Opening Statements

Today, Rep. Doug Lamborn (R-CO), Ranking Member of the House Armed Services Subcommittee on Readiness, made the following remarks, as prepared for delivery, ahead of a hearing titled, "Privatized Housing: Are Conditions Improving for Our Military Families?"

"Thank you, Chairman Garamendi. Today we will hear testimony from five of the companies that make the privatized military family housing model work. As someone whose district is home to almost 48,000 military members, and like the Chairman, I have been deeply troubled by the lack of oversight of this program. Our military families deserve better.

"Our committee has heard significant concerns about insufficient mold remediation and terrible customer service at numerous military installations—most recently at MacDill Air Force Base Florida and Fort Belvoir. We are not going to address them today, but there also have been allegations of fraud in a few extreme cases.

"According to a survey released earlier this year by the Military Family Advisory Network, 63% of Fort Carson respondents 'said their units needed better maintenance, repairs or remediation.' The committee has heard horror stories about mold, rat infestations, and what could generously be described as poor customer service.

"The military housing privatization initiative began as public-private ventures (PPVs) in 1996 as means to modernize family housing, improve efficiency, and grow reserve accounts for future investments. Oversight of the program is challenging because each military department manages their programs differently and the respective projects are governed by unique legal agreements.

"The Army has a total of 35 projects, the Navy and Marine Corps have 15, and the Air Force has 32. Oversight is further complicated for Army and Navy projects because they are partners with the developers in limited liability companies with both sides investing capital.

"My sincere hope is that the attention that military family housing has received over the last year has served as a wake-up call to both the military departments and to the housing partners. We need this model to work, but not at the expense of military families. Every dollar wasted through mismanagement or incompetence diminishes the long-term viability of the reserve accounts that are vital for future recapitalization.

"The House and the Senate both passed significant bi-partisan legislation in their defense bills this year, and I look forward to enacting meaningful reform. First and foremost, among these will be a Tenants Bill of Rights.

"The military departments have an inherent responsibility to provide oversight for these projects. A recent Air Force IG Report found, 'a pervasive misperception that when housing was privatized it was effectively outsourced… leaders at many levels did not actively engage as they might have on other issues... based upon misunderstanding of their authority.'

"We have heard from Army families that some installation commanders characterize the government as the weaker, or 49%, partner in these housing agreements—implying they have limited means to address shortcomings. Oversight is inherently governmental, and it is not optional.

"On some installations there is confusion regarding the identity of the installation housing office and the office of the housing partner or third-party management company. It should be crystal clear to a family whether they are speaking to someone representing the installation commander or to a representative of the housing partner.

"We must simultaneously reform while preserving the financial footing of the privatized housing projects. A 2018 GAO report highlighted found that 'the military departments vary in the extent to which they use measure of future sustainment needs and funding to assess project sustainability.' I am beginning to question the wisdom of the fiscal waterfall and why the recapitalization accounts are only paid after PPV management partners and bondholders are paid.

"I look forward to learning more from our witnesses about their perspectives on the program overall, the actions they have taken to address any health and safety concerns and to improve customer service. We would also appreciate their thoughts on improving the overall the program.

"Thank you, Mr. Chairman. I yield back."