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Credit: U.S. Army
BIG BUILDUP. Of the more than 200 measures in the 2005 BRAC nationwide, 19 of them took place at Fort Sam Houston in San Antonio.
San Antonio, home to the Alamo, refers to itself as "Military City USA." So this Texas metro had a big stake in the Defense Department's $35 billion Base Realignment and Closure (BRAC) plan, which was signed into law in November 2005 and officially concluded on Sept. 15, 2011.
During that period, the Pentagon closed 182 bases, combined 26 others into a dozen joint bases and regions, and shifted 123,000 military personnel to new locations, 70,000 of whom were permanently relocated to the U.S. While no complete statistics are available, it's a safe bet that tens of thousands of government-employed contractors followed their jobs to new bases around the country.
In San Antonio, BRAC combined Fort Sam Houston's operations with Randolph and Lackland Air Force bases and consolidated five major enlisted military medical training institutions from across the country into Fort Sam. The federal government spent $3.4 billion to upgrade and expand Fort Sam Houston, and BRAC was projected to create 11,000 new military and contractor jobs locally. San Antonio's Military Transformation Task Force called BRAC "the largest economic development event in the city's history."
That base consolidation, through September, spelled more than $8.3 billion in positive economic impact for the city. But BRAC wasn't enough to keep San Antonio's housing market from taking a nose dive. Annual new-home closings there plummeted by 69% between 2005 and 2011, to 5,377 units this year, according to Hanley Wood Market Intelligence estimates. (Oddly, new-home prices during this period actually rose by nearly 17% to a median of $188,449.)
| New Home Closings in BRAC-impacted markets |
|---|
| MSA | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 |
|---|
| Bakersfield, CA (Naval Weapons Station) | 4,493 | 5,912 | 3,997 | 2,159 | 1,482 | 1,138 | 735 |
| Baltimore-Towson, MD (Aberdeen Proving Ground, Fort Meade) | 7,403 | 7,408 | 5,355 | 3,769 | 3,184 | 3,541 | 2,355 |
| Colorado Springs, CO (Fort Carson) | 5,441 | 4,829 | 3,108 | 2,062 | 1,417 | 1,546 | 1,170 |
| Columbus, GA-AL (Fort Benning) | 498 | 545 | 372 | 350 | 440 | 367 | 312 |
| El Paso, TX (Fort Bliss) | 3,894 | 3,960 | 3,420 | 2,843 | 2,763 | 2,664 | 2,091 |
| Indianapolis-Carmel, IN (Defense Finance And Accounting Services) | 8,268 | 7,458 | 5,549 | 3,621 | 2,397 | 2,296 | 1,518 |
| Richmond, VA (Fort Lee) | 5,285 | 4,351 | 4,237 | 2,946 | 2,063 | 1,729 | 1,289 |
| San Antonio, TX (Fort Sam Houston) | 17,747 | 21,409 | 17,889 | 11,887 | 9,276 | 8,163 | 5,377 |
| St. Marys, GA (Submarine Base Kings Bay) | | | 444 | 266 | 118 | 108 | 54 |
| Virginia Beach-Norfolk-Newport News, VA-NC (Naval Shipyard, Station and Support Activity | 4,411 | 4,547 | 3,976 | 3,045 | 2,306 | 2,064 | 1,647 |
| Greater DC-Va. (Quantico Marine Base, Fort Belvoir) | 31,626 | 26,606 | 20,309 | 12,835 | 11,995 | 11,085 | 7,182 |
Big Bang, or Whimper? The Department of Defense's recently completed base realignment was not enough to stanch the housing downturn in the bases' local markets, based on closings data in selected metros.
The same scenario appears to have happened in several other BRAC-affected markets (see chart above). Under federal law, forts and bases can house only up to 35% of their respective personnel on the premises. So it was logical, as bases and installations expanded, for builders to assume they'd see more customers. But most builders contacted say BRAC's impact on their sales has been modest to imperceptible.
"BRAC has been huge for Huntsville, and will continue to be a star because of Redstone Arsenal," says Michael Friday, owner of Woodland Homes in Alabama. He is referring to the U.S. Army installation, which as a result of BRAC created an estimated 10,000 direct and indirect jobs, with thousands more to come potentially, as Raytheon is building a $70 million missile plant at Redstone, and a fourth wing will be added to Redstone's Von Braun Complex.
But Friday says his company just hasn't seen the residual bump in home sales it was anticipating. "I think [BRAC] will eventually be good for builders, but not just yet," he tells Builder.
He's hoping to eventually capture some of the new arrivals who are currently renting. BRAC, say builders and developers in several markets, has been a boon to rental properties, as relocated military personnel are often reluctant to purchase a house when they could get shipped out to another installation or country, like Afghanistan, within a year or two. A number of the enlarged bases are, in fact, training centers that recycle personnel constantly.