The single-wall construction is so thin that the pointy ends of the nails that Whitt pounded into the walls to hang pictures on have come out the other side, visible outdoors.

"Considering the age of the homes, it's in good shape," said Whitt, who moved into the house in May with his two daughters, ages 6 and 4. "If I had to stay in it another three years, that wouldn't bother me and it wouldn't bother my children, either."

But the Navy and its civilian partners broke ground today on the first of 1,948 new homes in McGrew Point, Halsey Terrace and Radford Terrace. The groundbreaking represents the beginning of work that could eventually expand to $1 billion covering a total of 7,300 Navy, Coast Guard and Marine Corps homes on O'ahu.

The groundbreaking also represents the first of separate construction projects to build and renovate another 7,800 Army homes and 1,356 for the Air Force.

The so-called privatized military projects replace the old military way of building and renovating homes around the world.

Since 1996, the Pentagon has been diverting officer and enlisted housing allowances into developers' hands so they can get projects launched sooner. The private developers are then responsible for collecting the housing allowances and managing and maintaining the homes for the following 50 years.

Under the old system, the Department of Defense estimated it would take 30 to 40 years — at a cost of $30 billion — to upgrade the 168,000 military homes around the country that have been deemed "inadequate."

Now O'ahu has become the site of one of the biggest privatized projects of its kind and the work is expected to drive Hawai'i's construction industry over the next decade.

For Navy military families such as Whitt's, the promise of new, modern homes also represents peace of mind while their country is at war.

"Having a good, safe home for your family to live in while you're on deployment is a must, a priority and a significant quality of life issue," Whitt said.

Like Whitt, Chief Warrant Officer Don Hamilton, his wife, Bridgette, and their three teenage children also love their 44-year-old home in the Navy's Halsey Terrace for senior enlisted sailors and officers.

It's right next door to tired-looking homes that have been vacated to make way for new ones. On the other side, where people still live, one of the Hamilton's neighbors hung a sign that reads, "Free Weeds Pull Your Own."

Although they'd be happy to stay in their older house, Hamilton — the electronics material officer for the guided missile destroyer USS O'Kane — would be happier knowing his family was living in something brand new.

"When I'm out to sea, I don't want to worry, 'Does the house need a new roof?' " he said.

Hamilton moved into the four-bedroom, two-bath house on June 2 and is on the list for a new Navy home. He and Bridgette joke that their new house might end up being right next door.

Even if they don't get one of the first new houses in Halsey Terrace, the Hamiltons are already seeing the benefits of the property management side of the privatized housing program that began in May at Moanalua Terrace, Hokulani, McGrew Point, Radford Terrace and Halsey Terrace.

The Navy has partnered with a hui of companies under the name Hawai'i Military Communities LLC — principally comprising Texas-based builder C.F. Jordan L.P. and Ohio-based property manager Forest City Enterprises Inc.

Within two weeks of moving in, the Hamiltons called Forest City officials for minor problems, such as rusted areas inside the washing machine that Hamilton feared would stain his Navy whites.

Three days later, Forest City workers showed up with a new washing machine.

The Hamiltons called again just before they left for a trip to the store to inquire when the former residents' discarded boxes and other debris might be picked up from the curb. By the time the Hamiltons got back, the curb was clean.

But Don Hamilton was particularly impressed when he called Forest City to ask about their keys that kept sticking in the front door lock.

Just as soon as he hung up the phone, a Forest City worker knocked on their door.

"He says, 'I'm here to look at your lock,'" Hamilton said. "I said, 'You're kidding me.' They are definitely customer-service oriented."

To say thanks for the good service, Don and Bridgette brought flowers to the Forest City office.

Now they — and the Navy — hope the same kind of attitude will carry over into the new Navy homes.