all their housing expenses covered by BAH. Some members, renting properties above the median price for the area, pay out-of-pocket expenses regardless of the member cost sharing amount.