The Department of Defense has released the 2023 Basic Allowance for Housing rates. Basic Allowance for Housing rates will increase an average of 12.1 percent when the new rates take effect on January 1, 2023. An estimated $26.8 billion will be paid to approximately one million Service members. The significant increase in average BAH rates is reflective of the unique market conditions experienced across many locations nationwide over the past year. While average BAH rates increased substantially, different rental markets experience different market trends, and the 2023 BAH rates reflect those geographic market condition differences.
The temporary automatic BAH rate increases DoD authorized effective October 1, 2022 for 28 military housing areas across the country will expire on December 31, 2022 and will be replaced by 2023 BAH rates. There are only marginal changes between the automatically increased rates and the 2023 rates (most rates are unchanged).
The Department collects rental housing cost data annually for approximately 300 military housing areas in the United States, including Alaska and Hawaii. The Basic Allowance for Housing rate-setting process relies on a wide variety of data sources (e.g., U.S. Census Bureau survey data, Bureau of Labor Statistics Consumer Price Index, commercial subscription rental cost databases, industry-leading online rental listing websites, and input from the Services and local military installation housing offices, among other sources) to obtain high-quality, accurate, current-year housing cost data.
Median current market rent and average utilities (including electricity, heat, and water/sewer) comprise the total housing cost for each military housing area and are included in the Basic Allowance for Housing computation. Total housing costs are determined for six housing profiles (based on dwelling type and number of bedrooms) in each military housing area. Basic Allowance for Housing rates are then calculated for each pay grade, both with and without dependents, based