The Department of Defense's Base Closure and Realignment Commission (
BRAC) plans to close 20 military bases across the country by Sept. 15, 2011. Once a military facility closes, the ripple effect is felt throughout the surrounding communities: families lose neighbors, businesses lose customers and workers lose jobs.In this series of stories,DailyFinance looks at how closures have affected communities in the past, and what some military families and the businesses that cater to them plan to do once their base closes.
Tens of thousands of U.S. military personnel and civilian federal employees are packing up their belongings as the U.S. military's Base Realignment and Closure program (known as BRAC) goes into effect. BRAC not only calls for shutting down 20 major military bases around the country, but it also requires the shifting of some commands to other areas, all of which must be done by next September.
The moves will be jarring to several communities across the U.S., as some towns lose the bulk of their population and others make room for thousands of troops and their families. One of the most significant migrations will occur in the southeast, where the U.S. Army Reserve Command and U.S. Army Forces Command (FORSCOM) will leave Fort McPherson in Atlanta and head 325 miles northeast to Fort Bragg in North Carolina. According to North Carolina's BRAC Regional Task Force, the region around Fort Bragg is expected to see "additional gains of 40,000 military and civilian personnel and their families" over the next several years.
Merrilee and Rex Norman were among some of the first people to make the migration. The couple, who met while in the Army and now work as civilian information technology professionals with FORSCOM, were part of a "torch party" (pictured above) of the first 50 soldiers and civilians to move to Fort Bragg from Fort McPherson last month. They are the vanguard of about 3,000 people in their commands coming from Atlanta -- and just two of the estimated 22,000 civilian employees of the U.S. Army who are affected by BRAC.
The Pitfalls and Perks of Relocation Programs
Rex has been giving "mini-seminars" to his colleagues back at Fort McPherson on the Defense National Relocation Program (DNRP), which offers financial counseling, home marketing assistance and "a guaranteed buyout offer to purchase the employee's residence at the prior duty station." But even with government assistance, the decimated real estate market is working against them.
"They come in, appraise your house with a relocation company," says Rex. "In the end if they don't sell it through
your real estate agent, then the government will purchase it for you at the relocation appraisal price. In our case, it was about $40,000 below the fair market value of our tax assessment. It was an ugly price."
"Luckily, we get the guaranteed sale and luckily we were also able to find a buyer for our home before we had to take the offer from the relocation," Merrilee adds.
The program does have its perks, including a 25% pay incentive for the move, paid moving and temporary housing expenses and financed house-hunting trips to the new post. Despite the loss they took on their old home, Rex says the DNRP incentive package and the better mortgage rate they received on their new home in North Carolina has allowed them to break even on the move.
A Rude Awakening in North Carolina
Civilians relocating as a result of BRAC will face yet another obstacle once they arrive in North Carolina: qualifying for a home loan. Even though the Normans have a very good credit rating, they had to jump through several hoops to get a loan in North Carolina, says Rex.
"People who are making their mortgage payment every month in Atlanta, never missed a payment... got pretty good credit, they sell their home [and] think they're going to qualify for a loan," says Rex. "But they're going to find it's a different story, and I don't know if that word is getting out to people or not. I think it's just because of the housing market now and the state the market is now in."
When the Normans started shopping for a new home in the Fort Bragg area they discovered a real estate market they believed was overpriced. With the anticipated influx of new residents from Fort McPherson, many homeowners in the area appeared to have raised their selling price or were unwilling to negotiate -- an especially harsh reality for the couple after selling their old home at such a substantial loss.
"We searched and searched for a home," says Merrilee. "Some of these owners were just not willing to come off their prices. And I think they're going to start realizing the impact when all of us start coming into town And some of us have taken losses at Fort McPherson in Atlanta and they're just not going to take those high prices."
Weighing the Pros and Cons: Career Versus Lifestyle
Nevertheless, the Normans consider themselves lucky. Merrilee says the economy and the need for jobs is putting a strain on some of her colleagues and their families. "We know of a lot of people that are going to be coming [to Fort Bragg] as a bachelor or bachelorette," she says. "They're going to leave their home and family in Atlanta because they need that job. And they're going to come here and set up another household, whether it be an apartment, just so they can keep their jobs and lifestyles. They'll be the ones that cannot afford to sell the house." Some of the Normans' colleagues are even considering early retirement, rather than go through the financial uncertainty of relocating.
Despite all of the relocation challenges, the Normans remain upbeat about their new move. "You've got to realize, we're civilians with over 30 years federal service," says Merrilee. "A move is pretty traumatic and we were not wanting to go to Fort Bragg, but I'm pretty excited about it, coming into work every morning now. You see the soldiers out there in their uniforms running PT, we're reminded every morning as to why we have a job. The bottom line is the benefits were good, they helped us out with the lock on the home and we're here because we want a job and we love what we do -- and we want to stay and retire with the federal service."
Also in this series:
Military Base Closures and the Towns They Leave Behind
Denver's Lowry Air Force Base Defies the Odds
California's Castle Air Force Base Learns a Hard Lesson in Reinvention
A Maine Town's Long Recovery After Losing Loring AFB
Will Military Base Closures Mortally Wound These Real Estate Markets?