6/27/2019 — 

WASHINGTON, DC – Today, the U.S. Senate voted 86-8 to approve a national defense bill coauthored by U.S. Senator Jack Reed (D-RI) that will help strengthen and modernize our military and includes needed reforms to hold private companies accountable for fixing serious problems on military base housing.  The Fiscal Year 2020 National Defense Authorization Act (NDAA) is a key piece of legislation that helps determine the annual military budget -- authorizing funding to equip, supply, and train our troops and provide for military families.  It includes $301.8 million to hire more housing personnel to inspect, fix, and oversee the military's privatized housing stock.

Co-authored by Armed Services Committee Chairman Jim Inhofe (R-OK) and Ranking Member Reed, the NDAA includes thirty new provisions that will begin to correct the unacceptable state of privatized military family housing.  Reed and Inhofe included language in the bill to improve privatized housing options for families living on military installations, including: a new “Tenant Bill of Rights;” additional funds to hire more housing oversight personnel; quality control measures and mandatory health and hazard inspections; establishing resident customer care advocates; withholding payments to landlords and contractors if problems aren't fixed; and increased oversight of the private contractors that manage housing on military installations.

“Each and every day, our servicemembers go above and beyond to defend our nation. And while our troops are out defending our nation, we have a solemn obligation to support and protect their families.  We will not accept unsafe, unsanitary housing conditions for military families and we are laser-focused on ensuring quality, safe, healthy housing for every service member and their family.  This bill will go a long way toward improving on-post military housing, but we have to stay on top of this issue to ensure these problems don’t resurface and that the reforms are comprehensive, systemic, and long-term,” said Senator Reed.  “We will be holding more hearings to ensure the recent progress is sustained and that our military families are getting the high-quality housing and service they deserve.”

In the 1990s, on-base housing had fallen into a state of disrepair and there were significant maintenance backlogs at bases across the country.  Working with the Department of Defense, Congress created the Military Housing Privatization Initiative to correct this, and, for a period, things began improving for many.  But recently, a major disconnect between the promised reforms and the reality for many military families in on-base housing was uncovered.  A Reuters series, “Ambushed At Home,” chronicled major failings at multiple military housing projects across the country -- from shoddy construction; to mold and radon gas causing respiratory and other health issues; to rodent and bug infestations; and other major issues that went unaddressed by military housing management officials.

“We are establishing a Tenant Bill of Rights and taking other steps to empower military families.  It’s not in their nature to complain, but if there are problems, we want to hear about them and ensure they are being addressed.  There was a real failure in the system that led to this state of disrepair.  If companies are in breach of contract they absolutely must be held accountable.  Improving military housing will require both legislative fixes and a culture change.  I will continue to push for reforms and keep the pressure on the Pentagon and contractors to upgrade military housing and increase transparency and accountability,” stated Senator Reed.

As the Chairman and Ranking Member of the Senate Armed Services Committee, Inhofe and Reed initiated a series of hearings to drill down on the scope of the problem and develop effective solutions and improvements.  The hearings included testimony from military families, the nation’s service secretaries and top uniformed officers, and executives from housing management corporations.  Soon after, each branch of the Armed Forces took action to provide better housing at the 200,000 units of family housing on military installations throughout the U.S. that are maintained by private companies.

According to data provided by the services, every tenant in privatized housing has been contacted for home visits.  Tens of thousands of homes and apartments have been inspected by commanders.  Nearly 13,000 work orders were created as a result of those inspections, with many of those having been completed to the satisfaction of residents.

However, problems still persist.  Last week, a CBS News/Reuter’s investigation found that employees of some private companies that manage military homes on bases across the country were falsifying repair information in order to fraudulently collect performance bonuses.

“We are going to crack down on fraud and hold bad actors accountable.  We’ve got to keep on top of this issue and ensure the military and their housing partners are doing right by the families they serve,” said Senator Reed.

Among the reforms Reed helped include in the bill are:

Summary of MHPI provisions in the Senate FY20 NDAA

Title 30 - Military Housing Privatization Reform

Subtitle A – Accountability and Oversight

•  Establishes various definitions for terms like landlord, privatized military housing, and incentive fees.

•  Requires DOD to develop a document to be known as the “Tenant Bill of Rights,” which would include but not be limited to minimum rights, such as homes that meet minimum health and environmental standards, the ability to report inadequate living standards to the military chain of command without fear of reprisal, and the ability to enter into a dispute resolution process for purposes of recouping basic allowance for housing.

•  Requires DOD to designate (from among current officials at DOD) a Chief Housing Officer who must be presidentially appointed and Senate-confirmed.

•  Requires DOD to consider any performance history of a landlord providing substandard housing when deciding whether or not to enter into a new agreement or renew an existing agreement with that landlord, along with the recommendation of the installation commander.

•  Requires DOD to withhold payment if a landlord is found to have engaged in a material breach of the agreement and rescind that agreement if the breach is not remedied within 90 days.

•  Requires DOD to provide a plan by 2/1/20 to contract with home inspectors to conduct inspections, assessments of habitability, and structural integrity of each privatized housing unit.

•  Repeals the requirement that DOD pay an additional 5 percent of the calculated Basic Allowance for Housing (BAH) to MHPI projects. Instead, the provision would designate those funds for use by the Service Secretaries to pay for improvements to the management and oversight of the MHPI program, including the hiring of additional civilian personnel, the acquisition of IT systems, or other initiatives that would improve project oversight.

•  Requires DOD to report by 2/1/20 on a standard for common credentials to be used throughout DOD for all inspectors of health and environmental hazards at privatized military housing units.

•  Requires DOD to ensure each landlord provides access to the maintenance work order system to personnel of the housing management office (HMO) at each military installation, personnel of the installation and engineer command (or center) of the military departments, and other personnel DOD deems necessary.

Subtitle B – Prioritizing Families

•  Requires DOD to create and implement a standardized formal dispute resolution process across all military installations to ensure fair and prompt resolution of landlord-tenant disputes concerning maintenance and repairs, damage claims, rental payments, move-out charges and other claims to withhold payments. Notably, the provision would authorize a military member to request from the commander that BAH be withheld, and would authorize the withholding of such BAH, until the issue has been resolved.

•  Requires DOD to ensure that every military installation use the same electronic satisfaction survey (with embedded privacy and security mechanisms) for all surveys relating to the customer service experience of MHPI housing residents.

•  Requires DOD to report not later than 90 days after enactment on the legal services available to servicemembers who have been harmed by a health or environmental hazard while living in military housing.

•  Requires DOD to establish a policy for lead-based paint inspection, require access for qualified inspection professionals to military installations, and report the number of houses inspected and the results of those inspections.

•  Suspends the Resident Energy Conservation Program (RECP) until DOD can certify that 100 percent of military housing units are individually metered and certified by an independent entity through an energy audit.

•  Prohibits landlords from using a call center located outside the United States for maintenance work order calls.

•  Requires DOD to submit a report identifying all installations that should be monitored for excessive levels of radon to ensure levels are below EPA guidelines. Also requires the Services to verify radon testing of privatized housing units on an annual basis.

Subtitle C – Long-Term Quality Assurance

•  Requires DOD to develop standard documentation, templates, universal leases and forms for privatized military housing.

•  Requires the Services to establish a military housing council to identify and resolve problems with privatized housing, to meet quarterly (at least), and to identify best practices.

•  Requires DOD to ensure that all installation commanders annually review and approve mold and pest control plans of landlords and use appropriate personnel or contractors for health and safety hazards.

o Requires HMOs to physically inspect and approve habitability of each vacant housing unit before a tenant moves in and out (including move out charges), to establish tenant contact 15 and 60 days after move-in, and maintain all test results related to health, environmental and safety conditions.

o Requires landlords to disclose to DOD their bonus structures for community managers and regional executives, share health and safety test results with tenants no later than three days after receiving those results, include a guide explaining test results, and conduct a walkthrough with tenants (or HMO designated by the tenant, if tenant not available) prior to move-in.

o Requires landlords to remediate any issues with a housing unit if it does not meet minimum health, safety and welfare standards during walkthrough prior to move-in and prohibits the landlord from conducting any promotional events to incentivize tenants to fill out satisfaction surveys without approval of the HMO.

o Prohibits landlords from awarding a DOD “Partner of the Year” award or similar award and ensures employees of the HMO and DOD can inspect housing units.

o  Prohibits landlords from having tenants agree to any form of settlement, nondisclosure or release of liability without first notifying the tenant of their right to legal assistance and providing a copy to the ASD for Sustainment.

o Prohibits landlords from changing the position of a prospective tenant on a waiting list for a housing unit to removing them from the list if the prospective tenant turns down an offer for a housing unit determined to be unsatisfactory by the tenant and confirmed by the HMO and installation commander.

o Ensures landlords consider the needs of enrollees in the Exceptional Family Member Program, or any successor program, are considered in assigning housing units.

•  Allows DOD to renegotiate any privatized housing agreement (a.k.a. contract) with the landlord at least once every five years and prohibits any employee of the landlord from doing any work if found to have committed work order fraud.

o Allows DOD to withhold all or part of any incentive fee if the landlord fails to or is unable to remedy any health or environmental hazard at a housing unit.

o Requires the landlord to pay all medical bills for a tenant if the landlord is found to have not maintained the minimum standards of habitability for a housing unit.

o Requires the landlord to pay reasonable relocation costs, actual costs of living, and per diem associated with the relocation of a tenant due to a health or environmental hazard, provided it is no fault of the tenant and confirmed by HMO.

o Requires the landlord’s maintenance work order system to:

? Be reliable and have the ability for a tenant to submit a work order through an internet portal and mobile application, with the ability to upload photos, communicate with maintenance personnel and rate the individual service calls.

? Allow real-time access by DOD officials and only allow a work order ticket to be closed once the tenant and head of HMO approve.

• Requires DOD to withhold incentive fees paid to a landlord if that landlord fails to remedy a health or environmental hazard at a housing unit.

• Provides direct hire authority for the purpose of quickly hiring new civilian employees to fill vacancies in installation housing offices.

Report Language

• Directs the GAO to review DOD policies and processes for determining BAH.

• Directs DOD to create a formal contingency plan for the management of privatized housing units, including the financial liability for each installation and alternative courses of action should current real estate agreements be terminated.

• Directs DOD to report on DOD-wide standards and education requirements to address the concern that the chain of command feels that it does not have the necessary training or authority to serve as an advocate for servicemembers.

• Requires the Secretary of the Air Force to review the organization structure of the Air Force Civil Engineer Center, and encourages a reorganization, due to concerns that the Air Force is the only service has a civilian responsible for the service’s installation engineering command.

Amendments adopted during Markup

• Service secretary shall ensure that performance evaluations of installation commanders and their senior enlisted counterparts indicate the extent to which they have or have not exercised effective oversight and leadership in improving conditions of privatized housing and addressing concerns of servicemembers and families (Duckworth).

• Prohibits funding to privatize temporary lodging on DOD installations for FY20 and directs a GAO review of the privatized lodging program (Blumenthal).

• Requires DOD to establish a uniform code of basic housing standards for safety, comfort and habitability for privatized housing and a plan to contract with home inspectors to conduct thorough inspections and assessments of structural integrity and habitability of each privatized housing unit (Heinrich).

•  Requires the Secretary of Defense to allow residents to anchor any furniture, television or large appliance to the wall of a unit for the purposes of preventing such item from tipping over without incurring penalty or obligation to repair the wall upon vacating the unit. And requires DOD to ensure that all freestanding furniture taller than 27 inches are securely anchored (Blumenthal).

• Requires DOD to provide a prospective tenant (before moving in) all information regarding maintenance conducted in that housing unit for the previous 10 years (Peters).

•  Directs the Army to carry out a pilot program to build and monitor the use of not fewer than five single family homes for members of the Army and their families, at a location determined by the Army, and using the All-American Abode design by the United States Military Academy (King).

• Requires DOD to have an electronic work order system for all work orders for maintenance requests related to privatized housing units and to provide tenant access to such system to, at a minimum, track the status and progress of work orders (Jones).

• Requires DOD to develop a uniform move-out checklist for tenants of privatized housing which must be validated by the housing management office and requires that all maintenance issues and work orders related to health and safety be reported to the installation commander (Kaine).

• Requires DOD to submit a plan to establish concurrent jurisdiction with local community law enforcement at locations with privatized housing that is not located on a DOD installation (Kaine).

• Directive report language that each military service conduct a thorough review of all real estate agreements that services have entered into with private housing companies and urges any fraud, waste, or abuse to be requested to the Department of Justice for criminal or civil investigation (Blumenthal).

•  Requires DOD to establish a database of complaints related to privatized housing units, increases transparency of the financial details of each real estate agreement with annual financial statements, and requires a report on denied requests to withhold payments of tenants (Warren).