Report | Oct. 21, 2021

Evaluation of the Department of Defense’s Implementation of Oversight Provisions of Privatized Military Housing (DODIG-2022-004)

Evaluation

Publicly Released: October 25, 2021

 

Objective

The objective of this evaluation was to determine whether the DoD is providing effective oversight of privatized military housing. Our evaluation focused on whether the DoD implemented the oversight provisions of the FY 2020 National Defense Authorization Act (NDAA) Military Housing Privatization Initiative (MHPI). Our finding captures the status of the DoD’s implementation of the oversight provisions of the FY 2020 NDAA through February 2021.

 

Background

In 1996, Congress established the MHPI to help improve the quality of housing conditions for Service members. Congress developed the MHPI to address the poor condition of DoD-owned housing and a shortage of affordable private housing. The MHPI authorizes the Military Departments to enter into business agreements with landlords to maintain and operate privatized military housing through 50-year leases. Business agreements are legal documents signed between the Military Departments and the landlords that, among other things, outline the management, operation, and maintenance of privatized military housing.

In 2019, the Senate Armed Services and the House Armed Services Committees held several hearings on the poor housing conditions caused by a lack of DoD oversight. The Senate hearings detailed problems with privatized military housing that affected the health, safety, and well-being of Service members and their families. The hearings prompted Congress to include provisions in the FY 2020 NDAA related to tenants’ rights and responsibilities, and oversight to reform privatized military housing.

 

Finding

The DoD has taken steps to implement some of the FY 2020 NDAA MHPI oversight provisions for privatized military housing. For example, the DoD designated a Chief Housing Officer and implemented the tenant responsibilities. In addition, between 2019 and 2020, the DoD issued MHPI oversight guidance to the Military Departments including a common incentive fee framework, tenant satisfaction survey policy, Universal Lease, Dispute Resolution Process including rent segregation request and tenant displacement guidelines, and move-in and move-out checklists.

However, the DoD has not implemented all of the FY 2020 NDAA MHPI provisions to improve the oversight of privatized military housing. For example, the DoD has not:

  • issued comprehensive oversight guidance to the landlords for implementation of all of the rights in the Tenant Bill of Rights;
  • established a publically available complaint database;
  • developed a uniform checklist for Housing Management Offices to validate completion of all health and safety maintenance work; or
  • submitted a civilian personnel shortage report to Congress.

The DoD has not fully implemented the FY 2020 NDAA MHPI oversight provisions because the DoD has taken a three-phased approach, from January 2020 to September 2021, to address the provisions. For example, from October 2019 to November 2020, the DoD has issued guidance and is currently working on implementing the four remaining rights in the Tenant Bill of Rights. However, many of the landlords are waiting for the DoD to issue relevant MHPI oversight policies before agreeing to implement the FY 2020 NDAA MHPI oversight provisions.

As a result of the DoD’s phased approach to implementing the FY 2020 NDAA oversight provisions, nine of the fourteen landlords requested the DoD provide a comprehensive proposal for implementation of all relevant MHPI provisions. Those nine landlords sent letters between May 2020 to January 2021 to the DoD expressing concerns with the DoD’s unilateral issuance of guidance to implement sections of the FY 2020 NDAA including, but not limited to, prospective tenant access to seven-year maintenance history, and use of the Universal Lease and the Dispute Resolution Process without first obtaining landlord consent. Specifically, the nine landlords explained that they could not consider partial requests to implement portions of the FY 2020 NDAA.

The DoD is unlikely to obtain agreement from the landlords to implement the MHPI oversight provisions without fully developing policy and an implementation proposal for the FY 2020 NDAA MHPI oversight provisions. Therefore, the DoD’s ability to provide oversight of privatized military housing is limited, and the DoD’s assurance that safe and quality living conditions are available to Service members and families is reduced.

 

Recommendation

We recommend that the Office of the Deputy Assistant Secretary of Defense for Housing, in coordination with the Military Departments, develop a plan of action and milestones for issuing comprehensive implementation guidance for the remaining Fiscal Year 2020 National Defense Authorization Act Military Housing Privatization Initiative oversight provisions. In addition, in coordination with the Military Departments, develop a comprehensive implementation proposal for presentation to the landlords.

 

Management Comments and Our Response

The Office of the Deputy Assistant Secretary of Defense for Housing did not provide comments to the draft report; therefore, the recommendation is unresolved. We request that the Office of the Deputy Assistant Secretary of Defense for Housing provide comments on the final report.

 

This report is the result of Proj. No. D2020-DEV0PA-0096.000.