Thoughts on Privatized Housing

By Del Eulberg, Major General (Ret.), USAF

Taking care of our people has always been a top priority of the military services. Every successful nation, throughout history, has understood the need to invest in the profession of arms in order to protect its national security and economic well-being. Our most valuable resource in the defense of our nation is the individual soldier, sailor, airman, marine, and coast guardsman. As such, we have an obligation to ensure they have the best leadership, training, and equipment. We also know our men and women in uniform are most productive in executing their given missions when their families are taken care of—which is why quality housing is so important. In my 35 years in uniform,

In the mid-1990s, a significant percentage of our military family
housing units were “inadequate.” Not only were our homes inadequate and beneath contemporary standards, most of the housing on military bases did not meet building codes. Most of these homes were built in the 1950s and 1960s and had very little, if any, investments in either maintenance or capital upgrades. The military budgets were not keeping our men and women in uniform and their families in homes they deserved. In the budget debates within the Pentagon, the White House and Congress never achieved the investment necessary to upgrade our military family housing. Congress provided new authorities for the military services in 1996 with housing privatization, which fundamentally changed the paradigm in how we deliver and manage military family housing.

The military services all took advantage of this legislation, and I know the Coast Guard is working very hard to open that door to tackle its significant housing challenges. Each branch of service implemented the authorities in its own way. However, everyone agrees that privatization delivers housing faster than traditional military construction, at a lower cost and at a higher standard. The average development period for privatization to build/renovate our homes at our installations is approximately five years, sometimes faster. Privatized housing is also typically larger, with more bedrooms and garages than historically provided under “normal” military construction. In addition, the new developments also include amenities such as play areas, pools, community centers, and jogging paths.

These partnerships attract the best financial firms, developers, and property management firms in the country and the results speak volumes. The new paradigm allowed the military services to partner with the private sector in a new way, which allowed us to unleash the capital that existed at our military installation. Last time I checked, for every taxpayer dollar, we’re getting $15 of private equity invested in our military family housing. In business, you’d call this leverage; in the military services, it’s a force multiplier.

Any effort of this magnitude has challenges. Like the old saying goes, “Nothing worthwhile is ever easy and nothing easy is ever worthwhile.” Our professional housing staffs had to adapt and learn new skills. We’ve had to learn how to make long-term business deals, something with which we had little experience. We’ve also had to work through changes with senior military leaders who, in turn, have been forced to adjust to a new housing management system. And lastly, the financial and housing markets in the past few years have certainly challenged all of us and required us to revalidate long-held assumptions as we plan these initiatives at our installations, etc. We have tackled all of these challenges as a team because we all know how important our mission is.
In the end, our individual service members remain the foundation of our military capabilities. We owe them, and their families, the absolute best possible training, equipment, and living conditions we can afford. Housing privatization has proven to be a valuable tool in meeting that objective.

God bless you and your families for serving others.