What do I mean by privatization, I mean a bunch of for-profit companies essentially got the military to sign over ownership and management of all military housing.
This is what was quote intended:
Military Housing Privatization
Congress established the Military Housing Privatization Initiative (MHPI) in 1996 as a tool to help the military improve the quality of life for its service members by improving the condition of their housing. The MHPI was designed and developed to attract private sector financing, expertise and innovation to provide necessary housing faster and more efficiently than traditional Military Construction processes would allow. The Office of the Secretary of Defense has delegated to the Military Services the MHPI and they are authorized to enter into agreements with private developers selected in a competitive process to own, maintain and operate family housing via a fifty-year lease
The idea, like many "wonderful" business transformationalist ideas was that providing housing to soldiers, sailors, airmen and marines was not a core business practice. As such we could outsource it.
And save lots of money that could be used for things like littoral combat ships and F-35's. Yes these wonderful platforms were in concept mode in the late 90's. A by wonderful, there is a bit of sarcasm there.
To be clear, this is not a party problem. This was signed under a Bill Clinton. But has been allowed to fester presidents of both parties.
So essentially the military handed off responsibility and accountability to several of civilian corporations. Below list may not be up to date but there are apparently 19 different "landlords" running military housing.
Balfour Beatty Communities
Liberty Military Housing
Hunt Military Communities
Lendlease
Corvias
Again, the idea being that these civilian companies would be more agile, more responsive and more cost effective than if the miliary kept management of these assets in house.
this really didn't really take stewardship well
And this is just from a cursory web search, from what I have heard and seen, these are the ones where it got really bad.
So, the concept was to provide better admin, upgrades to existing military housing. And these companies hit a gold mine. Why would a company decide to take over aging military housing. Well in some ways it is the same reason that dealerships outside the front gate are willing to sell cars to E-1's. They are going to get paid. So my take on the why:
1. They had a guaranteed customer base. Whom always got paid. Oh, and the military essentially directly pays the company. So, the company never really has to collect any money, because it is guaranteed. And remember it is the servicemembers entire allowance for housing..more on why that is problematic later. So, let's pretend that a Sailor collects 3000.00 a month for all housing allowances. If that sailor goes out in town he or she might be able to find an apartment for say 2,500. Then the sailor gets ton use the remaining 500 for electric, water, trash and maybe Internet. However, if that same sailor goes to base housing then the whole 3000.00 goes to the "landlord". That means that the Sailor is out of pocket for electric (unless included), water, (unless included) and Internet. And in most cases electric, water and internet are not included. So essentially any sailor has a built in incentive to try and find somewhere else to live.
2. Two, there is little to no ability of a local base commander to hold these companies to account when things are not maintained. This was not a bug it is a feature. Can't have a U.S Navy Captain or Army Colonel ore senior enlisted getting involved in substandard conditions. Nope that is a big DOD as in Pentagon SECDEF issue. Not even services. Again, housing was not perceived as a core function of the military in those days. Might be offensive here, but there is no reason that providing housing to the Camp Followers (dependents) is important. Remember they would have been " issued with thgem with a seabag" if important. And I am guessing that some Senior Officers may have been happy to have this off their plate. Servicemembers could complain but it was no longer in unit or base leadership hands
As they could legitimately say that it's a "not my monkeys, not my football" issue. And with command tours only 2 years or so these landlords can wait them out.
3. Three, in many cases military members may not have many options in terms of housing that is affordable to them as many bases are in high-cost areas. So, call it a captive audience. Especially these days. I can almost promise that in most major metro areas, and many areas, if housing availability does exist it probably exceeds the housing allowance...again if available.
4. If occupancy falls below a certain rate the "landlords" can actually rent to civilians who may have little to no connection with the miliary or the base...more on why that is problematic. To be cynical, servicemembers know the quality of housing is bad or subpar, and that (see number 1) they are going to be out of pocket. Then if they can they are going out in town. So why is that important. Well remember the housing allowances for service members are capped at a certain amount. So again, use the 3,000.00 number. The "landlord" can't charge more than 3,000.00 to a servicemember in that situation. But they can charge above that to a civilian
The bottom line, like many "initiatives" between the mid 90's and 2010's is that there were many flawed assumptions baked into these concepts. The biggest one is that a corporation, as it was servicing military members would somehow be altruistic and always do the right thing.
I am a big fan of capitalism. But remember, the point of a corporation in capitalism is to make money for its shareholders. Thats it. People do not provide corporations capital out of the goodness of their hearts to support the military. They invest and thereby provide capital to these companies expecting a nice return on their investment.
To put this in a general context, imagine for a minute if the Navy was to decide that patrolling the sea-lanes was no longer a core function of the U.S Navy and that a corporation could do it better cheaper and faster. The same company in return might be able to say charge port entry fees or collect tolls at sea for protection. Meanwhile the U.S Navy might be free to just conduct strike operations. To undertake this outsourced mission the U.S Navy kindly provided a bunch of leased old Spruance Class Destroyers and Oliver Hazzard perry class Frigates (properly demilitarized). Hulls with decades of service. And also provided for funds to privately crew these ships.
Do you think there might be problems. Say for instance there might be a cost benefit calculation to say intercepting refugees or providing maritime security. Say perhaps an incident is reported 200 nautical miles away and it's going to cost X dollars in steaming costs but the reward is only going to be 1/2X.
In addition to keep manning costs down, salaries might be capped. Further, since the corporation is only leasing these old hulls, there is little incentive to maintain them, As in part of the agreement, if the old hulls fail, the company can build new ones with government backing at minimum costs. And when the new hulls come online they will maximize profits.
Perhaps a better analogy would be a sport team tanking (losing games on purpose or not trying) in order to get better draft picks.
To be clear, both the companies and DOD are complicit in the situation that developed.
Much like the analogy above the DOD and services offloaded a bunch of very old and not well-maintained housing stock to private companies. Even the DOD had not been good at husbanding the housing stock...much dating to the 60's and some the 20's. And to be clear, the respective services were much more interested in funding new tanks, ships and airplanes than keeping up or maintaining housing stocks.
The real problem was the built-in lack of oversight at the local level. As well as the willing blindness of congress (would love to see the lobbying history of these landlords to congress).
It was only when things got super bad in recent years that congress and DOD could no longer turn a blind eye. As servicemembers and their families got sick and had to go out of pocket to find new places to live. While some of these companies falsified repair records, or just slow rolled the servicemembers. Because remember, most military move every 2-3 years. So, they could wait them out like the Commanders. An some of the supervisors - or the companies - of these landlords got to collect bonuses.
I have outline the problem...So what is the solution.
The solution is not going to be cheap or quick. But it boils down to clawing back military housing. Placing accountability in the hands of the commander who's servicemembers live in housing.
In theory a company might be able to do a better job. But in reality, corporate self interest in money making is not going to deliver the quality of service required.
Conversely, when a Commander knows he or she is accountable for the conditions that their men and women and families live in that commander is going to take an interest. As his or her professional future will depend on it. In addition, if the Commander has the ability to influence repairs ect then he or she will likely do it When a commander has not accountability or responsibility and no means to influence and issue that is legally out of their hair nothing tends to get done until someone dies or its on 60 minutes or the local news.
So, I said it's going to be expensive. It will be. But it is an investment. In times when it is hard to get and retain people to serve in the military, do you think substandard housing is going to be large draw.
Do you think that the perspective spouse or current one is going to want their spouse/ partner to re-enlist or to extend knowing how their children will be raised?
The private military housing initiative has failed. It's not repairable. And like the littoral combat ships whose design, manning, maintenance and operations were predicated on transformational business ideas and outsourcing. It's time to decommission private military housing..
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