[CPEO-IRF] Housing privatization

[Lenny Siegel <lsiegel@cpeo.org>]

The article I posted about housing at Hanscom Air Force Base 
(http://www.metrowestdailynews.com/localRegional/view.bg?articleid=96240)
raises questions that didn't come up during previous rounds of base
closure, because the Defense Department's Housing Privatization
Initiative didn't become law until 1996.

I've never read the legal contracts, but my understanding of
privatization is that developers build or rehabilitate housing units on
military bases, and they rent the units out to military families. The
private companies own the housing, but they lease, with an option to
purchase, the underlying real property. If there is insufficient demand
from military families, the private owner can offer units on the open market.

Presumably, if housing has already been privatized on a base slated for
closure, the private developer will retain control and gain ownership of
that portion of the base, even if the rest of the installation is
transferred to another entity. This isn't necessarily a bad thing, but
it could complicate efforts to create cohesive, base-wide reuse plans.

Some host communities have negotiated with the military over housing
privatization, before it occurred, because of the potential for closure
over the 50-year term of the privatization contracts, but in general
they have little leverage over federal property near or even within
their boundaries.

Any community facing base closure should determine if the local military
base has privatized housing. If it hasn't already, it should start
talking to both parties to the privatization contract to determine how
that contract might affect future use of the entire base if closure occurs.

The website for the Military Housing Privatization Initiative is at 
http://www.acq.osd.mil/housing/mhpi.htm.

The Government Accountability Office has published two recent studies on
the Initiative, GAO-04-111 (October 2003) and GAO/NSIAD-00-71 (March
2000). GAO reports may be downloaded from http://www.gao.gov.

Lenny Siegel

-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org
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