U.S. Navy service members revealed to the Journal their dissatisfaction with the Navy Housing Office and the way that office has kept them from renting the houses they want.
Two service members are so distressed they have written to their representatives in Congress.
For fear of legal retribution under the Uniform Code of Military Justice the service members agreed to speak freely with the Journal on their experiences but only under condition of anonymity.
The couple comprises a Navy officer and his wife who is also an officer. The couple has one child with another on the way.
The family had been apprehensive about coming to Guam after serving in the Middle East which the husband said had been “no walk in the park.”
“So far this has been horrible " the husband said. “We have had to stay in a hotel for 30 days — which we knew would happen — and all this time we have been looking for off-base housing. The island is beautiful and we know soon we will be able to enjoy it but the housing office won’t let us find a place we like.”
The wife said “We were told we are entitled to housing valued at $3 800 a month. That is my $1 900 of overseas housing allowance and my husband’s $1 900 a month — so we have been looking for a nice place preferably with large rooms and plenty of space around.” She said it seemed as if David Matthews Navy housing officer was not helpful. “You know we deserve it we have worked for it and well it’s our entitlement but there is this guy that keeps running us around. It’s horrible.”
The husband said “We found a beautiful home that will be our dream house for the two or three years we are here. My new child can be born and grow and the school is pretty close by for my daughter. Mr. Dave Matthews came in after we had turned the paperwork into the housing office. The rental price was right in line with the independent appraisal [$2 850]. Matthews told us we can’t trust the appraisers they are working with the homeowners to cheat us. So he said we could only rent the house for $2 500 —which was his estimate — and the owners needed more to cover their mortgage and improvements like special water tanks they had just installed."
The husband said his experience with the Naval Forces Marianas housing office was unique. “I could not believe what was happening because this had never happened to us in previous duty stations. Sure there was a housing inspection for safety but a housing office employee setting rent prices – that’s unheard of in this man’s Navy.”
His wife said “I have been in tears about this. I can’t believe those nice people — who we can tell love their house and really want us to live there – are trying to cheat us. I can’t imagine for what — a few lousy dollars? They live on Guam and so does the appraiser guy — I think something else funny is going on here.”
The husband said the Navy housing office has not approved one of the houses the couple has seen. “This has happened at two other houses we have looked at liked and had the appraisals and paperwork turned in on. All we needed was a signature from this Matthews fellow and we would be able to start enjoying our tour in paradise. But it has been hell so far because those were also turned down.”
The family is still in temporary Navy housing on base and has written to congressional representatives in their native state complaining about the problems they have had on Guam. The husband said “I don’t know if my letter writing is going to help. I named who was giving us trouble and why they weren’t applying our full entitlement because we want to be in a place that we feel comfortable in not something that we are forced to live in. I also sent it Federal Express so maybe it will get attention. At least our commanding officer is going to hear about this.”
Other stories abound. Helene A. Anderson Realtor with Pacific Blue Realty said enlisted Navy clients of hers had a slightly better experience. They came out of their house hunting with a signed lease for the price of the independent appraisal.
The couple had been house hunting for nearly three weeks and their temporary living allowance had nearly run out. They do not have children but their military jobs required they be near the Naval Hospital Guam Anderson said.
The two enlisted personnel demanded to see what operational order was being cited. They told Andersen “We have administrative experience and understand that everything in the Navy is written down somewhere so we demanded to see the instruction. After about a half-an-hour of page-flipping and book flopping the word came down ‘Just let them have it and let them go.’”
Anderson said a service member client of hers recently told her that Navy house-hunting rules have changed. “They are now being told you have 30 days to find an off-base house and that is it. If you don’t find a house then you have to live in on-base housing which they said everyone hates because it is not being maintained properly. The frustration with the service members is that during that 30-day time they are actively finding and negotiating for a place (turning in lease proposals and appraisals). But the housing office is not acting on them in that time frame and the service men and women are forced to accept something they don’t want.”
Anderson said that other clients told her “’We like Guam we like the people but the problem is with the Navy housing office.’ That is their beef.”
The Journal requested a direct interview with Matthews or to speak with him in a conference call with a member of the public affairs office staff monitoring the conversation.
Eventually the Navy agreed that Matthews would answer questions but only via the public affairs office of Naval Forces Marianas and questions were to be submitted to that office. The public affairs office transmitted the replies to the Journal. The Journal asked Matthews why it could not speak with him. The response was “Due to the sensitivity of this issue I want to ensure the information provided is accurate and complete."
The Journal asked why it appeared that the housing office was "setting" rental figures and why — even when the appraisal was higher than the requested rent the housing office was still demanding that the rent be lowered.
Matthews said “The Navy does not set rental prices. We look at the relevant data e.g. comparables appraisals etc. and determine the amount of overseas housing allowance the government will provide to a service member to defray the cost of off-base housing. Originally the government solicited the services of real estate agencies to assist in determining the intrinsic or Fair Market Value of rentals. However we soon realized that real estate agencies by definition have an advocacy role which is basically to ensure the highest price for their clients. Furthermore due to their commission schedule which is normally equivalent to one month’s rent real estate agents have a disincentive to reduce rental prices.
"We use local appraisers as a valuable tool to help establish FMV. We review appraisals for inconsistencies calculation errors and inaccuracies. Periodically we commission local peer review of appraisals. An appraisal is merely a subjective analysis put into an objective format; therefore we reserve the right to question them."
Bruce Dinsman is a licensed appraiser and owner of Pacific Island Appraisals. He joined the Military Affairs Committee of the Guam Board of Realtors. “In the long term Realtors have to understand if this guy [Matthews] is a major part of your market up-swing then you have to learn to deal with it. All we have ever asked is to sit down and talk with everybody and stick to business. In other words give us a set of rules and we all play by the rules.”
Tom Elliot a Guam appraiser and member of the Pacific Association of Professional Real Estate Appraisers said “We are required by law to follow strict guidelines in this work and shame on that office for thinking there is some sort of collusion taking place.”
The Journal asked Matthews "If the housing office is going to set rents why not save homeowners several hundred dollars and just do so – rather than insist they get an appraisal and then set the rent?"
He said "The Navy’s role is to be a good steward of taxpayer dollars and provide knowledgeable advice to the service member. As our database grows our need for homeowner funded appraisals should decrease."
As to the apparent difficulty of service members wishing to rent properties on Guam within the overseas housing allowance as compared to other areas where the allowance was similar Matthews said “It’s prudent to discuss a general definition of Fair Market Value which is often misunderstood. Some folks opine that FMV is merely a willing buyer and a willing seller. I propose a more accurate definition is that FMV involves a knowledgeable lessor who is willing but not obligated to rent and a knowledgeable lessee who is willing but not obligated to rent and no unusual circumstances.
“Most new arrivals to the island lack the knowledge and incentive to engage in meaningful negotiations; therefore it’s the Navy’s role to be good stewards of taxpayer dollars."
Matthews said the housing office has no appraisers on staff. He said he has been involved in the overseas housing program for about 15 years. "I have a real estate broker’s license for the Territory of Guam and have taken the requisite training and passed the state exam for my Hawaii real estate license. I attended 90 hours of appraisal training in San Diego but am not pursuing an appraisal license. Neither a real estate nor appraisal license is required for my current position. Members of my staff which consists of government employees and contractors have taken basic real estate training."
The Journal asked if Rear Adm. Arthur Johnson was "aware service personnel are unhappy about present limitations to their freedom of choice with regard to housing."
The response was "The admiral takes great interest in the off-base housing program to ensure service members acquire housing that meets the DOD criteria for suitability in terms of location cost and structural integrity. He is also concerned that junior enlisted personnel who receive fairly generous OHA are often displaced from desirable rentals because the system gravitates to the highest bidder. Mindful of the Navy’s role as a good neighbor on Guam he has expressed concern that inflated military off-base housing rental prices may have a negative impact on the ability of local residents to rent or purchase properties."
Henry M. Simpson general manager of the Guam Racing Federation is a homeowner and real estate investor. He has lived in Apra Heights since 1976 and has lived on Guam since 1967.
Simpson has had unsuccessful dealings as a landlord with the Navy housing office despite personnel wishing to rent his property. “I have a hard time believing that the whole military complex there doesn’t believe there are any honest appraisers on Guam. We are not being allowed to use these professionals whose business it is to compare investigate and provide us the rental values based upon their professional opinion. That is what they go to school study and test for – to become licensed appraisers.
Simpson said the Navy housing office is not above manipulation. “We as landlords know that they take advantage of those appraisals that are in their favor. We had a house that we rented for $2 600. It previously had rented for up to $4 200 a month. We rented it for the lower price only after the Navy had done their own appraisal. We did not get a copy of the appraisal document but we heard through the grapevine it was very much in the Navy’s favor at around $3 500. They would allow a military client to take the house at $2 600 because it serves their purpose to drive down the rental market.”
Simpson said the situation was unfortunate. “The whole mission statement Matthews has accepted is to stop fraud and abuse which is purportedly rampant on Guam. Well if in fact this is the case they most certainly have the means to go after those people. But I think they are using this excuse as a smokescreen to attack this rental market and I have yet to figure out what’s driving the reason behind this. All it is doing is hurting the military member and the legitimate taxpaying homeowners that are being painted with the same brush as those who have previously committed wrongdoings.”
Simpson said the Navy’s actions in degrading the appraisal system and not setting up a channel for conflict resolution was shameful. “I have many military friends that have said this issue is ultimately going to end up in court because the military will protect Matthews’ unprofessional behavior.”
However a theory is circulating that is making more sense each day Simpson told the Journal. “Property values are being driven down because several large contractors that follow the military around are looking for large tracts of land to build 200 to 300 unit housing for the military. This makes sense because an insider Navy friend of mine personally told me that a bunch of the legal guys got together with the admiral and Matthews was given his marching orders to drive down the prices of property on Guam.”
Closer relations between the real estate community and the Navy Housing Office may be on the way. Monty A. McDowell president of Advance Management Inc. and incoming president of the Guam Chamber of Commerce is himself a principal broker. He agreed to accept the inaugural chairmanship of the Guam Association of Realtors Military Affairs committee due to be chaired by Christopher Felix principal broker with Century 21 Realty Management Co.
The committee is set to meet on Dec. 16 to discuss the growing rift between homeowners the real estate community and the military. Matthews and Benjamin Hizon housing manager at Andersen Air Force Base are due to attend. McDowell said 20 people have already joined the committee. “There has been a lot of interest because it’s a really big market and it’s going to get bigger."
McDowell said he has seen how well the private sector and the Office in Charge of Construction have come to work together and learn from each other since early mutual meetings and hopes for the same result between the Navy Housing Office and the Realtors. “That’s the goal. I think the chamber and the Armed Forces Committee have set the ground work and the Guam Association of Realtors can ride that wave of camaraderie.” MBJ
