Thursday, November 01, 2007

Getting (and Giving) an Earful

Major General Charles J. Dunlap, Jr., the Deputy Judge Advocate General of the Air Force. In an op-ed in the current edition of Air Force Times, General Dunlap strongly criticizes the Pentagon's "privatized" housing plan, calling it a "long-term risk to the Air Force way of life." Such candor from active duty flag officer is rare, to say the least. (USAF photo).

There was a "town hall" meeting at Little Rock AFB, Arkansas on Monday night. The event served two purposes: first, it allowed the commander of Little Rock's host unit, the 314th Airlift Wing, to brief airmen on the base's recently-failed, privatized housing venture. And, in return, the wing's senior leadership got an earful from angry airmen, who voiced their displeasure over the project's collapse.

What we know about the town hall meeting is based on an Air Force Times article from reporter Erik Holmes, who covered the event from his office in Washington. Mr. Holmes managed to interview Brigadier General Rowayne Schatz, Jr., the wing commander who fielded complaints from upset airmen and their families.

Schatz tells the Times he convened the meeting to "to report progress in getting the project back on track by selling it to another developer and to address airmen’s questions and concerns."

The Little Rock project is one of four Air Force private housing ventures that have failed in recent months, amid a wave of unpaid bills, unfinished construction work and litigation. Each of the projects was developed by American Eagle Communities, a partnership between developers based in Connecticut and Louisiana.

Under terms of a contract awarded three years ago, American Eagle was supposed to produce 150 new homes and 400 refurbished units by late 2007. However, only 23 new homes and three refurbished units have been delivered so far, according to General Schatz. Work on the project was halted in May and earlier this month, the developers defaulted on $12 million in bonds used to finance construction.

With the private housing project now on hold, a number of Little Rock airmen (and their families) are still living in dilapidated, 50-year-old base housing units with pest and cooling problems, among others. The prospect of remaining in sub-standard quarters has raised the ire of base personnel, and they vented their anger to General Schatz.

“People were pretty vocal about some of [the] issues that come with trying to maintain 50-year-old homes,” he said. “Until we get those homes recapitalized, we’re going to continue to have those problems.”

The Little Rock media apparently took a pass on covering Monday's meeting, so (for now) we're left with General Schatz's version of what transpired. While we don't doubt the veracity of his account, it would have been interesting to be that proverbial "fly on the wall" at Monday's meeting and watch the exchanges between angry base housing residents and the host wing commander.

However, Schatz deserves some credit for at least facing the music; there have been no reports of recent town meetings at Moody AFB, GA, Hanscom AFB, MA and Patrick AFB, FL, where similar developments, managed by American Eagle, have also failed, leaving some military families in the lurch.

Still, there was little in the way of good news for participants in the forum at Little Rock. While Schatz told the audience that "two or three other developers" are interested in taking over the project, he admitted that it will be next summer (at the earliest) before construction could resume.


Interestingly, the current print edition of Air Force Times has a fascinating op-ed from Major General Charles Dunlap, Jr., the service's Deputy Judge Advocate General. In a commentary entitled "Hidden Dangers," General Dunlap warns that the private housing scheme could have a number of unforeseen--and potentially--dangerous consequences.

A few excerpts:

"Is housing privatization the unqualified savior some seem to think? It is tempting to say so because it has produced new or refurbished housing at certain bases.

Yet at Moody AFB, GA; Hanscom AFB, MA; Patrick AFB, FL; and Little Rock AFB, AR, privatization is foundering. Perhaps more important, however, privatized housing may present a long-term risk to the Air Force way of life. The challenges are quite real and we need to deal with them directly.

A hard truth: Huge corporate developers, driven by profit, dominate privatization deals. That free-enterprise philosophy is fine for civilian businesses, but not so fine for building a military ethos that serves interests other than the corporate bottom line.

Privatization can transform a focused military community with a distinct culture and unique mission into an enterprise largely governed by commercial interests and values. Command has limited control over the developers' activities. Among other things, developers can fill houses with renters who have no military connection--which has happened at several bases.


Privatization originated in the rather cynical pre-9/11 belief that the American public would not pay for decent housing for its military families. It hands over to private contractors hundreds of millions of dollars' worth of taxpayer-funded housing for little more than promises to provide what the developer imagines is a suitable military housing environment.


More troubling are questions as to how privatization is supposed to generate both profits for the government and savings for the Air Force. Does it involve transferring expenses previously borne by the government to the backs of airmen? Quite possibly.

Energy bills are Exhibit 1. Yes, some will scrimp and "make money" on [energy bill] rebates. Consider, however, the impact on the most vulnerable part of our population: young airmen with large families who cannot turn the heat down as others might. And privatization can impose deposit expenses and other costs.


"...The complex process of crafting an environment that helps human being sustain the stresses and sacrifices of military service demands building a martial culture, not a corporate one. Assuming that creating a military community is nothing more that a business deal about rental property grossly underestimates the intangibles needed to support warfighting professionals and their families."

We should point out that General Dunlap has a reputation as an independent thinker. A few years ago, while serving as the senior legal officer for Air Combat Command, Dunlap authored a briefing on the future of warfare that asked pointed questions about the utility of $130 million fighters in conflicts with insurgents and terrorists.

Yet, there is something remarkable about Dunlap's commentary. It is rare for a senior officer to break with DoD on a program--in this case, housing privatization--that is long-established and trumpeted as a success. As an attorney for more than 30 years, General Dunlap knows a little about contracts, and it's clear that he doesn't like the deals made by the Air Force and private developers. Particularly telling are his observations about the service letting developers "define" a military community, and the Air Force's willingness to exchange millions of dollars in housing contracts for vague promises from commercial firms.

We can also assume that General Dunlap's commentary went through some sort of approval process prior to publication. Active-duty two-stars in high visibility positions simply don't fax or e-mail an op-ed to their magazine of choice without "running it up the flagpole first," particularly if they have an interest in keeping their jobs. At a minimum, we'd guess that Dunlap's op-ed was reviewed by his boss (the Air Force Judge Advocate General), and possibly the Vice-Chief or Chief of Staff.

Their willingness to let General Dunlap publish a sharp indictment of a key Pentagon privatization scheme speaks volumes, too. Senior leadership is very aware of the debacles at Moody, Little Rock and other bases. They understand that DoD granted gave developers too much latitude in private housing projects, and they fear the potential impact of "commercialized" military communities on morale, cohesion and security.

While the op-ed was authored by a single, senior JAG officer, we're guessing that General Dunlap's sentiments are shared by other flag officers. If that's the case, then it's time for them to speak up, and persuade the Pentagon to rethink its privatized housing program.


ADDENDUM: At his town hall meeting in Little Rock on Monday, Brigadier General Schatz reported that the "demand" for base housing at his installation has actually decreased, with more personnel apparently opting to buy their own homes. That means the contractor who inherits the mess in Little Rock will have to build or refurbish fewer homes, and (hopefully) some of the angry airmen can move into new quarters a bit sooner.
But General Schatz's revelation also confirms our belief that home ownership may be the best answer to the housing problem. Median home prices in communities surrounding the Arkansas base are below the national average, and a plan to support home buying could be cheaper and more efficient that the failed privatization scheme.

1 comment:

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