Since December 2011, the steady return to a garrison lifestyle from deployment has presented many unforeseen challenges to U.S. troops. Among them is the transition from a high-paced, high-adrenaline deployed environment to a slower, less exhilarating home station routine, but other unexpected consequences are now beginning to impact soldiers and their families.Some garrisons are concerned by potential impacts to privatized housing. Senior Army officials working with private housing companies report that within the continental U.S., family occupancy has been averaging around 94 percent. As the need for active duty, National Guard and Army Reserve soldiers lessens and the total Army becomes smaller, that percentage rate may drop. This number varies greatly from installation to installation. Some even recorded increased numbers of unoccupied units.The Residential Communities Initiative (RCI) project at Fort Knox, Ky., currently has approximately 2,500 housing units in its inventory. By the end of the year, about 1,500 of these are projected to be occupied by families of active duty soldiers. Since the June 2013 inactivation of the 3rd Brigade Combat Team, 1st Infantry Division, the public-private partnership between on-post housing and Actus Lend Lease, known as Knox Hills LLC, has been doing everything possible from an operating standpoint to manage the Knox Project and meet housing requirements. One initiative is to offer a $500 signing bonus through the Refer a Friend Campaign. Once a “qualified” friend signs a 12-month lease, the current resident receives $500 off a month’s rent. Several privatized partners at other installations have offered similar programs.RCI projects such as Knox Hills are designed to be self-sustaining through cash flows generated by rental operations. A risk mitigation tool incorporated into all RCI projects is a priority sequence of permitted tenants who are not active duty, Army Reserve or National Guard soldiers. This tool, called the tenant waterfall, can be used should occupancy challenges occur. Inclusion of the tenant waterfall was a vital element for the Office of Management and Budget and the private-sector capital markets. The priority list ranks and categorizes groups into tiers, with key and essential military personnel at the top and retired military personnel, federal civilians and the general public at the bottom.The Army continues to investigate the overall risk mitigation tools available for RCI projects when dealing with unforeseen challenges that impact financial viability.As per DoD policy, “Active-duty military personnel and their families authorized to reside on the installation are target tenants for privatized housing. However, as part of the privatization initiative, if the occupancy falls below expected levels, housing will open up to a priority placement list of Other Eligible Tenants (OET).” At the lowest level of eligibility, this does include the general public. This process involves detailed due diligence conducted by the privatized partner and submitted to the garrison commander for final decision on whether to allow the general public to reside in a house on post.Military families, however, may express concerns when a potential neighbor could be a family with no military ties. “It is not a question of safety. It is an issue of potentially introducing an element to the military way of family life that may interrupt the discipline and tradition of such. If this is something the bases do, then it should be offered to retirees, combat-wounded families and prior military only. It is a way of life that they understand that a civilian family may not,” said Zona Ash, an Air Force veteran and military spouse.Leasing to civilians is not the intent or a priority among privatized housing officials and partners. The prime focus is on the long-term sustainment of current units and project development for the future. Faced with the possibility of a reduction to 1990 levels of Basic Allowance for Housing (BAH) rules, which covered approximately 80 percent of rental costs, privatized housing rental rates will take a significant hit.Under the military family housing privatization initiative, most family housing on installations is now managed by private companies. Soldiers receive a monthly BAH, which is immediately transferred to the privatized housing project through an allotment if the service member chooses to live on post. This monthly revenue stream covers rent, utilities, repairs and maintenance, and renters insurance. A portion of that BAH is also sent to a reinvestment account that is held in reserve for future sustainment and development projects.When needed, opening privatized housing to civilians is a positive action not only for the project but also for all families living in that cluster of housing. Adding civilian residents ensures that the cash flow continues into that project. Those dollars directly benefit the soldiers and families in housing by allowing for continued services to be provided. Without the additional cash flow coming in, services will potentially be cut.Army officials continue to work with private partners in order to mitigate potential reductions, focusing on ensuring stable operations and sustainment of the housing. Officials will stay engaged with all stakeholders and U.S. Army Installation Management Command to identify workable/sustainable solutions on a project-by-project basis.