Military Homes, Civilian Developers

The sounds of construction echo about Ft. Carson, as new houses rise in a project the Army hopes is the answer to the 200-year-old problem of providing decent family housing to those who defend the nation.

The post--named for frontier scout Kit Carson--is the centerpiece of a Pentagon plan in which private companies use their own capital to develop, operate and maintain family housing--and turn a profit on the deal.

It seems to be working here, at the first military installation to turn over all of its family housing to a private developer.

Free of government bureaucracy, J.A. Jones Inc. of Charlotte, N.C., is moving quickly compared with the pace of traditional military construction.

In two years, J.A. Jones has built 204 townhouses and renovated 276 existing homes, most of which were built in the 1950s.

Under the agreement, the company will build, own, manage and maintain townhomes and single-family houses for the life of the 50-year contract, after which the Army owns the houses. The company takes the business risk, arranges financing and hires and manages contractors. The Army in turn leases the land to J.A. Jones and provides the company an assured tenant base and predictable income from housing allowances provided by the Army. The monthly allowance ranges from $681 for a private to $1,230 for a general at Ft. Carson.

“Everybody gets something out of the deal,” said Ronald J. Hansen, director of the Ft. Carson project for J.A. Jones. “The soldiers get better housing. J.A. Jones gets this great project.”

Over the first five years of the contract, signed in 1999, J.A. Jones will spend $229 million to build 840 units--729 townhouses and 111 single-family homes--renovate 1,823 units, and build a community center, all at no cost to the Army. Eventually, all the renovated units will be replaced with new homes over the life of the contract, Hansen said.

The only risk to the company is if Ft. Carson is closed. But under the contract, the Pentagon then would have to pay 80% of the company’s debt, Hansen said.

Congress authorized privatization in 1996. So far, a dozen contracts totaling 19,374 homes have been let. But the General Accounting Office, the investigative arm of Congress, says there are problems with the program.

Officials at Malmstrom Air Force Base in Montana allege that three-fourths of the houses built last year in a $31-million project had flaws ranging from sinking entrance stairways to shifting garage floors and sidewalks. The Air Force blamed the civilian contractor and the case may wind up in court.

In 1998, the government filed a lawsuit for what it called the faulty design and construction in 1990-91 of an 828-unit family housing project at Ellsworth Air Force Base in South Dakota. The Air Force declared nearly 500 of the units uninhabitable because of structural and design defects. The private developer subsequently agreed in an out-of-court settlement to pay $8 million and make repairs.

But at Ft. Carson, families living in the new units are happy.

“I love it here,” Linda Funkhouser, wife of Sgt. Marvin Funkhouser, said of the bright and roomy two-story townhouse. “I wouldn’t change anything.”