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Top military brass have told Congress that the grim housing conditions on military bases are not getting much better despite repeated congressional demands for action.
Senators who serve on the U.S. Armed Services Committee have called the newest reports of poor construction and shoddy repairs a “national crisis” and “alarming,” with some calling for criminal investigations of the for-profit housing providers.
Some military housing for service members and their families is “obviously … non-habitable,” said U.S. Sen. Mazie Hirono of Hawaii at a Senate Armed Services Committee hearing in Washington last week. She urged the heads of the military branches to prosecute housing executives who are hiding repair problems rather than fixing them for residents.
A report by the U.S. Government Accountability Office, released last week, found that customer satisfaction information provided to the federal government by the firms has been misleading, unreliable and incomplete, allowing them to pocket incentive fees they don’t deserve.
In Hawaii, about 17,000 homes on military bases have been turned over to the control of private companies, according to the Department of Defense.
About 40% of service members live in base housing in Hawaii compared to about one-third nationwide, because of the high cost of housing in the state.
Two large firms share the military housing market in Hawaii, Australia-based Lendlease, operating as Island Palm Communities, and Hunt Military Communities, a privately-owned Texas firm that operates as Ohana Military Communities.
Members and their families in Hawaii have reported a litany of unsafe and unsanitary conditions in their homes, including dead rats, black mold, lead-based paint, sewage backups and prolonged water shutoffs.
Military housing was privatized starting in 1996, when control of more than 200,000 homes on military bases was transferred to about a dozen large real estate companies to manage as for-profit ventures. The military refers to these firms as their housing “partners.”
In the Senate hearing last week, the secretaries of the Army, Navy, Air Force and Marine Corps said improvements are being made at a steady but slow pace, and that they are becoming increasingly aware of the magnitude of the problem.
According to Ryan McCarthy, secretary of the Army, about one-third of 86,000 privatized Army homes are in such poor condition that they need to be completely rebuilt.
About 14% of service members living in privatized housing on Air Force bases, some 6,475 families, expressed concern about their “life, health or safety” as a result of living in substandard housing, said Barbara Barrett, secretary of the Air Force.
Concern about the issue is bipartisan. Sen. Jim Inhofe, a Republican from Oklahoma who chairs the Armed Services Committee, called the situation “a national crisis.” Ranking member Sen. Jack Reed of Rhode Island, a Democrat, said it was “alarming.”
The senators were also told that the problems may be difficult to solve because the 50-year contracts signed by the 14 for-profit companies that provide the housing today were designed to ensure a good return for the companies but do not require the homes to be kept in good repair.
At the hearing, Hirono asked whether the metrics that determined whether the partner firms receive incentive fees or not require that the homes be habitable.
“We found they were overwhelmingly more focused on the financial health of the project and the partner as opposed to the quality or condition of the home and holding the partner accountable for that,” said Elizabeth Field, the GAO’s director of defense capabilities and management.
The contracts “were not written in such a way that we can hold the partners accountable,” Field said.
U.S. Sen. Richard Blumenthal, a Democrat from Connecticut who was formerly that state’s attorney general, said he was “deeply disappointed” that none of the for-profit housing firms had been referred for criminal prosecution, given allegations that some firms falsified repair records.
Field, the GAO official, said that the companies collected incentive fees by misleadingly reporting an 87% overall satisfaction rate by residents. She said the questions appeared to have been designed to elicit positive responses, such as “Would you recommend this community to others?”
Sen. Tim Kaine, a Democrat of Virginia, said that satisfaction rate was included in a report to Congress.
“I feel lied to,” he said.
Several senators asked who was responsible for obligating the federal government to contracts that favor the companies over the service members.
“It is the service secretaries who signed the agreements with the companies,” Field said. “I would say the service secretaries are basically responsible.”
In Hawaii, armed services secretaries in the Bush and Obama administrations signed the contracts, which the Defense Department website indicates were awarded between 2004 and 2015.
Defense Department spokesmen in Hawaii said officials who could comment on these issues were unavailable to answer questions about conditions here.
Spokespersons for Lendlease and Hunt Companies did not respond to requests for comment.
Some important progress for military families appears to be coming, however, as a result of the final compromise over the federal defense bill, which was announced Monday by the leadership of the House and Senate armed services committees.
The new legislation, if passed and signed into law by President Donald Trump, would include the creation of a new dispute resolution process for military housing tenants, add more housing counselors to advocate for families and establish a tenant bill of rights that will provide more protections for renters.
The bill of rights will require landlords to provide tenants with better information about the status of home repairs, ban the use of non-disclosure agreements as a condition of moving out of military housing and add new protections against retaliation against renters.
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