A resolution seeking congressional help for a solution to Guam’s housing crisis was introduced on Tuesday by Sen. William Parkinson.
Parkinson is urging Congress and specifically the Department of Defense to transition Guam to the Basic Allowance for Housing, or BAH, system, which applies to the states, instead of the current Overseas Housing Allowance, or OHA.
Parkinson blames the OHA system for putting housing costs beyond the reach of many working families on Guam. But his Resolution 117-38 states that under BAH, service members would receive a flat housing allowance based on local rental rates and would keep any leftover funds if they find more affordable housing.
“That encourages real bargaining and helps keep landlords honest,” Parkinson said.
He cites data from a 2013 report conducted by the Center for Naval Analyses, which found that Guam’s rental market is significantly distorted by OHA, which reimburses rent dollar-for-dollar, up to a high cap based on servicemember rank.
“Landlords legally engage in pricing discrimination, charging different rents for identical units depending on the tenant’s OHA level,” Parkinson said. “There is no incentive for service members to negotiate for cheaper rent, since they do not benefit from any savings.”
Parkinson said the current policy has led to a two-tier market in which service members with federally backed subsidies are bidding up rents, while local families are left to compete in an inflated market without similar support. “This is just bad economics, and it’s unjust,” he said.
The resolution cites as an example a rental unit that may rent for $1,250 to civilians often rents for more than $2,450 to service members whose rates are tied to OHA ceilings.
It also warns that the change is needed ahead of an even greater housing demand expected from the Marine relocation to Guam in the next few years, which will further strain Guam’s already limited housing supply.
According to the resolution, Congress has already acknowledged the need to examine the transition from OHA to BAH in U.S. territories in the National Defense Authorization Act for fiscal year 2020.