The private-sector companies that manage housing on U.S. military bases have been under fire ever since media reports last winter about problems like mold and poor maintenance, and Congress is considering reforms.
Now one of the companies — which operates the housing on Fort Bragg and a dozen other installations —has unveiled an unusual plan it says will help, and could be a model for the other companies.
John Picerne, the founder and CEO Rhode of Island-based Corvias, says he and a group of lenders are financing $325 million in major renovations and utility upgrades to about 16,000 homes on seven Army bases.
And, he said, the program will pay for itself: Corvias will be able to pay off the lenders from the savings that will result.
“So we have an estimated $300 million in savings over the next 30 years in energy efficiencies and a portion of that, and I think it'll be more than $300 million,” Picerne said in an interview. “Obviously, more predictive maintenance is far less expensive than emergency maintenance."
Troops who don’t live in barracks get a housing allowance. Most use it to live off base, but for those who use base housing, the allowance goes to companies like Corvias.
It covers all housing and utility costs, and in some cases, with older houses, Corvias charges less and the troops pocket the difference.
Picerne says that a few years back, reductions in the housing allowance hit his company at the same time the Army was shrinking by thousands of troops after the peak of the fighting in Iraq and Afghanistan.
Occupancy rates fell, the company's income fell, and he said it made a mistake by scaling back its spending on renovations.
“And once you kind of take your eye off that ball? Now you're playing catch up,” he said. “And I think what we're doing here by making this large investment is trying to get ahead of the curve again, instead of always playing from behind the game.”
The installations where the program will pay for upgrades are: Fort Bragg in North Carolina; Fort Meade in Maryland; Fort Riley in Kansas; Fort Rucker in Alabama; Fort Sill in Oklahoma; Fort Polk in Louisiana; and Aberdeen Proving Ground in Maryland.
The company also manages housing on several Air Force bases but they’re not part of the new program.
When the companies began taking over management of the housing in the mid-1990s, the homes they began managing were often in poor condition.
They’ve since torn down some of the older homes and replaced them with new houses, including many on Bragg.
But much of their stock of tens of thousands of homes is older. That can makes maintenance a losing battle, Picerne said.
“When you're dealing with a home that's 50 years old, and hasn't received enough attention in modernization over the last 50 years, then you you can't maintain that through a maintenance program, you have to invest into a capital repair or capital approach to that to to upgrade that home,”he said. “Otherwise, forever, you will be doing just that emergency Band Aid-approach fixes.”
The new program, he said, is a start on those major upgrades.
Heather Fuller works for Corvias at its Fort Bragg office, and on a recent day she accompanied a reporter on a tour of one of the homes the company manages.
The vacant brick ranch-style duplex in a neighborhood of similar homes was clearly an older home, but didn’t show significant wear and tear.
It looked like is ready for someone to move in.
But the inside is about to be gutted and completely renovated with the new funding.
“It's just dated, so the tiles in the bathrooms, they're small,” she said. “They're like, built in 1960s. So we're renovating and making those larger. And we've taken some of these floor plans and added a bedroom, so that it would have four bedrooms rather than the three.”
A total of 280 homes on Bragg are getting the same treatment, while several thousand more will get new heating and cooling systems and other improvements.
Similar upgrades will be done other Army bases where Corvias manages housing.
Part of the plan is to install computerized controls that continually collect information on things like the heating and cooling systems, which could help the company know when maintenance is needed before expensive repairs are required.
The number of troops is up again, which is helping, Picerne said.
One Bragg resident, Diane Woodrell, agreed to meet a reporter at the home that will be renovated. She said the benefits of major remodeling like that aren’t just about getting the company back on track, they’re a plus to Army families like hers.
“So for me, as a military spouse and going to live on base, if I'm being told by any military housing person, that hey, you know, we've got homes that we have literally just renovated, I want to snag up on that,” she said. “Either tell me it's been renovated, or hey, we've got brand new construction, and I’d have zero worries on anything on that. … no mold issues, no bug issues or anything like that. Like, you've cleared out every issue there could be.”
She said she’d have no problem living in the home that was about to be renovated, though she’d still prefer the two-bedroom home nearby, where she lives with her husband and their 4-year-old son.
It is not going to get the major renovations, because it’s not old enough, but it is old enough that they pay less than $900 and get to keep the rest of their $1100 housing allowance.
Woodrell volunteered to serve on a resident advisory group that was formed to give Corvias feedback on what it can do to improve.
She said the company had treated her family well, even moving them into a hotel room quickly while it checked on a gas leak, which turned out to be a relatively minor problem with the stove.
Her family has never lived off base at any of its posts, she said.
“Being on base has its perks,” she said. “We don't pay for electricity, we don't pay for water. I don't have to worry about giving a rent check to a management company every month, they take care of it by taking it out of my husband's paycheck every month. So I mean, no pay for electricity, not paying for water is a big perk.
I also have a swimming pool that is in my neighborhood, so I can take my kids to it as many times as I want. I'm not paying for the swimming pool. We have a community center that's got a few little things in it for the kids that they can go and play and do.”
Many military families in Corvias housing and with other companies have complained about maintenance requests that are ignored or badly handled.
Several, in fact, testified to Congress about problems with their homes, the management companies and military officials on bases who didn’t bring enough pressure to bear on the companies.
Woodrell said that in her experience, maintenance issues at Bragg have are quickly dealt with.
“Like, it's a phone call to get it taken care of,” she said.
Corvias’s new approach might start a trend: Picerne said some of the companies that manage housing on other bases have asked him for advice.
The new program is unrelated to hundreds of other teardowns, new home construction and renovations that the company already had planned as part of the normal cycle of its long-term agreement with the Pentagon.
A Corvias spokeswoman said the exact numbers at each base aren’t pinned down yet for the next round of that regular work, but that at Bragg, 160 homes will be torn down and 95 new ones built.
Picerne along with several leaders of other military housing companies, testified at that Senate hearing earlier this year. There, he apologized for what he admitted were unacceptable conditions in some of the housing.
He said in the recent interview that he felt like things were getting back on track now.
“What was what was difficult for me — as a primary owner, it's very personal to me, obviously — what was difficult for me to realize is ….being faced with this and some of the data that was coming out, and saying, wow, we really did go backwards,” he said. “We used to be the absolute gold standard to how this program ran… customer satisfaction, and so forth, we believed we were at the gold standard and when you look at all the data, that was supported.
“So we definitely had gone backwards, and we needed to move back forward. So what we have done, is tried to align where the missing parts were, what was needed to add back.”