On Wednesday, the US Army issued a statement regarding the recent issues affecting soldiers and families living in military housing.
It is in response to the joint hearing held on Capitol Hill by Senate Armed Services subcommittees on Readiness and Management and Personnel to examine the state of privatized military housing around the country following recent reports of sub-standard conditions.
Oklahoma Senator James Inhofe, Chairman of the Senate Armed Service Committee, started the hearing by explaining why on-base housing is privatized.
In the late 1990’s, on-base housing that was managed by the Department of Defense was in disrepair.
They privatized housing with the Military Housing Privatization Initiative (MHPI) putting their faith and trust in the private sector with the hope that they would give the military families a better quality of life while the contractors received fair compensation. Sen. Inhofe said that the fact is that our military service members deserve high quality housing, and one mistake is too many.
Recently, the Military and Family Advisory Network issued a survey to the 15,000 residents currently living in privatized housing across the country.
The survey resulted in more than 17,000 responses in just seven days. Of those, 45% responded a neutral or favorable privatized housing experience.
That leaves 55% of the residents who had a negative or very negative experience with their on-base military housing, and according to the panel, that is unacceptable.
Inhofe said that the committee will not be able to resolve the problem immediately but the hearing on Wednesday was just the beginning.
He acknowledged that reforms are needed to ensure accountability and excellence in on-base housing so the committee intends to work diligently on this issue.
The committee determined that they need to look at three things; they need to examine the care for the service members and their families, accountability in the contracting process and examine what, if anything, the chain of command is doing to address the families concerns.
Rhode Island Senator Jack Reed acknowledged that there is a real problem and said that everyone needs to acknowledge that reality.
He continued to say that everyone needs to work together to to find a solution and ensure that our military have the housing they deserve.
Sen. Reed said that the committee has received “scores of heartbreaking testimonials with equally disturbing photos of rampant mold, poor water quality, contamination with lead based paint, faulty construction in kitchens and other living areas.”
Sen. Reed added that generally, military housing has improved from where it was in the 1990’s when the program began.
However, twenty years later, Reed said, there is a clear disconnect between what has been promised by the contractors as permitted by the Department of Defense and the reality of what has been provided to the military families.
New York Senator Kirsten Gillbrand said in her opening statement that the contractors and their military partners are completely failing our military families and they are not responding to the crisis in an adequate or timely way.
She went on to say that by them doing this it is yet another example of corporate profits coming before the health of our military families.
The Military and Family Advisory Network compiled stories from many families who are now, or have, suffered with many if the reported issues. They concluded that, “the concerns of the families are ignored and the families are expected to tolerate these conditions.”
Sen. Gillbrand said that this is completely unacceptable.
The committee is obligated to ensure that the contractors are providing quality housing to military families. Reed emphasized that the hearing on Wednesday is the beginning of their job to make that happen.
Janna Warner and her family are currently living in on-base housing at Fort Meade, MD. Corvias manages the property at Fort Meade.
Wanner, the mother of a child born with rare genetic condition that causes both physical and educational issues. Her child is enrolled in the Department of Defense’s Exceptional Family Member Program. Wanner explained to the committee that the Department ensures that her child receives adaptive housing, proper medical care and educational needs through the EFM Program.
Wanner testified that five months before their PCS to Fort Meade they contacted Corvias because they needed, and requested, a single story home without stairs because of their child’s genetic disability.
At that time, Corvias assured them that they had plenty of time to provide them with a house they had selected, and Corvias committed to providing them.
Wanner explained that five days before they left their duty station heading to Fort Meade, after their household goods had already been packed up and delivery was scheduled for the new address, Corvias called to tell them that the house they had secured with a lease was no longer available.
The reason given by Corvias was that the family who was due to vacate the house was no longer moving out.
That left Warner with no other choice but to take a two story townhouse at a higher rental rate than they were initially quoted.
Once they moved in and in January when BAH rates increased, Corvias began taking an additional $177 disregarding their fixed market rate lease, all without the permission of Wanner, and without prior notice.
Once the Wanners provided Corvias with a copy of the Addendum showing the fixed rate lease to have the increased rent reduced, Corvias then informed them that they would renew their lease at the new rental rate despite their promise to keep them at the market rate.
The Wanner family also found mold growing around the toilet in their first floor bathroom and submitted a work order to Corvias for repairs. The initial work order went unanswered and the Wanners submitted a second work order. Two weeks later the maintenance crew responded and removed their toilet, leaving it sit in their laundry room for two days. Maintenance workers also pulled up the linoleum and flooring exposing extensive black mold growth.
For the next two days the mold was left exposed and the family remained in the home before maintenance laid new flooring over the improperly cleaned concrete and replacing the toilet.
Shortly after the repairs on the first floor bathroom, their second floor bathroom began showing signs of mold growing out of their shower wall. When Corvias maintenance addressed the mold the worker told Warner to, “let the mold just fall out. If we seal the area, the mold will just be trapped inside.”
The Wanner family still live with mold growing out of their bathroom wall and at this time, Corvias has not responded to their request to conduct an air quality test. That request was submitted more than two weeks ago.
In the report compiled by Military and Family Advisory Network concerning the housing issues and complaints, one Fort Polk family described their experience with Corvias.
The Christian Family at Fort Polk, Louisiana - Rachel Christian was pregnant when she and her family moved to housing managed by Corvias at Fort Polk. “I felt ill every time I was in the house,” she said. “The heat wasn’t working correctly, the HVAC wasn’t working, we had a leaking roof that Corvias would patch over part of in the kitchen, but we never found where the leak was coming from.” When they found mold, the Christians were told by Corvias to “spray some bleach and we will come paint.” Their son was vomiting continuously, and tests revealed levels of lead in his blood. The water came back positive for lead. Corvias told them to contact the water department. “Our son was diagnosed with autism,” Rachel shared. “There is a link between heavy metals and autism. He has severe GI issues and severe developmental delays. As soon as we moved, the levels of lead in his blood dropped to “0”. Our son, who was once diagnosed failure to thrive, began to gain weight as soon as we left Fort Polk. I hate myself for drinking the water. I constantly blame myself.”
Among other housing management corporations, Corvias founder and CEO, John Picerne, testified before the committee as well. In his opening statement he admitted that he and Corvias have let down some of their residents. “I’m sorry and we are going to fix it” he said to the Senate Committee.
He vowed to add additional staff to the neighborhoods and to reopen closed community centers. He said that Corvias is retooling their entire mold and mildew standards and policies and they are starting a major construction push.
While working with the Army and Air Force leadership he now has access to more than $140M of formally restricted funds and Corvias is investing $320M in new funds to start improving more than 2,600 homes in the Corvias communities.
Picerne and the other housing management leaders were asked if they were aware they had a problem with their on-base housing or if the notice to appear before the Senate Committee was a complete shock to them. Picerne admitted that he was aware that Corvias was having problems about nine months ago. He said they started peeling back the layers of the problems it became a bigger and bigger challenge. He said that with regard to the majority of the problems, Corvias does not have a systemic construction problem, they have a systemic maintenance problem. Furthermore, he said that he is committed to fixing the problem from here on out.
Massachusetts Senator Elizabeth Warren asked each corporate representative to verify if any of them have ever had the annual incentive bonuses completely withheld for their negative reviews. Each housing management corporation receives performance and review based incentives under their MHPI contract. Favorable reviews result in financial rewards to the corporation and some employees.
Several of the executives testified that they have had their incentives reduced but none of them have had the incentives completely withheld based on negative or poor reviews.
Sen. Warren then asked each corporate executive what their annual profit was, after explaining to the committee that from each BAH collected each month, a percentage of each house rent is reinvested in each base community and another percentage is allocated to an operating expenses fund and then another percentage goes into a reserve fund.
If a bunch of repair work needs to be done they are authorized by DOD to use funds from the reserve account leaving their profits free and clear.
Additionally, under the terms of each 50 year contract, the housing management corporations are guaranteed a return on their investment of 3-5% of each BAH collected each month.
Picerne said that Corvias makes a net profit of $12M-$14M annually.
Showing her disgust that these corporations are profiting from negative reviews for disgusting houses, Sen. Warren concluded her questions by stating that “this isn’t right”.
Arizona Senator Martha McSally, a former commander in the Air Force said that the conditions service members and their families are being forced to endure are disgusting. She scolded each executive saying that there are multiple layers of failures and she hopes that each of them are embarrassed. She then demanded that each of them start making changes immediately.
One possible penalty that was brought up by the Senate Committee that the families who testified agreed to was a system to withhold the BAH that is paid for the rent if repairs are not completed in a timely manner or if families are forced to endure unhealthy living conditions.
This hearing is just the beginning of what is going to be a long process. While the Senate continues to investigate the reports, they will try to come up with a way to improve the MPHI program and how to hold the private corporations accountable, all while hoping conditions change and the quality of military housing improve.
The statement issued following the Senate hearing by the US Army regarding military housing:
We are deeply troubled by the recent reports highlighting the deficient conditions in some of our family housing. It is unacceptable for our families who sacrifice so much to have to endure these hardships in their own homes. Our most sacred obligation as Army leaders is to take care of our people - our Soldiers and our family members.
We are fully committed to providing a safe and secure environment on all of our installations. We have directed an Inspector General investigation and have taken other actions. We will hold our chain of command and private contractors accountable to ensure they are meeting their obligations to provide safe, high quality family housing.
- Secretary of the Army Mark T. Esper and GEN Mark A. Milley