Become a Patron! 


George H. Cortelyou, 

excerpted from: George H. Cortelyou, An Attempted Revolution in Native American Housing: the Native American Housing Assistance and Self-determination Act, 25 Seton Hall Legislative Journal 429-466, 447-464 (2001) (201 Footnotes)


A. Statutory Provisions

To accomplish affordable housing for low-income Native Americans, NAHASDA has two essential aims: to open the door to private lending and to merge federal Indian housing programs into a single flexible block grant, which tribes may use according to their needs, thus recognizing tribal self- determination and sovereignty. As originally passed, NAHASDA is organized into seven titles.

Under Title I, tribes design their own housing plan and send it to the Secretary of Housing and Urban Development (Secretary) whom NAHASDA authorizes to make block grants directly to tribes. Alternatively, a tribe may form a tribally designated housing entity (TDHE) to submit plans and receive block grants on its behalf. The housing plan consists of a one-year plan and a five-year plan which include the tribe's objectives, housing needs, an account of outside financial resources, and a certificate of compliance with federal non-discrimination statutes. Upon the Secretary's approval, the housing funds are distributed. The following year, tribes must submit another housing plan to obtain the next annual block grant. Title I also describes the negotiated rulemaking committee of tribal and HUD representatives from "geographically diverse small, medium, and large Indian tribes" in recognition of Native American diversity, who establish the regulations for implementing NAHASDA.

The Secretary must review housing plans for compliance, and if a tribe or its TDHE has performed poorly under housing programs before NAHASDA, HUD monitors it more closely. If a tribe is "substantially noncompliant," NAHASDA authorizes HUD to reduce or eliminate funding, replace the tribal housing entity, or render technical assistance. NAHASDA originally had a compliance waiver relieving small tribes of technical burdens. Title I also originally included a controversial provision prohibiting block grants to tribes unless they submitted a certificate of compliance with the Davis-Bacon Act in their housing plan and conducted an environmental review. Another controversial provision denied block grants to recipients who paid taxes to any political body, including tribal governments, or who did not pay utilities under a local cooperation agreement.

Title II establishes basic qualifications for block grant funding and defines the funded activities, the most significant of which include buying, building, or improving homes as well as funding services like counseling and crime prevention. The grant recipient must assist low-income Native American families, defined as those earning 80 percent of the local median income or less. Housing units may only be sold or rented to low-income families for their entire useful life. Title II also mandates rent ceilings, homebuyer payment caps, insurance coverage, and fair lease terms.

The negotiated rulemaking committee of HUD and tribal representatives draft the allocation formula governed by Title III, which the Secretary uses to calculate the amount of the block grants. The committee is required to consider a number of factors reflecting a tribe's needs including poverty, other available housing funds, the number of units it manages, and its ability to administer the plan, but not a tribe's performance prior to NAHASDA. A complex formula for determining the funding in each block grant resulted. Title III originally had a "safety net" provision to prevent allocating less funding than in 1996.

Title IV specifies the procedures for tribal compliance and reporting. If a tribe fails to comply with NAHASDA, the Secretary can terminate the block grants, reduce them by the amount not expended, limit their permitted uses, or replace the TDHE. If the Secretary feels that the tribe has not complied substantially, the Secretary may refer the matter to the Attorney General who may bring a civil action. On the other hand, a tribe that wants to review the Secretary's funding limitation or termination must petition the federal appeals courts. If the tribe could not comply merely for technical incapacity, the Secretary may assist the tribe to better comply.

Title V repeals housing assistance to Native Americans under the 1937 Housing Act, the Cranston-Gonzalez National Affordable Housing Act, the Housing and Community Development Act of 1974, and the Stewart B. McKinney Homeless Assistance Act.

Title VI allows grant recipients to apply for loan guarantees backed by the full faith and credit of the United States. The tribe or its TDHE may guarantee a loan up to five times the amount of its block grant. Tribes may use NAHASDA grants to repay the loan. The Secretary can guarantee up to $400 million per year and $2 billion total over five years. Title VI also requires the Secretary to educate Native Americans about the loan guarantees.

Finally, Title VII increases leasehold terms up to 50 years to encourage private lending. Title VII also allows funds for a national organization to provide training and technical assistance to Native American housing authorities and housing entities.

B. NAHASDA's Success

Of the 575 tribal housing entities, 97 percent met the first housing plan submission deadline of July 1, 1998, and by September 30th, HUD distributed nearly all of the NAHASDA block grants, totaling $550 million. While the number of housing units developed or planned under the 1937 Housing Act was 2,000 annually, NAHASDA built 6,000 in its first year. By January 2001, 25,000 housing units were planned or produced under the Act. Of the 77 tribes the National American Indian Housing Council surveyed, 84 percent said NAHASDA was an improvement over earlier housing programs. Interestingly, tribal housing entities performed better than HUD in accurately implementing NAHASDA.

NAHASDA also successfully marked the first time Congress recognized that HUD urban housing was inappropriate for tribes on reservations. Congress promoted NAHASDA as an historic step in its relations with Native Americans by extending fundamental American rights to them. Tribes are sovereigns, whom NAHASDA respects by allowing them to structure their own programs and take responsibility for the results. The Act further anticipates the problem of friction between tribes and their housing authorities by providing for tribal review of plans before submission. Moreover, NAHASDA used community planning and development to ameliorate reservation economies. Title VI loan guarantees are NAHASDA's most important provision, because tribes can use it to clear their waiting lists quickly. NAHASDA also successfully simplified the process of acquiring housing funds by substituting a single block grant for numerous housing programs. The trust relationship guided Congress to serve Native American needs better and to help them achieve self- sufficiency, ultimately improving the relationship between the two governments. NAHASDA's success is key to congressional reauthorization of the Act in 2001, which would cement its place in the landscape of Native American housing.

Unfortunately a General Accounting Office study found that the most significant barriers to Native American home lending still existed after NAHASDA. Housing is inextricably tied to poverty, desolation, and the absence of infrastructure, which NAHASDA does not improve. In implementing NAHASDA, HUD also restricted some provisions and added terms. One very significant implementation failure was a lack of publicity or regulations for its guaranteed loan provisions. Three years passed before HUD issued regulations for Title VI guarantees, and HUD refused to consult tribes under negotiated rulemaking after the initial 1998 regulations. In addition, Congress did not adequately fund NAHASDA to meet tribes' needs though it increased the number of tribes receiving funds. Even before NAHASDA was enacted, it was called a "Band-Aid solution," because without increases in funding, it changes nothing. Welfare reform further strains NAHASDA funding by removing funds Native Americans relied on and forcing some back onto reservations. Though NAHASDA built 25,000 housing units with $650 million in the last fiscal year 2001, tribes need 200,000 housing units and an additional $450 million annually just to meet current demand. For now, tribal housing authorities seek "creative" solutions, like partnerships with private lenders or using the proceeds of tax-exempt bonds financed by the block grant.

A. An Amendment for Taxes, Wages, and other Technical Oversights

One major roadblock was the environmental survey requirement, which deprived some tribes of millions of dollars and forced others to abandon housing construction without an actual environmental problem. Another roadblock was the requirement that Native American recipients could not receive a block grant if they paid taxes to any political body, including tribes. Congress also included the Davis-Bacon wage requirement, which upset Senator McCain and the tribes who testified against it, because it forced Native Americans "to pay Cadillac prices for Volkswagens."

The Omnibus Indian Advancement Act ("OIAA") attempted to correct these technical problems, but merely enacted provisions in the Code of Federal Regulations and it actually restricted other provisions in NAHASDA, especially against smaller tribes. For example, the amendment repeated de facto review and audit procedures. The OIAA limited the Secretary's compliance waiver to three months for tribes that had circumstances beyond their control; the Secretary could no longer waive compliance standards for small tribes; and the Secretary could waive the environmental survey requirement under a narrow 4-prong test that hurts smaller tribes. The allocation formula no longer had a floor of the amount received in 1996 and limited modernization assistance to smaller tribes. The OIAA also gave tribes a hearing for noncompliance and narrowed the time for better performance. The tax exemption requirement was not eliminated, but the Secretary could waive it if the tribe made good faith efforts to comply. The Davis-Bacon wage requirement was not eliminated either, but did not apply if tribes had laws requiring wages above the prevailing rate.

B. Title VIII for Native Hawaiians at Last

Even though the federal government stands in a fiduciary relationship with Native Hawaiians, NAHASDA did not assist them, so they went unnoticed for federal housing funds despite 40 years of Hawaiian statehood. The Hawaiian Homelands Homeownership Act of 2000 finally corrected this oversight by adding Title VIII to NAHASDA.

The housing dilemma for Native Hawaiians is more critical than for Native Americans. Over 80 years ago, the federal government placed 200,000 acres in trust for Native Hawaiians but the revenues from the land were insufficient for infrastructure and housing. Native Hawaiians today have the highest overcrowding rates in the country at 36 percent compared to three percent nationally. Of Native Hawaiians, 49 percent have housing problems as compared with 44 percent of Native Americans and with 27 percent of United States citizens overall. Of Native Hawaiians eligible to live on the trust land, 95 percent need housing, one- third spend more than 30 percent of their income for shelter alone, and half fall below 30 percent of the median family income. The findings of fact for Title VIII conclude that Native Hawaiian housing needs are "extraordinarily severe."

Title VIII duplicates NAHASDA's block grants and guarantees but has substantial differences. Instead of a tribally designated housing entity or the tribe itself, the Department of Hawaiian Home Lands (HHL- Dept.), a state-run agency established under the Hawaiian Homes Commission Act of 1920, develops and submits the housing plan. HUD then sends the block grant to the HHL-Dept., which administers the plan for Native Hawaiian families eligible to live on the Hawaiian trust lands. The Secretary first performs a compliance review of the grant application, which must have a one-year plan, a five-year plan, and certificates of compliance for the same issues under Title I. Title VIII includes the controversial Davis-Bacon wage requirement and environmental review, but does not require tax-exemption to receive funds. Like NAHASDA, Title VIII requires the HHL-Dept. to bring in outside capital through partnerships with the private sector. Finally, instead of replicating Title VI, Title VIII extends to Native Hawaiians the Section 184 program, which guaranteed loans for low-income families before NAHASDA.

The omission of Native Hawaiian sovereignty from Title VIII is a serious concern because NAHASDA took pains to incorporate Native American sovereignty. Another concern is that no date is set for the Secretary to promulgate regulations for Title VIII, which allows for a long delay as seen with Title VI loan guarantees. The significant limits to section 184A guarantees for Native Hawaiians are also a major concern because they deprive Native Hawaiians of the same ability to finance large-scale developments needed to clear their waiting lists. . . .