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Military Housing: Analyses of Overseas Housing Costs Are Misleading to Decisionmakers

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Report Type Reports and Testimonies
Report Date June 13, 1986
Report No. NSIAD-86-82
Subject
Summary:

GAO evaluated Army, Navy, and Air Force economic analyses issued between December 1982 and January 1984 to identify the most cost-effective alternative for satisfying military family housing requirements in Europe.

GAO found that the quality of the economic analyses was poor because of the large variety of problems they contained, the high frequency of problem occurrence, and the effects of these problems on the analyses' major conclusions. GAO determined that: (1) even though the Navy study concluded that straight leasing was the least expensive alternative, lease with purchase was actually the least expensive alternative; (2) although the Army study concluded that using housing manufactured in the United States and erected in West Germany would cost more than leasing, U.S.-manufactured housing was less expensive than build-to-lease housing; and (3) either the rent was substantially less than the mortgage payment in the build-to-lease alternative or the lessor had to be able to build housing at a lower cost than the Air Force estimated for the military construction alternative.

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