Senate Panel Takes Military Housing Companies to Task for Failing Their Tenants

 The Camp Pendleton Joint Housing Office is responsible for coordinating operations and oversight management of family housing requirements to include policy development, budget formulation, training and required liaison between the Navy Facilities Command (NAVFAC) and Public-Private Venture (PPV) partners. They also provide guidance and advocacy to military personnel, regardless of duty assignment, while living aboard Camp Pendleton. Marine Corps photo/Jeff Nyhart
The Camp Pendleton Joint Housing Office is responsible for coordinating operations and oversight management of family housing requirements to include policy development, budget formulation, training and required liaison between the Navy Facilities Command (NAVFAC) and Public-Private Venture (PPV) partners. They also provide guidance and advocacy to military personnel, regardless of duty assignment, while living aboard Camp Pendleton. Marine Corps photo/Jeff Nyhart

Crystal Cornwall had moved into a military house on Keesler Air Force Base, Mississippi, when termites fell out of the light fixtures onto beds and the floor. At Camp Pendleton, California, the family lived with pervasive mold in their home and had no way of contesting charges levied against them when they prepared to move.

At Tinker Air Force Base, Oklahoma, Janna Driver's family was sick, suffering from respiratory issues, headaches, nosebleeds and other problems. To address what she thought was the issue, Driver spent a weekend deep-cleaning her home. When she moved a table in her children's playroom, she found a black residue on the wall that she couldn't identify. Later, when a maintenance person came to do work on the house, he unlocked the utility room and found mold covering everything, from floor to ceiling.

"On the surface, these houses appear to be flawless, but inside the walls tells a different story," Driver said Thursday during testimony before a joint hearing of the Senate Armed Services subcommittees on personnel and readiness and management support on the Defense Department's privately managed military housing program.

According to Cornwall and Driver, hundreds of families have contacted them with tales of horror from on-base housing, including bug and rodent infestations, bad wiring and plumbing, lead and mold.

They said that while some Defense Department housing employees have been sympathetic and helpful, many young families have been dismissed or faced blowback from their military chain of command.

According to a new poll of military families living in base housing, nearly 56 percent of 14,558 qualified respondents said they had negative or very negative experiences living in privately managed housing -- a significantly higher number of unsatisfied customers than the 80 to 85 percent satisfaction rate frequently cited by the Pentagon and the private companies.

On Thursday, heads of five of the private companies that manage housing, as well as Defense Department leaders responsible for their oversight, testified before the subcommittees to explain their actions and discuss how to solve the problems.

"It's clear this is happening everywhere ... there are 8,000 residents who are currently dissatisfied," said Oklahoma Sen. Jim Inhofe, chairman of the Senate Armed Services Committee said. "We need necessary reforms to assure accountability."

Nearly all military housing on installations is managed by private companies. The Defense Department in 1996 turned over responsibility to the companies after failing to maintain aging homes and build enough new homes to accommodate personnel.

During testimony, the five company executives, from Balfour Beatty Communities, Corvias Group, Hunt Military Communities, Americas Lendlease Corporation and Lincoln Military Housing, were contrite. But John Picerne, founder of Corvias, was the only one to apologize.

"We let down some of our residents. I'm sorry and we are going to fix it. We will get to the bottom of this problem and return to the gold standard," he said.

John Ehle, president of Hunt Military Communities, said the company was investing in capital improvements and adding staff and amenities. Others made similar statements.

"There is no acceptable percentage of unhealthy homes," Ehle said.

Denis Hickey of Lendlease called the situation "clearly avoidable."

The company needs to invest $16 billion over the length of its contract to fund remediation and maintain its housing stock.

"I regret when even one service member family feels we've come up short," said Lincoln Military Housing President Jarl Bliss. "I'm committed to working with military families, our DoD partners and your subcommittee member to address concerns."

While the amount of money military families pay to the more than 30 companies that manage private homes is unknown, a report by Reuters that exposed the scope of the issues in Air Force and Army housing estimated it was $3.9 billion in 2018.

When the company heads were asked how many annual profits for their military contracts total annually, Christopher Williams of Balfour Beatty said that company's net profits were $33 million a year. Corvias replied that his company's profits were $12 million to $14 million. The other three declined to answer the question, from Massachusetts Sen. Elizabeth Warren, a Democrat, adding that they are privately held companies or that they would provide the answer later.

The committees floated a number of ideas for fixing the problem, including requiring the companies to issue a tenant bill of rights; breaking the 50-year contracts with the military and allowing other companies to compete for them; and conducting and publishing satisfaction surveys online.

Military spouses also asked for the option to withhold rent payments if maintenance issues are not addressed.

Defense Department leadership who testified at the hearing said they are working to solve the problems.

Assistant Secretary of the Air Force for Installations, Environment and Energy John Henderson agreed with the suggestion that families be able to withhold rent if their housing needs aren't met.

"The residents should have the choice to pay the rent if they feel like their landlord isn't giving them a safe healthy place to live. Additionally, there should be rebates for untimely repairs, power outages. And finally, it would be nice if we had discretion over the incentive fee so we had a bigger hammer to hold over our project managers," Henderson said.

-- Patricia Kime can be reached at patricia.kime@miltiary.com. Follow her on Twitter @patriciakime.

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