Housing stipends paid to a million service members living off base in the United States will rise an average of 3.4 percent Jan. 1, which for a second straight year will not be enough to match rising rents and utility costs nationwide.

Defense pay officials are executing a five-year plan to dampen stateside housing allowances gradually so that by 2019 members will pay 5 percent of housing costs out of pocket.

In 2016, the cost share for Basic Allowance for Housing recipients will be 2 percent of national average housing costs for their pay grade. It was 1 percent in 2015. The negative impact of BAH cost sharing on purchasing power will range from $24 to $57 a month, depending on rank and family status.

Defense officials called the computation for slowing overall compensation growth “fair, responsible and sustainable.”

“(T)he overall military pay and benefits package remains robust and healthy,” defense officials said in a statement.

Starting in 2015, BAH recipients lost more value from their housing allowances, about $300 annually, when the rate-setting formula no longer included funds to cover renters insurance.

BAH payments in 2016 still will total more than $21 billion as rates will rise across most of more than 300 military housing areas. Actual increases for individuals will vary based on where members are assigned, rank or pay grade and whether members qualify for the higher with dependents BAH.

Service members can find individual 2016 rates at www.defensetravel.dod.mil/site/bahCalc.cfm.

In some areas, BAH rates will fall, but the BAH program continues to provide individual rate protection, so no current recipients will see their BAH fall to revised rates.

To recalculate rates annually, defense officials gather rental cost data from across the United States. Local military housing offices help by directing data collection away from apartment complexes and individual housing units unsuitable for the military.

Rates are reset based on median current market rents and average utility costs (electricity, heat, water and sewer) for six housing profiles – a combination of dwelling type (apartments, townhouses or single-family homes) and number of bedrooms. Individual rates reflect local costs for housing appropriate for each pay grade, with and without dependents.

Some areas will see sharp BAH hikes, such as an average increase of 12.2 percent in Everett, Wash., and a 7.9 percent jump in Panama City, Fla. But BAH for new arrivals will fall in other areas, including by 3.1 percent in Gulfport, Miss., and by 2.2 percent at Fort Riley, Kan.

Service members living off base overseas don’t receive BAH. Instead they get an Overseas Housing Allowance based on what individual members pay to rent local housing. OHA gets adjusted periodically to keep pace with the dollar’s changing value against local currency.

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