February 08, 2019

Senator Warren Questions Military Housing Developers on Defense Dept. Partnership Agreements

New Reports Reveal Substandard Living Conditions for Servicemembers and Their Families in Privatized, On-Base Housing

Text of the Letters (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.), a member of the Senate Armed Services Committee, sent letters to five of the nation's largest private military housing developers to request information about their partnership agreements with the Department of Defense (DOD). The senator's letter follows a series of disturbing new reports that reveal unsafe and unsanitary conditions in privatized, on-base housing for military personnel and their families. The letter, which was sent to the Corvias Group, Balfour Beatty, Hunt Military Communities, Lincoln Military Housing, and Americas Lendlease Corporation, was sent one week in advance of a Senate Armed Services Committee hearing on this matter.

"Our military personnel -- regardless of where they are stationed -- deserve to live in affordable housing that is safe and is not falling apart around them," wrote Senator Warren in her letter. "The recent allegations of privatized housing project mismanagement that has resulted in unsanitary and unsafe living conditions raise significant concerns about the measures your company has in place to ensure that you provide high-quality housing to military personnel and to monitor and assess your performance and adherence to your agreements with the Military Departments."

In an effort to save money and reduce the time needed to renovate and modernize family housing units owned and operated by DOD, Congress in 1996 established the Military Housing Privatization Initiative (MHPI), which allowed the Department to partner with private sector developers who would own, operate, and maintain military family housing and in return have access to federal direct loans, loan guarantees, and other incentives.

A series of investigative reports by Reuters have revealed that servicemembers and their families that live in on-base housing owned by MHPI developers have been exposed to lead paint, vermin infestations, fecal and urine trails, bursting pipes, flooding, mold blooms, unmitigated mold growth, collapsed ceilings, fire hazards, electric wiring, and other substandard living conditions as a result of inadequate maintenance by housing companies. In addition, the DOD Inspector General identified problems in the electrical systems, fire protection, and environmental health and safety standards of multiple MHPI housing units as recently as 2015.

"Failing to provide quality housing strains morale and directly affects readiness," wrote Sen. Warren. "According to the Department of Defense (DOD), ‘access to affordable, quality housing is a key element affecting the quality of life of military servicemembers and their families,' that ‘directly affects personnel retention and ultimately unit readiness.'"
Senator Warren's letter highlighted the lack of transparency in the agreements between developers and the DOD and asked the developers a series of questions about the financial arrangements of these privatized housing projects, including whether they have been operating and maintaining privatized housing in accordance with their lease agreements.

"It would be profoundly troubling if your company, or your subcontractors, were maximizing short-term profit by providing military personnel with subpar housing," Senator Warren continued. "To ensure that this is not the case, I am seeking greater transparency on the fees, costs, and earnings your company receives from its military housing lease agreements, and how effectively your company develops and manages base housing for military families."

The Senate Armed Services Committee Subcommittees on Military Personnel and Readiness and Management Support will hold a joint hearing on this matter next Wednesday, February 13, 2019, which will include testimony from these companies, along with DOD officials and military families.