The Department of Defense announced significant BAH (Basic Allowance for Housing) increases for 2023, with many locations seeing 10-20% jumps. For local businesses near military installations, this represents real opportunity.
Understanding BAH
BAH is a monthly payment to service members that covers housing costs. It's calculated based on:
- Rank - Higher ranks receive more
- Dependency status - Those with dependents receive more
- Location - High cost-of-living areas receive more
For example, an E-5 with dependents in San Diego might receive $3,200/month for housing, while the same rank at Fort Riley, Kansas might receive $1,400/month.
Why 2023 Increases Matter
The 2023 BAH increase averaged 12.1% nationally—the largest increase in years. This adjustment reflects rising housing costs, but it also means military families have more money allocated for housing-related expenses.
What this means for local businesses:
- Real estate agents: More purchasing and rental budget
- Property managers: Higher rent tolerance
- Home improvement: More budget for upgrades and services
- Furniture and home goods: Fresh starts in new housing
- Home services: Lawn care, cleaning, maintenance
The Spillover Effect
When housing budgets increase, discretionary spending often follows. A family that was stretching for rent now has breathing room for:
- Home improvements
- Local dining and entertainment
- Activities for kids
- Services they previously DIY'd
High-Increase Areas
Some locations saw BAH increases of 20% or more. If you're a local business near these installations, pay attention:
- Areas with recent housing market growth
- Installations that added personnel
- Regions with limited housing inventory
Check the official BAH calculator at militarypay.defense.gov to see rates for your area.
Marketing to Increased Budgets
1. Update your military discount program - Now's the time to promote it
2. Time campaigns to PCS season - New families arrive with fresh BAH rates
3. Partner with installation housing offices - Get in front of incoming families
4. Advertise in installation guides - Reach families researching their move
BAH increases are a tangible boost to military family spending power. Local businesses that recognize and market to this opportunity will capture the benefit.