Examines policy options that would reduce the cost of DoD family housing in the U.S. while attempting to protect the quality of life now enjoyed by families of military personnel. Photos and graphs.

The Department of Defense (DOD) spends about $8 billion annually to provide housing for military members and their families either by paying cash allowances for members to live in private sector housing or by assigning members to military-owned or -leased quarters. Over the past several years, DOD has expressed concern over the poor quality of the military housing inventory and the need for renovations and improvements to bring the housing up to contemporary standards. To improve housing faster and more economically than could be achieved if only traditional military construction appropriations were used, the Congress approved DOD's request for a new initiative, known as the Military Housing Privatization initiative, that allows and encourages private sector financing, ownership, operation, and maintenance of military housing. Under the initiative, DOD can provide direct loans, loan guarantees, and other incentives to encourage private developers to construct and operate housing either on or off military installations. Because it represents a new approach to improving military housing, GAO reviewed the implementation of the new initiative to (1) measure progress to date, (2) assess issues associated with privatizing military housing, and (3) determine whether the new initiative is being integrated with other elements of DOD's housing program.

DoD estimates that about 200,000 military family housing (MFH) units are old, lack modern amenities, & require renovation or replacement. To improve MFH more economically & faster, Congress authorized a 5-year pilot program, termed the Military Housing Privatization Initiative (MHPI), to allow private sector financing, ownership, operation, & maintenance of military housing. This report reviews the implementation of the MHPI to determine the status of current & planned MFH privatization projects, examine the accuracy of life-cycle cost analyses for proposed projects, & asses progress toward integrating the initiative with other MFH programs. Charts & tables.