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WASHINGTON, July 20, 2004 – With funding levels making it increasingly difficult to maintain acceptable housing conditions at many military installations, the Defense Department in the mid-1990s turned management and maintenance of some 200,000 "below standard" quarters over to private firms.
"We knew that we would never be able to budget enough money to be able fix all of that housing in any short time frame," said Joseph K. Sikes, DoD's director of housing and competitive sourcing, in an interview today with the Pentagon Channel and American Forces Press Service. "We originally estimated in would take about 20 years, based on the amount of money we were budgeting for housing back in the middle '90s," he added. Today, Sikes appears much more optimistic. He said DoD's plan for privatizing government housing has meant that 95 percent of the department's inadequate housing will be fixed by 2007. Sikes said Defense Secretary Donald H. Rumsfeld identified military housing as a top priority for the department and that President Bush made housing privatization a key component of his management initiative. He said that already some 60,000 inadequate housing units have been eliminated at military installations from Fort Hood, Texas, where more than 5,000 houses needed to be fixed, to Elmendorf Air Force Base, Alaska. By the end of fiscal 2005, the department will have privatized about 136,000 housing units, he added. Sikes said the move to turn the management and maintenance of government housing over to private firms went slowly at first. "It was a big cultural change for commanders on bases -- as well as the private sector -- to actually own and maintain these houses on bases," he explained. "Everyone sort of stood back and waited to see the first project." The first privatization projects were at Fort Carson, Colo., and Lackland Air Force Base, Texas. He said both projects proved to be successful, and soon commanders realized the program was a way to get housing fixed sooner. "After 1999, the projects really started coming in at a higher pace," he said. "And what we're seeing now is a result of that increase." Sikes said that more than 70 percent of base housing is now privatized, and he expects that number to rise. "After 2007, more and more bases will determine it's easier not to take care of the houses yourself," he explained. "It's better to have a private developer maintaining it and operating it, and so I think we'll see even more projects become privatized." According the Sikes, thus far 32 projects have been awarded and $581 million invested in the program. Meanwhile, private firms have invested some $6.5 billion to improve living conditions and housing for service members and their families, he said.
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