Military Housing Privatization

Congress established the Military Housing Privatization Initiative (MHPI) in 1996 as a tool to help the military improve the quality of life for its service members by improving the condition of their housing. The MHPI was designed and developed to attract private sector financing, expertise and innovation to provide necessary housing faster and more efficiently than traditional Military Construction processes would allow. The Office of the Secretary of Defense has delegated to the Military Services the MHPI and they are authorized to enter into agreements with private developers selected in a competitive process to own, maintain and operate family housing via a fifty-year lease.

MHPI addresses two significant problems concerning housing for military Service members and their families: (1) the poor condition of DoD owned housing, and (2) a shortage of quality affordable private housing. Under the MHPI authorities, DoD works with the private sector to revitalize our military family housing through a variety of financial tools-direct loans, loan guarantees, equity investments, conveyance or leasing of land and/or housing/and other facilities. Military Service members receive a Basic Allowance where they can choose to live in private sector housing, or privatized housing.

On February 11, 1996, President Clinton signed into law the National Defense Authorization Act for Fiscal Year 1996, Public Law 104-106 (110, Stat 186, Section 2801), containing authorities for the Military Housing Privatization Initiative (MHPI). This act includes a series of authorities that allow DoD to work with the private sector to build, renovate and sustain military housing. The goals are to:
  • obtain private capital to leverage government dollars,
  • make efficient use of limited resources, and
  • use a variety of private-sector approaches to build and renovate military housing faster and cheaper for American taxpayers.
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