BRAC Update 

What is BRAC?

The final 2005 Base Realignment and Closure (BRAC) Commission report became law on November 9, 2005, and its recommendations are to be executed no later than September 2011. Maryland fared exceptionally well, gaining an estimated total of more than 60,000 federal and private sector jobs through time, most involving high technology and paying exceptionally well. The BRAC results represent the largest single employment growth activity in Maryland since World War II and will continue to underpin Maryland’s movement toward a more stable and increasingly knowledge-based economy. The two areas gaining the most BRAC jobs are Fort Meade (approximately 5,717 on the base) and the Aberdeen Proving Ground (a net of 9,176 on the base). Contracted support of these jobs raises the total impact considerably, and in the case of Fort Meade additional non-BRAC on-base growth in excess of 7,000 is expected. The National Naval Medical Center at Bethesda is expected to grow by approximately 1,400 positions, and approximately 400 new jobs will be added to Andrews Air Force Base.

Will BRAC be a blessing or a curse?

BRAC will add a million dollars to the local economy of Anne Arundel County in addition to the $4 million Fort Meade and the National Security Agency (NSA) already contribute. BRAC provides economic opportunities and blessings if we are prepared for what is to come in the next several years. BRAC can also just magnify many of the problems we are already facing. Areas of concern include housing, transportation, health care, workforce education and public safety.

How will BRAC impact HOUSING?

BRAC will increase development pressures in the Baltimore Region. The Maryland Department of Planning (MDP) expects a total of 28,176 new households based on the assumption that there will be 2 households for every 3 jobs. The majority of new households will be generated from the expansion at Aberdeen Proving Grounds (APG) 14,159 or 56%. The bulk of the rest of the households will be associated with new jobs at Fort Meade 10,679 or 42%. Approximately 474 households (1.9%) are associated with new jobs at Andrews Air Force Base. MDP expects that approximately 3,500 (14%) of the new households will be renters, with the remaining portion homeowners. Of the 25,312 new households, 13,549 (54%) will look for housing of higher cost/quality, 7,189 (28%) will look for housing of medium cost/quality, and 4,573 (18%) will look for housing of lower cost/quality. Without some form of workforce housing legislation, developers will continue to build mostly higher cost/quality homes addressing the needs of only half of the families in need of housing.

The Maryland Department of Planning expects new household totals to be distributed in the region as follows:

Development pressure will be greatest in areas where the demand represents a significant percentage of the total houses available including new units and turnovers of existing units between 2009 and 2015. The areas of highest concern are Harford Co. (36.6%) and Cecil Co. (29.9%). BRAC will create a demand for one third of all of the houses available in those counties. Baltimore City (13.8%) and Anne Arundel Co. (12.0%) will also experience significant development pressure. In these areas housing cost could be pushed even higher. Development pressures in these areas could create more urban sprawl, which will adversely affect the environment and especially the Chesapeake Bay. All the more reason to get started before the housing crunch hits!

Transportation

BRAC households (97%) will seek to locate within a 45-minute commute to work. Highways that provide access to Fort Meade and Aberdeen Proving Grounds will need to be widened and improved in order to handle the increases in traffic without lengthy traffic jams. The cost of these improvements will involve a mix of Federal, State and local funds. Because military bases do not pay property taxes or impact fees, the local government may have to carry a larger tax burden to prepare for BRAC. The Maryland Department of Transportation does not have the funds necessary to make all of the needed improvements.

Workforce Education

Occupations moving to Maryland because of BRAC include: Budget analysis, Computer science, Operations research, Electronics engineering, Computer engineering, Computer science engineering, General engineering, Telecommunications, Information technology management, Inventory management, Contracting, Logistics management, Financial administration, Financial management, General supply, Management and program analysis, Program management, Miscellaneous administration, Human resources management, Human resources assistance, Data transcriber, Equipment operator, Management and program clerical and assistance, Secretary, Supply program management, Technical writing and editing, Telecommunications, Mail and file. 95% of these positions will require at least a Bachelor’s Degree or other education beyond high school. Most positions will require a security clearance. BRAC will be a blessing for those with the proper education and a security clearance. If you do not have a security clearance, it could take some time to go through the process. Preference will be given to those who already have a clearance.

Adequate Public Facilities Ordinances

Adequate Public Facilities Ordinances, or APFOs as they are commonly called, are designed to assure that public schools, roads, sewers, water for fire fighting, police and rescue response times and/or other infrastructure or services are “adequate” to support proposed new development. Impact fees from new developments of houses are supposed to provide revenues for the construction of needed schools, road improvements and extension of sewer and water services. Where schools are filled to capacity, a moratorium has been placed on new housing for families. Then developers have been able to build senior housing for couples 55 and over. APFOs can put pressure on developers to build in more rural areas of the region where there maybe school capacity but resulting in unintended sprawl. The intent of APFOs is to concentrate development in suitable areas. If schools near Fort Meade and Aberdeen Proving Grounds and full to capacity, development may be pushed further away from where the jobs are adding to commuting times and traffic congestion.   Families moving to the region may decide to live where the public schools have a good reputation and high test scores. A Magnet school is being developed in Anne Arundel County to encourage interest in fields such as engineering and science. BRAC could be a blessing if new quality schools are built and existing schools are improved because of the need for more people in the workforce with higher levels of education. BRAC could also be a curse, if public schools are used as a barrier to new housing being built in an area.

What Does This All Mean?

For the purposes of buying or selling a home in the Baltimore region, we currently have a large supply of excess inventory. Inventory levels have created a market favoring the likes of buyers. Interest rates are near record lows and with much supply to choose from, values have softened creating great opportunities for buyers.

With the influx of BRAC schedule to begin in 2009 and max out in 2014, owning a home in the Baltimore region will be continue to be a safe investment. As the supply of homes begins to decrease, values will begin to climb. Nationwide, real estate has averaged a 6.9% return on its investment over the last 40 years. We look forward to helping individuals and families with their most important financial purchase, their home! Send us an email and let us know when you plan on relocating, and we will key you in to all the right areas!