Defense Department may cut soldier's housing allowance - KXXV-TV News Channel 25 - Central Texas News and Weather for Waco, Temple, Killeen |

FORT HOOD

Defense Department may cut soldier's housing allowance

FORT HOOD, TX (KXXV) -

Military basic allowance for housing, better known as BAH, could be on the chopping block according to Defense Department officials.

This is their latest discussion on how to make nearly $500 billion cuts under sequestration.

Sgt. 1st Class Ret. Eddie Johnson told us how important housing allowance is to soldiers.

"Everything seems to be going up now, so you really don't need to be cutting anything," said Johnson.

He says the assistance is important, especially for soldiers with a family.

As of now, housing allowance increases up to 3 percent each year to match inflation.

However, military branch officials are analyzing three options that would change that: no future housing allowance inflation until 2034; reducing housing allowance by 10%; reducing housing allowance by 15%.

These cuts would not only affect soldiers, but local real estate as well.

"A lot of soldiers, they look at their BAH whether to rent or to buy a house," explains Exit Home Realty broker Jose Segarra. "So when BAH goes up, real estate tends to follow."

Segarra says 60 to 70% of homes in Killeen are driven by BAH.

"The majority of our home buyers, not only are they military, but they are in that e5, e6, e7 price range."

The cuts would have a tremendous affect on real estate, and could be the difference between buying and renting.

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