Determining the financial feasibility of privatized military housing initiatives with DSS-delivered quantitative models

The armed services must provide their personnel with acceptable housing at minimum cost within the vicinity of military installations. To help achieve these housing objectives, the Department of Defense (DoD) has entered into experimental joint ventures with private developers to construct attractive housing on military installation property. To support the analysis of the joint ventures, the DoD needed quantitative models that would help officials evaluate the feasibility of the housing projects. A decision support system, called the Housing Revitalization Support Office System (HRSOS), has been developed to deliver the necessary models. A key component of HRSOS is a collection of econometric, project occupancy, and simulation models that determine a project's financial outcomes. This paper describes the models, their role in the joint venture evaluation process, and the decision support system used to deliver the analyses and reports to DoD officials. The paper also presents the benefits from using the model and discusses the implications for public finance and military housing management.