DATE: Tuesday, May 13, 1997                 TAG: 9705130266

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   41 lines

INCENTIVE CONCERNS DELAY MILITARY HOUSING AGENCY QUESTIONS THE OFFERING OF TAX BREAKS AND FEDERAL IMPACT AID.

A Defense Department effort to promote construction of military housing by private developers has been slowed by concerns about the incentives offered to developers, the head of the program said Monday.

The Office of Management and Budget, the agency that oversees the federal budget, has raised questions about the tax breaks and federal impact aid available under the program, said Robert Meyer, director of the Housing and Revitalization Support Office in Arlington.

``Right now, they feel we're bringing too much in subsidies to the table,'' Meyer said at a daylong conference on housing issues in South Hampton Roads.

Meyer's office has been examining the housing needs at military bases and devising alternatives to having the military build and maintain its own housing units. The alternatives include the use of limited partnerships, leases and guaranteed loans, Meyer said at the Second District Housing Conference '97, sponsored by U.S. Rep. Owen Pickett (D-Va.).

``This is very much a prototype program,'' he said. ``We're trying to determine what works and what doesn't work.''

The goal of the Housing and Revitalization Support Office is to get housing from private sources for one-third what it would cost the military to build, Meyer said.

Construction of the first project in the new housing program - a $31 million complex at the Corpus Christi, Texas, Naval Air Station - began earlier this year. That project involved a limited partnership with a life of 10 years and an option for another five, Meyer said.

One of the projects under study by Meyer's office is a replacement for Carper Housing, a Navy townhouse complex in Virginia Beach that was demolished in 1995.

Housing for military families is particularly important for the Navy in Hampton Roads because almost 63 percent of its personnel in the region are married, said Betty Bates, head of housing at the Naval Facilities Engineering Command's Atlantic Division. At many Army and Air Force bases, the percentage of personnel is 50 percent, she said.

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