FY2026 NDAA, Section 624 ("Improvements to basic allowance for housing")

Summary

Requires the Secretary of Defense to improve transparency in the calculation of the Basic Allowance for Housing (BAH) by developing and annually updating a clear, publicly accessible document explaining BAH rates, including methodology and data sources.

Instructs the Secretary to provide Armed Forces members with explanatory information on BAH eligibility when changes occur in their status.

Mandates the Secretary to engage a qualified entity to conduct a study by September 30, 2026, to assess current BAH adequacy, propose improved calculation methods, and evaluate the use of machine learning and artificial intelligence in these calculations.

Requires the selection of at least 15 military housing areas (MHAs) for study evaluation based on geographic, rank, dependency, and economic factors.

Obligates the Secretary to provide annual updates and a final report to the Armed Services Committees on study outcomes and potential legislation improvements.

Requires the Secretary of Defense to clarify and annually publicize methods for calculating Basic Allowance for Housing, and to provide this guidance, including intended rental housing standard by locality, to members of the Armed Forces when eligibility or rates may change.

SEC. 624. IMPROVEMENTS TO BASIC ALLOWANCE FOR HOUSING. (a) Increasing Awareness.--The Secretary of Defense shall seek to improve transparency of the calculation of BAH by-- (1) developing a clear, accessible document that explains how rates of BAH are determined, including methodology and types of data sources used, which shall be-- (A) reviewed and updated not less frequently than annually and as rates and calculation methods change; and (B) made available on a publicly accessible internet website and distributed across all relevant components of the Department of Defense; and (2) providing to members of the Armed Forces when such members experience a permanent change of station, permanent change of assignment, change in dependency status, change in grade, or any other event that may impact the eligibility of such members for or rate of BAH-- (A) the information included in the document developed under paragraph (1); and (B) an explanation of the type of rental housing the rate of BAH received by such members is intended to support in each locality.

Requires the Secretary of Defense to study alternative Basic Allowance for Housing rate calculations, including whether ML/AI is feasible and advisable for rate computation, and to incorporate it if so, while continuing to pay the allowance under existing statutory rates during the study.

(b) Study to Evaluate Alternative Rate Calculation.-- (1) Study.-- (A) In general.--Not later than September 30, 2026, the Secretary of Defense shall seek to enter into an agreement with a covered entity to conduct a study in which the covered entity-- (i) assesses the adequacy of the current BAH for MHAs selected under paragraph (3), including a review of the commuting times and distances of members of the Armed Forces and the overall affordability of housing in such MHAs; (ii) reviews existing methods of calculating BAH and proposes methods of calculating BAH described in paragraph (2) for MHAs selected under paragraph (3) that are more efficient and accurate than such existing methods, as appropriate; and (iii) evaluates the feasibility and advisability of using machine learning and artificial intelligence in the calculation of BAH and, if feasible and advisable, incorporates machine learning and artificial intelligence into the proposed methods described in clause (i). (B) Rule of construction.--During the study conducted in accordance with subparagraph (A), the Secretary shall pay BAH in MHAs selected under paragraph (3) at rates prescribed under section 403 of title 37, United States Code.

Sets criteria for monthly rates including accurate local housing prices, sufficient for affordable housing, and requires the Secretary to select at least 15 MHAs for evaluation considering geographical and economic factors; mandates study completion within three years of the agreement with covered entity

(2) Proposed monthly rates.--A proposed monthly rate of BAH described in this paragraph-- (A) accurately reflects housing prices in the MHA subject to such rate; and (B) is sufficient for military families who reside in such MHA to procure adequate and affordable housing. (3) Mhas.--The Secretary shall select not fewer than 15 MHAs for the covered entity to evaluate in the study conducted in accordance with paragraph (1). In selecting MHAs for evaluation under such study, the Secretary shall consider factors including the following: (A) Variety of geographic location. (B) The ranks of members who reside in an MHA. (C) Whether members who reside in an MHA have dependents. (D) Economic factors including inflation, cost of living, and the cost of private mortgage insurance. (4) Completion.--An agreement entered into under paragraph (1)(A) shall require the study conducted under such agreement to be completed not later than the date that is three years after the date on which the Secretary and the covered entity enter into such agreement.

Requires the Secretary to provide annual briefings and a report on the study's status and findings.

(5) Annual briefings.--Not later than 180 days after the date of the enactment of this Act, and on an annual basis thereafter until the completion of the study conducted in accordance with paragraph (1), the Secretary shall provide to the Committees on Armed Services of the Senate and the House of Representatives a briefing on the status of the study under this section. (6) Report.--Not later than 120 days after the date of the completion of the study conducted in accordance with paragraph (1), the Secretary shall submit to the Committees on Armed Services of the Senate and House of Representatives a report containing the results of such study. Such report shall include-- (A) an evaluation by the Secretary of the proposed methods of calculating BAH by a covered entity pursuant to an agreement under paragraph (1); and (B) any recommendations of the Secretary for legislation to improve the methods of calculating BAH based on the study.

Defines key terms like "BAH'' as basic allowance for housing for members of the uniformed services, "MHA" as military housing area and "covered entity" as those with data analysis and machine learning expertise and no anticompetitive practices.

(c) Definitions.--In this section: (1) The term ``BAH'' means the basic allowance for housing for members of the uniformed services under section 403 of title 37, United States Code. (2) The term ``covered entity'' means an entity or combination of entities-- (A) with combined expertise in data analysis and machine learning and access to relevant data on local rental rates in real estate markets in the MHAs selected under subsection (b)(3); and (B) that has not participated in anticompetitive price- fixing in a real estate market. (3) The term ``MHA'' means military housing area.