In response to challenges the Department of Defense (DOD) was facing to repair, renovate, and construct military family housing, Congress enacted the Military Housing Privatization Initiative in 1996. The initiative enables DOD to leverage private sector resources to construct or renovate family housing. As of March 2009, DOD had awarded 94 projects and attracted over $22 billion in private financing. DOD plans to privatize 98 percent of its domestic family housing through 2012. Since GAO's last housing privatization report in 2006, major force structure initiatives have placed new demands on DOD for housing. GAO was asked to assess (1) the progress of DOD's housing privatization program, (2) the occupancy rates of the housing projects, (3) the impact of various force structure initiatives and DOD's efforts to mitigate any challenges, and (4) the effect of financial market turmoil on some projects. To perform this work, GAO visited 13 installations with privatization projects; analyzed project performance data; and interviewed DOD officials, real estate consultants, and private developers.
Recommendations for Executive Action
|Department of Defense||For Congress to maintain oversight of the Military Housing Privatization Initiative program, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to include, for each project that is retrofitted, an explanation of this practice and information on DOD's total investment in the retrofitted project in its semiannual status report to the congressional defense committees.||
Closed - Implemented
|Department of Defense||To better inform Congress about the financial market factors that could affect the privatized military family housing program's financial health and to enhance congressional oversight, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to include information in its semiannual report to the congressional defense committees on the effects current conditions in the financial markets are having on housing privatization projects.||
Closed - Implemented