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The top risks facing military housing companies

Military housing companies encounter a many risks that can impact their ability to deliver quality accommodation for service members and their families.

06/10/2025 · 6 minute read

Military housing companies play an important role in supporting service members and their families by providing safe, comfortable, and affordable accommodation. Mitigating health and safety issues associated with housing conditions has been an ongoing priority for this sector, particularly in military barracks.

Military housing companies, specifically private companies under contract by the military, face a unique set of risks that can significantly impact the health and safety of their tenants, as well as their operational and financial stability. The following guidance explores the evolution of the military housing landscape, and five key areas of consideration for these companies to prioritize in their risk management approach.

A brief history of military housing privatization 

Military housing has evolved significantly over the years. Prior to the 1990s, military housing was government-owned and operated, managed directly by the DoD. However, as the demand for quality housing increased and maintenance costs rose, the DoD embraced privatization. 

In 1996, Congress authorized the Military Housing Privatization Initiative (MHPI) to improve the condition and quality of the DoD’s housing inventory, which had not been maintained due to a lack of funding and new construction. Today, the DoD provides general oversight of the privatized family housing program, but private housing companies are responsible for ownership, management, and maintenance of buildings.

The primary risks facing military housing companies

Military housing companies encounter a variety of risks that can significantly impact their ability to deliver quality accommodation for service members and their families, including:

Given the geographic spread of military housing across the US, military housing companies are exposed to a wide range of weather-related risks, including hurricanes, wind and hailstorms, flooding, and wildfires. The diverse geographic locations of these properties mean that they are exposed to a wide range of weather-related risks, while the volume of properties increases the likelihood of experiencing high-frequency losses. 

For these reasons, military housing companies should conduct comprehensive risk assessments to identify and mitigate the potential impacts of natural catastrophes on their properties and begin implementing risk management strategies accordingly. Investing in advanced predictive analytics, developing more resilient infrastructure, and creating robust emergency response plans to ensure the safety and continuity of operations during and after such events can also help proactively mitigate the challenges associated with natural catastrophes.

Mold is a significant concern for military housing companies, often cited as one of the top issues by tenants and one that has gained significant media attention in recent years. The presence of toxic mold in the home can lead to potentially serious health problems, including respiratory and immune health effects. 

To effectively combat mold growth, military housing companies must adopt a proactive approach that includes regular inspections and maintenance of properties to identify and address moisture issues before they escalate. Implementing proper ventilation systems, controlling indoor humidity levels, and ensuring that any water leaks are promptly repaired are critical steps in preventing mold development. Additionally, educating tenants about the importance of reporting water damage or excessive humidity can foster a collaborative environment for mold prevention.

In recent years, military housing companies have faced increasing scrutiny from tenants and government entities. Frequent complaints about mold, for example, can damage the reputation of a military housing company and lead to costly remediation efforts.

Outsized jury verdicts, or jury awards above US$10 million, are on the rise, exacerbated by heightened awareness and activism surrounding tenant rights. Military housing companies must be prepared to navigate this evolving landscape, as large fines and legal actions can severely impact their financial health.

The potential for negative publicity and reputational damage necessitates a proactive approach to tenant relations and risk management. Organizations may consider implementing robust tenant engagement strategies that prioritize transparency, communication, and responsiveness to tenant concerns. Additionally, investing in comprehensive risk management frameworks, including regular compliance audits and training programs focused on tenant rights and legal obligations, can help prevent legal issues and enhance the organization's reputation in the community.

The BAH is a vital component of the compensation package for military personnel, designed to assist service members in covering their housing costs. For private military housing companies, BAH represents a significant revenue stream, as it directly influences the affordability and demand for their housing offerings. 

Fluctuations in BAH can directly impact on the financial stability of military housing companies, making them vulnerable to changes in the housing market and economic conditions. For example, when BAH rates increase, military housing companies may experience a surge in demand, as service members can afford higher rents. Conversely, if BAH rates decrease or remain stagnant while local housing costs rise, companies may face reduced occupancy rates and revenue shortfalls.

To manage the risks associated with this dependence, companies should conduct regular market analysis to anticipate BAH changes, diversify their revenue streams beyond BAH, and implement flexible pricing models. Additionally, fostering strong relationships with military personnel can enhance tenant satisfaction, while establishing financial reserves and contingency plans can buffer against potential revenue shortfalls.

Military housing companies are subject to a complex regulatory environment that includes oversight from the DOD and various military branches, in addition to the standard regulations faced by real estate companies.

Compliance with military-specific regulations adds an additional layer of complexity to operations, requiring companies to stay informed about evolving requirements and maintain rigorous standards. Navigating the regulatory landscape can be resource-intensive, necessitating dedicated compliance teams and robust internal processes to ensure adherence to all applicable laws and regulations.

Paving the way for safer, more sustainable housing

The path forward requires a collaborative effort among military housing companies, the DoD, and the communities they serve to ensure that the housing needs of military families are met with the highest standards of care and responsibility. 

By implementing proactive risk management strategies, fostering strong relationships with tenants, and maintaining a commitment to safety and quality, these organizations can not only safeguard the wellbeing of service members and their families but also enhance their operational resilience.

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