In the mid-1990s, military officials became concerned that inadequate and poor-quality housing was undermining the quality of life for service members.
At the time, the Defense Department designated two-thirds of its domestic family housing inventory — or about 180,000 homes — as inadequate and needing repair or replacement.
About $20 billion and 40 years of effort were estimated to be needed to correct the problem.
Enter the Military Housing Privatization Initiative passed by Congress in 1996 to attract private-sector financing and expertise that could provide housing much faster than traditional military construction processes would allow.
On Tuesday, Forest City Military Communities announced the completion of a decade-long military housing project to renovate and rebuild about half of the Navy and Marine Corps’ more than 6,700 housing units in 36 neighborhoods on Oahu and Kauai as part of just such a public-private venture with the Department of the Navy.
Forest City now manages them all. The project injected more than $1.6 billion into Hawaii’s economy, the Ohio-based company said.
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BY THE NUMBERS
Forest City Military Communities completed its housing project in a joint venture with the Navy.
>> $1.6 billion economic impact
>> 6,788 total units
>> 3,000 demolished and rebuilt
>> 1,500 renovated
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"From the start, our vision was to enhance the quality of life for the military family residents by creating high-quality, modern homes in welcoming neighborhoods that offer the finest in household amenities and community design," Tom Henneberry, president of Forest City Military Communities, said in a news release. "I’m pleased to say we were able to accomplish this by not only demolishing and reconstructing many new neighborhoods but also by heavily investing in and preserving the integrity of our important historic properties."
There have been growing pains.
Some residents have raised concerns about mold, security when their housing is not patrolled by military police, and dealing with a private company positioned between them and their military commands.
Questions have come recently about housing allowance levels — privatized housing companies collect the entire allowance as rent — and what happens when those rates go up or down.
Forest City addressed that fluctuation recently in a question-and-answer session with residents.
"The financial health of Forest City’s project relies solely on annual BAH (Basic Allowance for Housing) revenue to cover operating expenses and pay its debts," the company said.
For several years prior to 2013, stagnant Honolulu rental markets resulted in minimal annual housing allowance growth compared with projections as utility costs increased beyond projections, Forest City said.
Housing allowance increases in 2013 and 2014 are helping the project "catch up to where it should be," the housing company said.
The completion of the big project was commemorated in the Ulupau neighborhood on Marine Corps Base Hawaii and included remarks from Gov. Neil Abercrombie, a traditional Hawaiian blessing and an open house tour of two of the last housing units constructed.
A year ago Forest City tore down the last of the Marine Corps base’s dilapidated housing, including 1976-era townhouses in Ulupau.
"We are extremely pleased with the successful completion of the military housing project for Navy Region Hawaii and Marine Corps Base Hawaii," said Rear Adm. Bret Muilenburg, commander of Naval Facilities Engineering Command Pacific.
"We commend the dedicated team of professionals with Forest City Military Communities, the Navy and Marine Corps, for the significant time and effort that went into making this unique public-private partnership a complete win-win," Muilenburg said. "The newly constructed homes are a major improvement from previous structures, and we truly appreciate the hard work that has been invested in the quality of life for our sailors and Marines."
The Navy and Marine Corps’ initial housing redevelopment effort began in 2004, with the demolition and reconstruction of more than 3,000 existing units and the development of neighborhood amenities such as playgrounds for tots, multipurpose recreation courts, picnic pavilions, dog parks and walking trails.
In November another military housing milestone was marked with the completion of 1,208 new homes and renovation of 1,126 others by Hickam Communities at Joint Base Pearl Harbor-Hickam.
The development was undertaken by the Australian-based Lend Lease Group, which also has a $2.575 billion Army housing renovation project involving 7,756 homes, the largest Military Housing Privatization Initiative awarded by the Department of Defense.
