[Senate Hearing 117-657]
[From the U.S. Government Publishing Office]
S. Hrg. 117-657
HOUSING FOR NATIVE AMERICANS: REVIEW OF FEDERAL PROGRAMS, BARRIERS, AND
OPPORTUNITIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON
HOUSING, TRANSPORTATION, AND COMMUNITY DEVELOPMENT
of the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING HOUSING INSECURITY IN NATIVE COMMUNITIES AND THEIR
EXPERIENCES WITH FEDERAL INDIAN HOUSING PROGRAMS
__________
MAY 27, 2021
__________
Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
Available at: https: //www.govinfo.gov /
_________
U.S. GOVERNMENT PUBLISHING OFFICE
51-976 PDF WASHINGTON : 2023
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SHERROD BROWN, Ohio, Chairman
JACK REED, Rhode Island PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey RICHARD C. SHELBY, Alabama
JON TESTER, Montana MIKE CRAPO, Idaho
MARK R. WARNER, Virginia TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia KEVIN CRAMER, North Dakota
STEVE DAINES, Montana
Laura Swanson, Staff Director
Brad Grantz, Republican Staff Director
Cameron Ricker, Chief Clerk
Shelvin Simmons, IT Director
Charles J. Moffat, Hearing Clerk
______
Subcommittee on Housing, Transportation, and Community Development
TINA SMITH, Minnesota, Chair
MIKE ROUNDS, South Dakota, Ranking Republican Member
JACK REED, Rhode Island RICHARD C. SHELBY, Alabama
ROBERT MENENDEZ, New Jersey MIKE CRAPO, Idaho
JON TESTER, Montana BILL HAGERTY, Tennessee
CATHERINE CORTEZ MASTO, Nevada CYNTHIA LUMMIS, Wyoming
CHRIS VAN HOLLEN, Maryland JERRY MORAN, Kansas
JON OSSOFF, Georgia KEVIN CRAMER, North Dakota
RAPHAEL WARNOCK, Georgia STEVE DAINES, Montana
Tim Everett, Subcommittee Staff Director
Caroline Hunsicker, Senior Policy Advisor for Housing, Transportation,
and Native Affairs
Andrew Rothe, Republican Subcommittee Staff Director
(ii)
C O N T E N T S
----------
THURSDAY, MAY 27, 2021
Page
Opening statement of Chair Smith................................. 1
Opening statements, comments, or prepared statements of:
Senator Rounds............................................... 3
WITNESSES
Dante Desiderio, Chief Executive Officer, National Congress of
American Indians, Washington, DC............................... 5
Prepared statement........................................... 24
Responses to written questions of:
Senator Cortez Masto..................................... 45
Adrian Stevens, Acting Chairman of the Board of Directors,
National American Indian Housing Council; Executive Director,
Seneca Nation Housing Authority; and Member, Seneca Nation,
Irving, New York............................................... 7
Prepared statement........................................... 29
Responses to written questions of:
Senator Cortez Masto..................................... 45
Alene Tchourumoff, Senior Vice President, Community Development
and Center for Indian Country Development, Federal Reserve Bank
of Minneapolis, Minneapolis, Minnesota......................... 9
Prepared statement........................................... 35
Responses to written questions of:
Chair Smith.............................................. 47
Senator Cortez Masto..................................... 50
Senator Lummis........................................... 57
Michael Goze, Chief Executive Officer, American Indian Community
Development Corporation (AICDC), Minneapolis, Minnesota;
Chairman, Board of Commissioners, Ho-Chunk Housing and
Community Development Agency (HHCDA), Tomah, Wisconsin; and
Member, Ho-Chunk Nation of Wisconsin........................... 11
Prepared statement........................................... 41
Responses to written questions of:
Senator Cortez Masto..................................... 59
Eric Shepherd, Executive Director, Sisseton-Wahpeton Housing
Authority, Sisseton, South Dakota; and Member, Sisseton
Wahpeton Oyate................................................. 12
Prepared statement........................................... 42
Responses to written questions of:
Senator Cortez Masto..................................... 60
(iii)
HOUSING FOR NATIVE AMERICANS: REVIEW OF FEDERAL PROGRAMS, BARRIERS, AND
OPPORTUNITIES
----------
THURSDAY, MAY 27, 2021
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Subcommittee on Housing, Transportation, and Community
Development,
Washington, DC.
The Subcommittee met at 10 a.m., via Webex, Hon. Tina
Smith, Chair of the Subcommittee, presiding.
OPENING STATEMENT OF CHAIR TINA SMITH
Chair Smith. Today's hearing of the Subcommittee on
Housing, Transportation, and Community Development will come to
order. The hearing will be in virtual format.
This is my first hearing as Chair of this Subcommittee, and
I am so glad to be joined by Ranking Member Rounds from South
Dakota. Senator Rounds and I have worked together on Native
housing issues for several years, and when we started talking
earlier this year about our shared interest in this
Subcommittee, Native housing issues immediately came to mind as
a topic for both of us. So I am looking forward to working with
Senator Rounds on this Subcommittee, this Congress, as we
examine a number of important housing, transportation, and
community development issues.
We are joined today by a panel of witnesses who will share
their work to address housing insecurity in Native communities
and their experiences with Federal Indian housing programs, and
this topic is personal to me.
Minnesota is home to 11 sovereign Tribal Nations and large
indigenous populations in the Twin Cities, Duluth, and Bemidji,
and I have had the great privilege of visiting and meeting with
tribal leaders from Minnesota to hear firsthand what they see
as challenges and opportunities in their communities.
In 2019, I held a statewide listening tour on housing
issues, and as part of that tour, we held four tribal-specific
sessions. A constant, consistent message that I heard across
all four listening sessions with Native leaders was the need
for more supportive housing and culturally specific
programming, particularly to support Native people experiencing
homelessness.
Current and historical trauma amongst Native Americans
contributes to the disproportionately high prevalence of
homelessness amongst these communities. And they told me that
without culturally specific programming and trauma-informed
care, this will not work.
Native people experiencing homelessness struggle to access
services, of course, and to maintain housing stability. It is a
difficult challenge, and tribal leaders are using scarce
resources to try to address the complicated challenges of
overcrowded homes, cost-burdened renters, and low home
ownership rates on tribal lands.
Consider that in Minnesota 49 percent of Native households
own their own homes compared to 76 percent of White households.
Nationally, this home ownership disparity exists as well, with
about 51 percent of Native households owning a home compared to
about 73 percent of White households.
Home ownership requires access to credit, but in 2019
lenders in Minnesota denied almost 25 percent of Native
American mortgage applications. By contrast, lenders denied
only 6 percent of White applicants.
Inequities in mortgage lending are only one factor
contributing to disparities in home ownership. We also know
that legal barriers to lending on trust land, the lack of
intergenerational wealth, and underinvestment in Federal Indian
housing programs is also an issue.
In this hearing, we have a platform to elevate the voices
of those struggling with housing insecurity and those working
to combat it in communities from Fond du Lac, Minnesota, to the
Pine Ridge Reservation in South Dakota, to Montana, Nevada, and
all over the country.
The last time the Banking, Housing, and Urban Affairs
Committee held a hearing dedicated to these issues was during
the 112th Congress when fewer than half of the Members of this
Subcommittee were even Members of the Senate. I am hopeful that
today presents an opportunity for this Committee to rededicate
ourselves to meeting the treaty and moral obligations of our
Nation when it comes to ensuring that Native Americans have
access to safe, affordable, and stable housing.
We have a once-in-a-generation moment to address the deep
systemic barriers to housing in Indian country, and I hope that
you all will join me in this effort. Together, we can help
Native families across the country secure, safe, stable, and
affordable housing, and we can finally give tribes the
resources that they need, resources they are already owed, so
that we can find solutions that work in the community. It is on
us to prove to Tribal Nations that the Federal Government is
ready to live up to its commitments and to play a role in
reducing homelessness, providing housing assistance, and
reducing disparities in home ownership.
Before I turn to Senator Rounds, I would just like to say a
brief word about how I view the work of this Subcommittee.
Housing and transportation issues we know touch the lives of
every single American. If you do not have a safe, affordable
place to live, nothing else in your life works. It is nearly
impossible to focus on your education, your job, or your family
if you do not have a good, stable place to live. And if you
cannot get where you need to go safely, affordably, and
reliably, it is pretty hard for anything else in your life to
work either.
Right now, too many families are struggling to find
affordable housing and to get access to transportation,
especially families of color and Native people. This has
happened for a range of reasons: the history of unfair and
inequitable Federal housing policies, lack of funding and a
lack of understanding, sometimes just a lack of attention. So I
intend to use this Subcommittee to examine these issues and to
do all that we can to make sure that housing and transit
policies work for all families. I cannot wait to roll up my
sleeves and to get to work, and I look forward to hearing from
our witnesses today and from the Members of this Subcommittee.
And now I will turn to Senator Rounds for his opening
statement.
OPENING STATEMENT OF SENATOR MIKE ROUNDS
Senator Rounds. Thank you, Madam Chair, and thank you to
our witnesses for taking the time to attend today's hearing. I
look forward to hearing from all of you.
Let me just begin, though, by thanking the Chair. Senator
Smith and I are not only working on housing issues, we are
working on a number of our rural areas, and sometimes that is
not something that we talk about with regard to items that make
news and the headlines or anything. But there are a lot of us
that try to work across the lines back and forth, and in the
Senate it requires bipartisan support for any type of activity
to move forward. Senator Smith and I are working on ag issues;
we are working on water development issues, rural economic
issues. And as the Chairwoman has said, this is an area that we
both agree is a place where we really can make a difference in
our home States and for rural parts of our country.
Today this Committee will examine an issue of great
importance to me and to so many in my home State of South
Dakota and one that this Committee has not held a hearing on in
nearly 10 years. That issue is providing safe, affordable, and
stable housing for Native American communities throughout the
United States. I hope this is one of multiple opportunities
that we will have to address this matter this Congress and work
together across the aisle on solutions to the policy challenges
in this area.
This issue not only impacts the lives of thousands of South
Dakotans, but also millions more of our tribal members across
the United States. In South Dakota, we have nine federally
recognized tribes, each of which faces various and unique
tribal housing concerns. One of these tribes is represented
here today, and I would like to introduce Mr. Eric Sheperd from
the Sisseton Wahpeton Oyate in South Dakota. Eric, thank you
for being with us today. You might want to just wave at
everybody, Eric.
Recent data shows that housing conditions for Native
American households are substantially worse than U.S.
households. In fact, Native Americans have some of the greatest
housing needs in the United States. That is according to the
National Low Income Housing Coalition, the reasons for this
being they face overcrowding, high poverty rates, lack of
plumbing, inadequate heating, and other severe infrastructure
issues. And that is if they are even able to access housing
options at all. This is a serious problem, and now is the time
to fix it.
In addition, there are other fundamental challenges that
make home ownership more difficult for Native Americans. The
complicated legal nature of Tribal Trust Land can make it
exponentially more difficult to lend and borrow on land in
Indian country. While legislation that Senator Smith and I
partnered on in the past has resulted in a number of
complications, but there is clearly more work to do.
The FDIC also reports that Native American and Alaskan
Native American individuals are unbanked at triple the average
of other Americans. Not having access to financial services
makes owning and even renting a home all that much more
difficult.
I hope today's hearing will also shed light into how
housing challenges are exacerbated by other legal and economic
issues.
Even before the COVID-19 pandemic, Native American housing
programs already in existence have failed to adequately serve
the needs of our poorest tribal communities, especially in more
rural areas across the country. It is my hope that Congress can
also make progress this year on reauthorization of the Native
American Housing Assistance and Self-Determination Act, or
NAHASDA, and I look forward to hearing our witnesses' thoughts
on reauthorizations, reforms, and alternative funding options
for Native housing in light of the recent pandemic.
These past few months, the COVID-19 pandemic has pushed
more Native Americans living on reservations to seek home
ownership, but longstanding barriers continue to prevent this.
That is why I partnered together once again with Senator Smith
on two pieces of legislation, including the Native American
Housing Affordability Act and legislation reforming the Native
American Direct Lending Program, both of which I am looking
forward to discussing today.
For years, Congress and tribal leaders have worked to
address these Native American housing issues. There has been a
range of different approaches and challenges, and we seem to
have fallen short along the way. While these issues are complex
and compounded when put into rural settings, there is no excuse
for the situation which so many of our tribal members face
every single day just by being or wanting to be at home. It is
time that we make a concerted effort of stakeholders and in
consultation with our tribal members to develop solutions that
meet the needs of our States' growing tribal communities.
Again, we welcome all of you here today and look forward to
hearing your testimony about this very important issue, and I
thank you for attending and participating.
Thank you, Madam Chair.
Chair Smith. Thank you so much, Senator Rounds.
I am now going to introduce our witnesses. I will introduce
all five witnesses and then turn to each of you to make your
opening statements.
We have with us today Dante Desiderio, the chief executive
officer of the National Congress of American Indians; Adrian
Stevens, the acting board chair of the National American Indian
Housing Council, and also the executive director of the Seneca
Nation Housing Authority and a member of the Seneca Nation;
Alene Tchourumoff, the Senior Vice President for Community
Development and the Center for Indian Country Development at
the Monetary policy Federal Reserve Bank; Michael Goze, the
chief executive officers of the American Indian Community
Development Corporation in Minneapolis, Minnesota, and also the
chair of the Board of Commissioners at the Ho-Chunk Housing and
Community Development Agency, and a member of the Ho-Chunk
Nation. Greetings to my fellow Minnesotans. And, also, Eric
Sheperd, the executive director of the Sisseton-Wahpeton
Housing Authority in Sisseton, South Dakota. Eric is also a
member of the Sisseton Wahpeton Oyate community.
Welcome, and I thank all of your for your willingness to
speak with us today, and I look forward to hearing from each of
you. Before you begin your opening statements, just a few
reminders. Once you start speaking, there will be a slight
delay before you are displayed on the screen. To minimize
background noise, please click the mute button until it is your
turn to speak or ask questions.
You should all have on your screens a box labeled ``Clock''
that will show you how much time you have remaining. And for
witnesses, I ask you to please keep your opening statements to
about 5 minutes. You will have the opportunity to have your
full written statements submitted as part of the record.
For all Senators, the 5-minute clock applies to your
questions also. When you have 30 seconds remaining for your
statements or questions, you will hear a bell ring to remind
you that your time has almost expired, and it will ring again
when your time has expired.
And if there is a technology issue, we will just move to
the next witness or Senator until that technology issue is
resolved.
And to simplify the speaking order, Senator Rounds and I
have agreed to go by seniority in this hearing.
I will now turn to Mr. Desiderio for your opening
statement.
STATEMENT OF DANTE DESIDERIO, CHIEF EXECUTIVE OFFICER, NATIONAL
CONGRESS OF AMERICAN INDIANS,
WASHINGTON, DC
Mr. Desiderio. Thank you, Senator, and good morning,
Chairwoman Smith and Ranking Member Rounds and Members of the
Subcommittee on Housing, Transportation, and Community
Development. This is quite an honor to be present in the Senate
Banking Committee. On behalf of the National Congress of
American Indians, as the chief executive officer, I am Dante
Desiderio, a member of the Sappony Tribe, and we represent the
largest and oldest organization comprised of sovereign Tribal
Nations and their citizens.
So Tribal Nations across the country aim to maintain
housing infrastructure that improves their citizens' health
outcomes, sustains their regional economies, and, importantly,
addresses the growing population with our tribes. And I do want
to just comment for a second on the idea, Chairwoman Smith, of
taking a listening tour in Indian country. It is the best way
to learn about Indian country. And, Senator Rounds, I agree
that now is the time to fix it.
For decades, the Federal Government has recognized that its
trust responsibility to Tribal Nations to provide adequate
housing has been chronically underfunded. And as a result, our
tribal communities see overcrowded homes at a rate roughly
eight times the national average, and over 70 percent of our
existing housing requires extensive upgrades and repairs.
In 2017, HUD reported that it will take approximately
68,000 new units to alleviate overcrowding and replace those in
grave condition. These disparities increase the vulnerability
of American Indians and Alaska Natives to the COVID-19 and
resulted in our communities having at times the highest
infection, hospitalization, and death rates per capita in the
United States.
Today my testimony will focus on impediments and barriers
facing Tribal Nations and tribally designated housing entities
when attempting to build and finance housing. Then I will turn
to recommendations that will allow for construction and
financing of housing on tribal lands.
First, I want to address the challenges and barriers of
lending on trust lands and the burdensome permitting process.
In 2019, the FDIC found that 16 percent of tribal households
were unbanked compared to only 5 percent of the general
population.
The unique status of trust lands and the lack of education
of most private lenders makes them reluctant to lend to either
individual Natives, Tribal Nations, and tribally designated
housing entities. Further exacerbating this issue, the BIA must
review all trust land leases and provide verification of
ownership, which can be delayed for months.
Second, there is a lack of access to housing tax credits
for multifamily housing units in Indian country. These tax
credits are only provided to State governments, who in turn
have the ability to offer those to Tribal Nations, but often do
not; or if they do, it is sporadic.
And, third, while construction costs and inflation continue
to rise, flat Federal funding on Indian housing programs
results in a sharp decrease in the amount of affordable housing
units.
Finally, while identifying barriers is helpful in
understanding challenges, it does not always offer a pathway
forward for creating policy solutions. So I want to offer a few
solutions.
One, Congress should increase the access to the Low-Income
Housing Tax Credit Program and provide tax credits at a
proportionate rate for tribal governments.
Second, Congress should support finalizing the
implementation of the most recent CRA proposed rules and
encourage other banking oversight entities to adopt similar
rules.
Third, Congress should create a $50 million tribal
allocation from the USDA 502 Direct Lending Program to get
capital into Indian country and expand the test program that
was done in South Dakota.
And, last, while outside the jurisdiction of this
Committee, Congress should reauthorize the NAHASDA and fully
fund NAHASDA. NAHASDA would authorize two important home loan
programs: the Title VI Loan Guarantee Program and the Section
184 Loan Guarantee Program. And when drafting this legislation,
the National Congress of American Indians urges Congress to
establish an Assistant Secretary for Indian Housing at Housing
and Urban Development that would streamline environmental
rules, allow tribal housing programs to access IHS sanitation
funding. And Congress should also permanently authorize tribal
HUD Veterans Assistance Program to ensure all Native veterans
receive the benefits they deserve.
And just in conclusion, if Congress does not act, existing
tribal housing will continue to deteriorate, and tribes will be
left vulnerable, as they have been in this--as we have all seen
during the COVID-19 pandemic.
Thank you so much for allowing me to testify.
Chair Smith. Thank you so much.
And we will now turn to Mr. Stevens.
STATEMENT OF ADRIAN STEVENS, ACTING CHAIRMAN OF THE BOARD OF
DIRECTORS, NATIONAL AMERICAN INDIAN HOUSING COUNCIL; EXECUTIVE
DIRECTOR, SENECA NATION HOUSING AUTHORITY, AND MEMBER, SENECA
NATION,
IRVING, NEW YORK
Mr. Stevens. Good morning. My name is Adrian Stevens, and I
am the Acting Chair of the Board of Directors of the National
American Indian Housing Council. I am a member of the Seneca
Nation in New York, and I currently serve as the executive
director of the Seneca Nation Housing Authority. I appreciate
the opportunity to testify before the Senate Banking
Subcommittee today to discuss tribal housing. I would like to
thank Chairwoman Smith, Ranking Member Rounds, and Committee
Members for having this hearing. In addition to the comments I
will make today, I have submitted a formal written statement
for the record.
The Committee asked us to describe the state of housing in
Indian country. Unfortunately, the answer is that unmet housing
needs in our tribal community are great and they are
persistent. There is a longstanding housing shortage across
Indian country due to years of stagnant investment. Tribal
housing programs rely on Federal funding through NAHASDA, which
established the Indian Housing Block Grant for tribes 25 years
ago. Funding for NAHASDA programs has been flat for nearly 20
years, providing tribes only two-thirds the purchasing power
today that NAHASDA funds provided in the 1990s.
We are asking tribes to do a lot with their housing dollars
each year. Tribes are tasked with managing existing housing
stock that has been developed over decades, and now it is often
aging and needing constant repairs. Tribes also provide low-
income rental assistance, provide student housing, housing and
supportive services for elders and veterans, housing counseling
services for future homeowners, and we expect them to build new
housing units each year.
Tribes are expected to carry out all these services when
nearly 400 of the Indian Housing Block Grant recipients receive
less than $500,000 a year to do so and 175 tribal communities
receive less than $100,000 a year for their housing programs.
To be clear, NAHASDA has been successful. It has provided
tribes dedicated and consistent funding each year, enabling
tribal housing programs to improve their capacity and the
ability to improve their communities. Tribal housing programs
have never been capable to provide housing services to the
communities as they do through NAHASDA. When we fall short,
there is a lack of investment to spur new housing development
in Indian country.
In the first decade of NAHASDA, tribes were building well
over 2,000 units a year across the country, more than had been
built annually before NAHASDA was enacted. New construction has
significantly decreased, however, as funding diminishes with
inflation each year. Currently, tribes are building or
purchasing roughly 1,000 units a year while a 2017 HUD report
said 68,000 units are needed to address overcrowded homes and
substandard housing in tribal communities. Unless we change how
we invest in housing development in Indian country, tribes will
not catch up.
Prior to NAHASDA, tribes were piecing their housing
programs together with various grants and funding sources.
Despite the original promise of the block grant, tribes are
again today piecing their housing programs together. Tribes are
leveraging resources and programs from the U.S. Treasury, USDA,
Veterans Affairs, nontribal HUD programs, and others. However,
as tribes put these pieces together, they are often confronted
with a multitude different eligibility requirements,
environmental reviews, and program rules. As project planning
becomes more complex due to leveraging multiple funding
sources, tribes must weigh each project's impact to determine
the best use of their staff's time and bandwidth.
So what can we do? And what can Congress do? First and
foremost, we need to reauthorize and properly fund NAHASDA
programs. NAHASDA provides the greatest flexibility for tribes
to meet the unique housing needs of their communities, and when
properly funded, we see unit development across Indian country.
We have to encourage commercial lending and investment through
direct tax credits and incentives. Too often private banks and
lenders avoid tribal communities because the perception is
there that projects are too complex, or they do not provide the
same efficient return on investment that a similar project in a
nontribal area would provide. We have to improve administration
of trust land and how delays in simple trust land documentation
deter banks and Government lenders alike from prioritizing
housing loans on trust lands. We have to demand that all
Federal housing programs include tribal communities in both
eligibility and implementation. The Low-Income Housing Tax
Credit, USDA Rural Housing, Housing Trust Fund, and other
programs all seem like ideal fits to solve tribal housing
issues, yet those resources impact tribal communities sparingly
across the country, if at all. We have seen promise in Federal
and State programs that prioritize or incentivize tribal areas
or create specific set-asides, and we see promise when a
Federal program that is national in scope like the USDA Single
Family Home Loan Program partners directly with tribal
organizations or can implement their Federal programs directly
in tribal communities.
In that USDA pilot program in South Dakota, we have seen
Native CDFIs issue more USDA-backed home loans in two tribal
communities in a single year than USDA was able to provide in
the past decade. So let us do more of that. In short, we have
to increase investments of dollars and effort from Congress,
from Federal agencies, from tribes, from the private sector. We
must recognize the rural nature in many communities. The small
size of many tribal communities, the higher costs of project
development in tribal communities, all factored together
diminish the economies of scale that drive housing development,
and we have to invest anyway because it is meeting our tribal
communities where our families continue to face greater levels
of overcrowded and substandard homes and lack of affordable
housing options.
With that, I will end my statement, and I look forward to
answering any questions you might have. Thank you again for
your support in improving the housing opportunities for Native
Americans, Alaska Natives, and Native Hawaiians across the
United States.
Chair Smith. Thank you very much.
I will turn now to Alene Tchourumoff.
STATEMENT OF ALENE TCHOURUMOFF, SENIOR VICE PRESIDENT,
COMMUNITY DEVELOPMENT AND CENTER FOR INDIAN COUNTRY
DEVELOPMENT, FEDERAL RESERVE BANK OF MINNEAPOLIS, MINNEAPOLIS,
MINNESOTA
Ms. Tchourumoff. Thank you, Chair Smith, Ranking Member
Rounds, and Members of the Committee, for the opportunity to
testify today. As the senior vice president of Community
Development and Engagement at the Federal Reserve Bank of
Minneapolis, I oversee the work of the Center for Indian
Country Development. The CICD supports tribes through
actionable research and community collaboration to further
tribal economic prosperity. The Center also leverages our
department's broader expertise on affordable housing, labor
markets, and early childhood development.
I should add today that my views expressed here are not
necessarily the views of the Federal Reserve Bank of
Minneapolis or the Federal Reserve System.
Our work on housing involves applied research, community
engagement, and constant attention to the economic literature
in the field. Our work points to the harmful effects of the
current state of housing for Native Americans, Alaska Natives,
and other Indigenous populations. My comments and detailed
written testimony focus on Indian country's specific housing
challenges and opportunities demonstrated by Indian Country's
leaders.
As you have already heard this morning, housing is often in
short supply and substandard conditions in Indian Country.
Homes are seven times more likely to be crowded and nearly four
times more likely to lack complete plumbing. These conditions
have been shown to harm family health and stability.
In 2017, HUD estimated that 68,000 units would be needed
just to address these issues, which would likely cost tens of
billions of dollars. We focus on five factors that reinforce
these barriers.
First, Native nations are sovereign, but their land is held
in trust and must have its title cleared by the U.S.
Government. Mortgages on trust land are also leasehold
mortgages as opposed to fee simple mortgages, and housing
professionals and homebuyers frequently identify these
realities as significant hurdles.
Second, Indian country homebuyers often face an uphill
battle when working with lenders to finance their home. Our
economists' work shows that Native American borrowers on tribal
lands are more likely to receive high-cost loans, leaving them
ultimately to pay more for their homes over the life of their
mortgage.
Third, the tools designed to work in Indian country are
often underutilized on trust land. This applies to Indian
country-specific products like HUD's Section 184 program. It is
also true of products whose features make them relevant in
Indian country, like the USDA's Section 502 program.
The fourth reason relates to the Federal Government's
failure to fulfill treaty obligations. Developments in Indian
country often pay today for the resulting historical
underinvestment in physical infrastructure. For example, poor
access to water or transportation raises the overall cost of
construction.
Fifth, Federal funding sources with different eligibility
and process requirements complicate the preconstruction process
in, and may not reflect the unique needs of Indian country. No
quick fixes will radically improve things overnight, but plenty
of innovations are showing promise for a brighter future and
present potential avenues of involvement for Congress.
Our research and engagement suggest four recommendations.
First, the Federal Government should continue to expand
financial capacity of Native community development financial
institutions, CDFIs, and other tribal institutions. Native
CDFIs offer community-grounded credit solutions in Indian
Country. Our research suggests that the presence and activities
of Native CDFIs increases the credit score of Indian Country
residents that previously had the lowest credit scores. And the
pilot that was just mentioned involving two native CDFIs and
the USDA in South Dakota has shown the power of connecting
community-based lenders and Federal lending resources.
Second, the Federal Government can create normalized and
complementary interagency lending processes in Indian Country.
We recommend that Federal agencies and Government-sponsored
enterprises work with representatives from tribal governments,
lenders, developers, and nonprofits to find solutions and
provide guidance for housing in Indian Country.
Third, an improved title process on trust land would
support housing development and tribal sovereignty. The Helping
Expedite and Advance Responsible Tribal Home Ownership Act,
also known as the HEARTH Act, of 2012 created a process for
tribes to assume additional control of trust land management.
Sufficient funding is not available through the HEARTH Act
itself to fund the administrative capacity necessary for taking
over trust land management from the BIA, and the cost is simply
too high for many tribes.
Finally, data on Native Americans and Indian Country
programs should be improved. With some exceptions, existing
sources are often insufficient to assess policy impacts or
changes in the population-level well-being. Illuminating
economic conditions in Indian Country will require
collaboration on methodologies and new financial resources to
obtain sufficient statistical samples.
Congress has recently taken steps to support tribal
sovereignty and access to important housing resources, and I
hope our testimony today provides insight into how Federal
policy can further support and accelerate Indian Country's
upward momentum.
I would like to thank you again for the opportunity to
share insights from the CICD's work.
Chair Smith. Thank you very much.
I will turn now to Mr. Goze.
STATEMENT OF MICHAEL GOZE, CHIEF EXECUTIVE OFFICER, AMERICAN
INDIAN COMMUNITY DEVELOPMENT CORPORATION (AICDC), MINNEAPOLIS,
MINNESOTA; CHAIRMAN, BOARD OF COMMISSIONERS, HO-CHUNK HOUSING
AND COMMUNITY DEVELOPMENT AGENCY (HHCDA), TOMAH, WISCONSIN; AND
MEMBER, HO-CHUNK NATION OF WISCONSIN
Mr. Goze. Good morning, Madam Chair, Senator Rounds, and
Members of the Subcommittee. It is my honor to provide
testimony to this Committee this morning.
In looking at the current situation regarding safe,
standard, and affordable housing on tribal trust land or within
rural or urban settings throughout our country, American
Indians fall far short of the national average in the
percentage of home ownership when compared to their White
counterparts. There are several reasons for this disparity.
First, access to mortgage products that meet the specific
needs of the American Indian population. The Section 184 Indian
Home Loan Guarantee Program is a home mortgage product
specifically designed for American Indian and Alaska Native
families, Alaska villages, tribes, or tribally designated
housing entities. Congress established this program in 1992 to
facilitate home ownership and increase access to capital in
American Indian communities. Although this mortgage product has
had some impact, it has not equaled the playing field. The
number of lending institutions that offer the Section 184 loan
product are limited to a select few. I would suggest that the
Section 184 or a like loan product would be better served if it
was provided through the American Indian Community Development
Financial Institutions, CDFIs, that are a great asset to Indian
Country both on reservations and in the urban areas. The CDFIs
provide a myriad of services all dedicated to the financial
success of its clients.
The work of a CDFI in home ownership is providing homebuyer
education, homebuyer counseling, credit repair, budgeting,
responsibilities of home ownership, and other aspects of this
sometimes daunting process. A large number of American Indian
clients seeking home ownership are first-time homeowners
looking to provide stability, enhancing the community
stabilization making these services important to their
individual success. I believe this relationship would benefit
through the mortgage process. Currently their clients make
applications for mortgages with other lending institutions.
Sometimes these are online applications, and this can be a
totally different experience than they have had in the past in
working with the CDFI. To provide an opportunity for American
Indian CDFIs to have a mortgage product like the Section 184
will complete the process and provide a greater level of
success. American Indian CDFIs, given the opportunity, could
provide a better level of service and gain the knowledge and
financial benefits of the mortgage process, making this a win-
win for both the client and the CDFI.
Second, affordability. Income levels within the Native
American communities have a substantial effect on the home loan
amount available to them. With today's housing prices, the
availability of homes are scarce in lower-price areas. Having a
forgivable deferred loan product that will be reduced over time
would be a great investment into the stabilization of American
Indian families and communities. Having a safe, standard, and
affordable home creates the foundation that promotes better
outcomes in areas of education, health, and financial
stability. Our homes can be the single greatest financial asset
in one's life, making way for families to continue to thrive
versus just survive in the current economic climate. By
investing in our American Indian families via home ownership,
we can create an immediate impact to the lives of our youth,
elders, and adults. This type of investment creates immediate
impact and also provides long-term impact in the stabilization
of families.
Third, a land trust model. We have used the land trust
model in Minneapolis to make home ownership more affordable. In
Minneapolis, we have much success in this, and reducing the
mortgage loan amount by having land owned through a land trust,
this provides the ability to create the buying power of the
homeowner by having the land held outside of the mortgage. It
provides a monthly benefit to the homeowner in a reduced
monthly payment. In a land trust model, the appreciation is
shared by a predetermined amount should the property be sold.
The land trust model can also be beneficial in continued
housing affordability for the community by the reinvestment of
the appreciation by the land trust.
Last, in today's times we need to use every financial
opportunity to help American Indian families understand and
relish in the benefits of home ownership. We need to use a
number of initiatives to make home ownership possible. At AICDC
we have used city, county, and State funding options, including
grants, deferred loans, and other home ownership initiatives,
and this has made--we look forward to our Federal partners in
providing opportunities to increase home ownership to American
Indian families throughout the country.
I thank you for your attention to this matter.
Chair Smith. Thank you very much.
And we will now turn to Mr. Sheperd.
STATEMENT OF ERIC SHEPHERD, EXECUTIVE DIRECTOR, SISSETON-
WAHPETON HOUSING AUTHORITY, SISSETON, SOUTH DAKOTA; AND MEMBER,
SISSETON WAHPETON OYATE
Mr. Sheperd. I would like to thank Madam Chair Smith for
the opportunity to speak, Vice Chairman Toomey, Senator Rounds,
and other Members of the Subcommittee, for this opportunity to
talk about Indian housing today.
It has been an especially hard and challenging 15 months
for those of us on the Sisseton-Wahpeton Reservation in South
Dakota. We were hit hard early with the COVID pandemic at home,
and we are still working on recovery today. Housing has been at
the forefront of the recovery efforts, providing a safe place
for our members to shelter and recover and managing the many
new relief programs that you in Congress have provided to us.
A large part of our recovery effort at Sisseton-Wahpeton
involves looking past the pandemic and into the long-term
status of Indian housing programs, both on our reservation and
in the United States as a whole. The perennially inadequate
funding and other program issues that existed prior to 2020
must now be addressed to assure the long-term sustainability of
Indian housing for the first Americans. To put it more plainly,
we all must understand something is wrong when the base level
appropriation for the Native American Housing Assistance and
Self-Determination Act, NAHASDA, has not been increased since
the law was originally passed 25 years ago. As Congress and the
new Biden administration focuses on helping America rebuild its
dilapidated infrastructure and recalibrate its housing
assistance programs, Indian Country and Indian housing must
also be given fair consideration.
I know the Subcommittee has a particular interest in the
HUD Section 184 program operating in Indian Country. I can tell
you that the 184 program has had limited impact on reservation
lands held in trust by the United States. While a few
individuals have been able to secure leasehold mortgages under
the program, most of the funds go to off-reservation lands and
urban areas where banks and lenders are more comfortable with
providing traditional mortgages. The situation has not been
helped with HUD's recent revision or the program regulations
that send the program back in time before the 184 Act was
passed in 1992--requiring underwriting provisions and fees that
are not affordable or helpful to developing new housing on
reservation lands.
I would like to call the Subcommittee's attention to a
number of other important issues that Congress should address
regarding Indian housing programs:
We appreciate the emergency funds received to date and need
to receive a fair share of the new housing infrastructure funds
as well. The CARES Act, the Consolidated Appropriations Act of
2021, and the American Rescue Plan have all included much
needed emergency funds to support Indian housing operations
during the pandemic. We do appreciate that Congress has
allocated money to alleviate the short-term effects of the
COVID-19 pandemic. We can confirm that this money had an
immediate and vital impact on preserving and protecting housing
services and resources in our tribal communities. Our proposal
is to now address the more long-term and sustainable solutions
to improving Indian housing. The recently proposed American
Jobs Plan includes $231 billion to improve and produce more
housing and housing infrastructure, including a proposed amount
of at least $50 billion to renovate and rehabilitate federally
assisted housing. We are asking you to help ensure that, if new
infrastructure legislation is passed, Indian housing continues
to get its fair share of the funding. A 5-percent set-aside for
Indian housing would be $2.5 billion. As you are aware, Federal
programs have long neglected Indian Country's need to maintain
and improve its aging housing stock.
Housing needs in tribal areas remain the most severe in the
Nation, and resources to address the problem have declined more
rapidly than for other Federal housing programs.
Tens of thousands of new units are needed. Thousands of
existing units, some of which are currently boarded up because
of lack of funding and severe methamphetamine contamination,
are also in need of substantial rehabilitation. The simple fact
is that $2.5 billion of additional new funding is needed if
these conditions are going to be effectively addressed. Tribes
and their TDHEs have the capacity to build and rehabilitate
their housing. Most observers know and most studies show,
including the recent ``Housing Needs of American Indians and
Alaska Natives in Tribal Areas: A Report From the Assessment of
American Indian, Alaska Native, and Native Hawaiian Housing
Needs'', by HUD PD&R and the Urban Institute, January 2017, the
``Report,'' that TDHEs have or, if needed, can quickly
reacquire the capacity to build housing and other related
infrastructure construction on this scale. TDHEs are prepared
to quickly gear up to produce a substantial number of new
units. This will help tribes and Alaska villages generate for
their communities and the country postpandemic economic
recovery--just as they did successfully 10 years ago after the
Great Recession with American Recovery and Reinvestment Act--
ARRA--monies.
Thank you for this time to testify.
Chair Smith. Thank you very much to all of our panelists.
We will now begin a round of 5-minute questions from
Senators, and I will start actually right, I think, where Mr.
Sheperd was leaving off, which is the unique challenge that we
have with housing on tribal lands, which is that properties are
far more likely to have really significant, severe physical
defects than the rest of the United States housing stock all
in. In fact, on tribal lands, plumbing is deficient at a rate
five times higher than the national average, and homes on
tribal lands lack heating at a rate of more than 100 times the
national average.
So let me maybe turn to Mr. Desiderio and Mr. Stevens, and
you could just talk about why you think these physical
challenges are so much pervasive in tribal housing. Then let us
know, is this primarily a funding issue or are there other
things that we need to be doing in order to address this deep
challenge?
Mr. Desiderio. Well, I want to go back in time a little bit
to address this. There is this idea that, you know, tribes have
been placed on marginal lands. They have a limited land base,
and the housing stock has not kept up with the demand. So when
you are looking at building on limited land base and limited
access to water and other infrastructure, the issues that you
are mentioning tend to be more significant. It is an issue of
funding, and I am glad we are having this conversation around
housing during a national conversation of what is
infrastructure. And this is not an isolated issue, so as we are
talking about infrastructure, we really need to talk about the
infrastructure needs that support housing, which is what you
are getting at in your question.
If the housing stock is not keeping up with the demand and
we have the highest number of family members per household, it
stresses the existing housing stock, and then the limitations
on funding of, you know, the water infrastructure, which has
gone down, and then also looking at our lands are not included
in the Water Resources Conservation Act, which provides USDA
with that type of planning authority.
So there are a number of issues that go into this, but
mostly on the marginal lands and the lack of ability to address
the larger and really expensive infrastructure issues that go
into forming a really holistic community or holistic housing
stock.
Chair Smith. Thank you. So we should be thinking about this
clearly in the context of this larger infrastructure
conversation we are having.
Mr. Stevens, would you like to add anything to that?
Mr. Stevens. I think Dante hit it right on the knot there,
really talking about the infrastructure issues and lack of
funding. So rather than repeat what he said, he has pretty much
stated what--answering your question. But, again, you know, the
homes that we have on reservation are really one of the issues
that we have, you know, in finally being able to replace the
older homes that we do have, and I think it is having that
availability of funding available.
Chair Smith. Right, right.
So let me turn to Mr. Goze. Mike, in the recovery from the
coronavirus crisis, the community development CDFIs have played
a really important role in providing financing to folks that
have been overlooked by--or, you know, unable to get access to
financing. Could you just talk to us about what we need to do
to help CDFIs support home ownership for indigenous people and,
you know, what you have seen that is most effective in
accomplishing this goal from the perspective of CDFIs?
Mr. Goze. AICDC created a community-level loan fund that
actually is marked into the Minneapolis fund, which is the
CDFI. It is a new CDFI. They chose not to enter into the PPP
arena because of their size. But I see the CDFIs as being the
most integral part of home ownership, especially in the urban
areas and on the reservation areas, serving both in the urban
area and working with the Ho-Chunk Community Development Agency
in Wisconsin. I see the advantage of the CDFIs both in the
urban are and on the reservation in rural areas. And so I
believe by supporting them with providing more products that
they can use to reach their clients and tribal members would be
advantageous both in home ownership and actually all lending
opportunities which we see the Native American being unbanked
and not being able to access some of the financial needs that
they might have.
Chair Smith. Thank you. Thank you so much.
Mr. Stevens, I am very interested in the USDA 502 loan
pilot program in South Dakota. I expect that Senator Rounds
will ask about that, but if he does not, I will return to that.
Senator Rounds.
Senator Rounds. Thank you, Madam Chair. Well, I most
certainly appreciate the fact that we are having this hearing
today, and there seems to be a whole series of topics here that
our panelists have already delved into. But let me just begin
with this, and I would like to direct this first one to Mr.
Sheperd.
Although it does not fall squarely within the jurisdiction
of the Banking Committee, I hope that Congress can make
progress this year on the reauthorization of the Native
American Housing Assistance and Self-Determination Act, or
NAHASDA. NAHASDA is a very broad piece of legislation, but I
was hoping to learn more about some of the priorities your
organizations and tribes have identified for a reauthorization
package. And, Mr. Sheperd, I know you have an interest in this,
and that is the reason why I will direct it to you first. What
are some of the key priorities that the Sisseton Wahpeton Oyate
is hoping to see when NAHASDA is reauthorized?
Mr. Sheperd. Thank you, Senator Rounds. In several other
contexts, when tribes need approval from an agency, Congress
has authorized the ``deemed approved'' approach to move the
decision point past the agency, and if the agency takes too
long to act, we do support this kind of approach in the context
of HUD decisionmaking under NAHASDA. NAHASDA expired in 2013
and has not been reauthorized since, despite efforts in every
session to do so. Obstacles to development of affordable
housing are the lack of improvements to the low-income housing
areas. I think it is time. You know, I think we need to change
our mission there. We have been going 25 years now, Senator.
You know, we have had multiple consultations with tribes coming
to D.C., and maybe it is more than once a year. You know, we
are getting past the pandemic now, and maybe it is time--it is
time. Let us leave it at that. It is time to reauthorize
NAHASDA.
Senator Rounds. Thank you. I was thinking about this also,
and I am going to direct my next question to Mr. Desiderio. An
article from the Billings Gazette recently referred to Federal
assistance for Indian Country as the ``Marshall Plan for Indian
Country''. It pointed out the American Rescue Plan dedicated
$36 billion to federally recognized tribes this year on top of
$8 billion from CARES. Given the scope of challenges when it
comes to housing, I really hope that this money is being
directed and that you are seeing it on the ground there.
Can you tell us more about the effectiveness of how those
funds are being transmitted through the bureaucracy and whether
or not it seems to be any effectiveness with regard to the
Federal assistance during the COVID-19 when it comes to housing
specifically?
Mr. Desiderio. Thank you for that, Senator. So the
experience for tribes on the discretionary funds from the CARES
Act should be separated a little bit from the American Rescue
Plan. The CARES Act through the Department of Treasury had
limitations on the use of the funds. So infrastructure was
relatively limited for tribes to be able to pursue.
The subsequent legislation opened up housing, had housing
vouchers, and then in this latest round, the American Rescue
Plan, infrastructure was included, but it was not housing. So
we are able to address some of the water issues and sanitation
issues with the Rescue Act funding and get to some of the
housing vouchers and housing assistance through some of the
other legislation. So it is all incredibly helpful, and I think
it serves as a model for putting out discretionary money, but
the other side of that is opening the options for tribes to be
able to address the dramatic infrastructure needs that have
come out during this pandemic and really showcased what
deficiency in infrastructure--what are those real impacts.
And so the Marshall Plan idea is great, and the
discretionary funding is great, and we are looking forward to
addressing some of the infrastructure needs. But we are also
looking forward to further support through infrastructure
funding to be able to open that discretionary funding up or the
programmatic funding up to address all of these needs. I think
that tying hands on discretionary money may not be the best use
for addressing our needs on the ground that we all know
firsthand in our communities.
Senator Rounds. Thank you. Let me just follow up, and I do
want to follow up on Senator Smith's comments concerning the
502 Direct Lending Program. And I know that we have got a pilot
project working on it. I know there is more that we could do to
help these programs function appropriately.
To Mr. Stevens, do you have any thoughts on how to improve
and to build on the 502 program? Have we learned anything so
far?
Mr. Sheperd. I really have not had any issues or really any
type of development with the 502 program here at Seneca. Again,
you know, looking at that, I think really the openness of the
regulations that you need to follow to go through that program
are limited to what we try to do here on tribal lands. You
know, it is tough. They opened that up, but it is very low--
there is very little usage of that funding available there. It
is limited. So I think we can open it up and look at more
consultation on how to utilize those funds a lot easier for
tribes to be able to provide the housing needs of our
communities.
Senator Rounds. OK. Well, thank you. My time has expired,
but perhaps we can explore that a little bit more later on
here.
Thank you, Madam Chair.
Chair Smith. Thank you very much.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, Madam Chair. Thank you to
this panel. This is a great discussion. I am very proud I get
to represent 27 tribal communities in the State of Nevada.
Let me start with the Federal Home Loan Bank investments.
There are 11 Government-sponsored enterprises that we know as
the Federal Home Loan Banks, and they are required to meet the
affordable housing and community development needs of the
communities of the States that they serve.
So my question to the panel members: How many tribes to
your knowledge have received investments from the Federal Home
Loan Bank programs like the Community Investment Program or the
Community Investment Cash Advance or the Affordable Housing
Program? I am curious to know the data here. And maybe Mister--
is it ``Desiderio''?
Mr. Desiderio. Right.
Senator Cortez Masto. If we could start with you, are you
familiar with any of this money from Federal Home Loan Banks
going to any tribal communities for housing?
Mr. Desiderio. Thank you for asking that, and just to point
out, the Federal Home Loan Bank has reached out to get Native
representation from Senator Smith's home State. Chief Benjamin
from the Mille Lacs Band of Ojibwe is going to be serving on
that board, and they have had limited outreach as well to a
CDFI technical organization. But, in general, I do not know if
I can answer the question on how many, but it really has been
very limited outreach.
If you look at the potential of the Federal Home Loan Bank,
they have two different areas: one is on being able to
reassure--provide liquidity to banks. There are a lot of Native
American banks that could benefit from that. But on the other
side of it, if you look at their plans and their limited plans,
they are not addressing the real needs of Indian Country. Just
meeting with the CDFI technical adviser is not enough, and it
does not go to the understanding of tribal issues and the
capital needs that tribes are faced with.
Senator Rounds' bringing up the 502 program is a great
example of the creativity of a program to be able to adjust to
a member's income and lower the interest rate. It is also the
ability to get direct funding for relending into communities.
So all these things are possible, and they should serve as a
model for the capital markets and not as a substitute. And I
think that is really important. So the Federal Home Loan Bank
in providing some of the priorities for the bank, their plans
for the bank, you know, in being able to address Indian Country
needs, it has not acted in that direction. And the other thing
that they can do is they have a lot of grants that could go out
to tribal communities, but they are going out to serve housing
needs in the same way and not really using the tribal
governments and their role in providing housing to their
citizens.
So $700 or $800 million in grant funding is not finding its
way to reassure the capital markets or bring housing into
Native communities.
Senator Cortez Masto. Thank you. And is it fair to say the
only reason that they recently reached out is because Senator
Smith has been engaged, but that is just--but prior to that
they had not reached out to you?
Mr. Desiderio. I think it I fair to say that, yes, they
have not been actively reaching out until recently, yes.
Senator Cortez Masto. Yes, and that is what I am finding as
well as I engage in my region. The reason I bring it up,
because this is such an important issue, and so one of the
areas that I am focused on--and just for my colleagues, in
2019, there was a report on the low-income housing and
community development activities of the Federal Home Loan
Banks. There was only one reference to investment in tribes.
Only the Des Moines Bank offered a program, a Native American
Homeownership Initiative. I know--and this is the reason I am
bringing it up--because we all feel the same way that we have
got to do a better job here. So because of this I recently
introduced legislation, S. 1684. It is the Federal Home Loans
Banks' Mission Implementation Act, which would strengthen the
ability of the banks to invest in communities, and my bill
includes a 2-percent set-aside for tribes. This is an area that
we have got a great opportunity to focus on, and I look forward
to more conversations on this issue.
Thank you for this great hearing.
Chair Smith. Thank you so much, Senator Cortez Masto.
Now, there is Senator Lummis. I will next turn to Senator
Lummis. Welcome.
Senator Lummis. Thank you so much, Madam Chairman and
Senator Rounds, for holding this hearing. I am going to focus
my questions on the economically disadvantaged Native
Americans. In my State, that includes a substantial number of
the members of the Eastern Shoshone and Northern Arapaho tribes
in Wyoming on the Wind River Reservation and also, as you know,
Senator Rounds, the Oglala Lakota at Pine Ridge. There are
issues that relate to housing that really do affect their
financial and personal well-being, and I want to start with
some questions about how the census may have inaccurately
counted, because it is so difficult, the number of Native
Americans and how many are living in each household. You know,
if you have a Native American household where there are
multiple generations, there are extra workers, they are trying
to keep everybody housed, perhaps in housing that is smaller
than would normally be considered in the United States adequate
for that many people, then the census comes along, and maybe
they are reluctant to discuss how many people are living in
their household.
So question number one, and I think this is for Mr.
Desiderio and Ms. Tchourumoff: Is the census an issue? And is
it contributing to undercounts?
Mr. Desiderio. I just want to categorically say yes to that
question. The idea that tribal communities are consistently
undercounted in the census is pretty significant for the amount
of funding that goes out to tribes. The reluctance, you know,
for tribal citizens to contribute to the census has always been
an issue, and then this past census is going to have a severe
impact on that because of the pandemic and because of the idea
that a lot of tribes are in rural and remote areas, and this
information, you know, needs face-to-face, and that has not
been done as adequately in the last census. So, yes, it is an
important issue, the reluctance, and the higher households, it
is important that we get an accurate count, and I am not sure
we are doing that at this point.
Ms. Tchourumoff. Thank you, Senator. I would also offer--I
would agree with what Mr. Desiderio has just said. I think
Native Americans are at risk of being under- or miscounted, I
think for two important reasons.
First, the American Community Survey, which provides
annually updated data about reservations and communities across
the country does not include information about tribal
enrollment, and so it can make it difficult to understand how
housing challenges might vary across tribes and renders the ACS
less useful for program implementation than it could otherwise
be. And it means that the population measured in the census
data is not actually directly comparable to population measured
in a tribal census, for example.
The second challenge is, as Dante was just mentioning, that
Native Americans are vulnerable to undercounting in the
decennial census and, obviously, by extension the ACS, and that
is driven in part by, you know, the higher likelihood of
renting, lack of infrastructure, potentially phones, maybe
issues with trust in the Federal Government, access to
broadband, things like that. So the U.S. Census Bureau
estimates that the undercount in the 2010 census of American
Indians and Alaska Natives was about 4.9 percent, which is
substantially higher than Black Americans at 2.1 percent or
Hispanics as 1.5 percent comparing across different groups of
people. So it is a very, I think, important question.
Senator Lummis. Thank you. And if you have some thoughts
about concrete steps we could take to address this, I would
love to have you submit them in writing. And that is to any of
our witnesses.
I have a question for Mr. Sheperd. Data is showing that
calls to 911 around the most economically disadvantaged Native
American areas come from Native Americans that do not have
reliable housing. So is it reasonable to assume that we can
reduce some of the strain on our local public safety agencies
by improving Native American housing?
Mr. Sheperd. Of course. That takes me back to the
reauthorization of NAHASDA also. We also want to recommend, if
the opportunity arises, that NAHASDA be reauthorized. Such
formal reauthorization is long overdue. And if this should
happen, we continue to join with most other tribes, TDHEs, and
national and regional Native housing associations to advocate
that the reauthorization modify the existing NAHASDA 30-percent
rental payment rule. If the country fails now to address the
plight of Indian housing, it would be disastrous to tribes and
Alaska Native communities and to those hundreds of thousands of
Native people and families who suffer so greatly with
overcrowded and severely substandard housing.
Senator Lummis. Yes, well, it sure was a big issue in
Wyoming during COVID, and so we have learned a lot, all of us,
during COVID about some of the soft underbelly of our supply
chains, and certainly on our reservations, housing was a big
issue. There was an incident--I will tell you about it--on the
Wind River Reservation where an indigent Native American person
was exhibiting symptoms of COVID, but he was in a park in a
city, and they had to take him to the Indian Health Service in
the back of a pickup because there were inadequate medical
service providers, an ambulance that was subject to
sterilization from COVID. We learned so much during COVID, and
this is yet another area where we have got a lot of work to do.
So, Mr. Ranking Member and Madam Chairman, I want to thank
you once again for holding this hearing. Thank you very much to
our witnesses. I yield back.
Chair Smith. Thank you so much, Senator Lummis.
I think we have time for another round of questions if
Senator Rounds would like to ask anything more. I would like
to, and anybody else who is here. And I know that Senator
Tester and Senator Ossoff were trying to get back but have
conflicts with other committees. So let me just go to my
question. I want to follow up on this USDA Loan 502 pilot
program that Senator Rounds mentioned and I mentioned as well.
Alene, I am going to direct this to you. I think you
mentioned this in your testimony. So the USDA's 502 Direct Loan
Program offers single-family home loans to low-income rural
households, but only about 2.6 percent of these loans go to
Native families. So the USDA established this pilot program in
North and South Dakota where Native CDFIs could use their
community-based networks to deploy these USDA mortgages.
Alene, could you talk to us about sort of what we have
learned from this, what impact? I am looking at ways that we
could expand this pilot nationally and would love to hear your
thoughts on, you know, what kind of--where you think we should
go from here with this?
Ms. Tchourumoff. Well, thank you, Senator. I think I
mentioned in my testimony, as well, that some of the Federal
loan programs that are designed to provide mortgage financing
on trust lands or just in general, and then the difficulty of
actually providing those loans on trust land I think is present
across multiple programs, and that same case applies in the 502
Program.
The pilot relending program provides a promising example of
how CDFIs can be leveraged in communities to serve more
customers. In that example, you could see the relending
increasing the total number of loans. I think it was 17 loans
in one year versus 11 loans in the prior eleven years. You can
see the power of the network. In that instance as well, the
CDFIs provide financial education and other borrower support to
make the program work overall more successfully. There are
promising examples there. However, there are broader systemic
issues that we had talked about earlier relating to land trust,
the use of trust land, and then borrower--lender knowledge of
lending on trust land is, I think, another avenue outside of
CDFIs that continues to be an area of opportunity to look for
solutions.
Chair Smith. Thank you. Thanks so much.
Let me just ask--maybe I will just direct this broadly to
the panel. As I have listened to your testimony today, you each
raised a number of really practical and clear issues and ideas
for where we can go from here. So let me just maybe ask each of
you if there is anything more that you would like to say. What
is the single most important thing that we could do in your
mind to addressing this lack of access to affordable housing
and good-quality housing that is such a deep challenge?
Mr. Desiderio. If I may start, this is really interesting
question. I think it gets to the idea that if the housing is
becoming worse in Indian Country or more challenging, we need
to change the way that we are doing things. So taking a
holistic approach, the incentives are not lined up to have the
capital markets come in. So I would love a question--I was
tuned into the Banking hearing yesterday for the CEOs of the
banks, and the idea that--the Community Reinvestment Act was
passed last year, and now it is on hold. But what are those
banks doing to serve Indian Country who are now squarely in
their assessment area? What are their plans? And most of the
large banks do not have plans on addressing Indian Country, and
they have no intention of doing that because it is more
difficult.
So we need to align the incentives of the capital markets
to do business in India country, and I think the Community
Reinvestment Act, the way that that has lined up, it gives
Indian Country as a distressed area the incentive that banks
need to come in. They get multiples that are applied to doing
business in Indian Country so they can meet their CRA
qualifications sooner. They also have the ability to invest in
the banks that have learned to deal with Indian Country. And
they also can do equity investments and support CDFIs. And I
think those kind of incentives when you are lining it up and
that kind of structure is really what we need on the incentive
side.
The support from the Federal Government in dealing with
this one house at a time for, you know, the USDA program is
good to show banks the way. But when we are looking at this,
the Title VI program shows the most promise because that
program allows the tribe to leverage funds and develop housing
developments instead of one house at a time. We should be
supporting that and the other infrastructure that goes with it,
and really supplementing that program on the Community
Development Block Grants that we are leveraging. With 95
percent guarantees, tribes are still having trouble getting
banks to come in and support that, and that shows that it is
not just the incentives; there has to be education on the
banking side who would love to have a 95-percent guarantee, but
there is not always the education internally with the branches
and the banks themselves to deal with Indian Country.
So looking at where the incentives are, looking at the role
of the Government in doing developments, and looking at
bringing the capital markets in is really going to be
instrumental in solving this in a general way instead of
looking at it one house at a time.
Chair Smith. Right. Thank you. My time is up. I am going to
turn back to Senator Rounds, but I appreciate that very much,
and I look forward to following up on that conversation. I
think it is very important.
Senator Rounds.
Senator Rounds. Thank you, Madam Chair. And, once again,
thanks for holding this hearing. And just so that our witnesses
know, we have been called to a vote, and so we are probably
going to--and it is up to the Chairperson, but it looks like we
have got about 7 minutes left before the vote terminates on us.
So I will be very brief.
I want to thank all of our witnesses for being with us
today. I do want to just touch base on the 184 HUD loan
program, the guarantee program. We made some changes, and
Senator Smith and I have worked on this in the past, and more
specifically, we partnered together on legislation called the
``Native American Housing Affordability Act''. It was signed
into law as part of the December omnibus. Our legislation made
it easier for 184 borrowers on Tribal Trust Land to participate
in the 184 program by allowing HUD to issue certificates of
guarantee without waiting on the trailing documents from the
BIA, provided that lenders indemnify HUD for defaults.
I am hoping to get a better idea of how well these reforms
have worked in the 6 months since they have become law. We may
not have any evidence yet at all of success, but I was hoping
that perhaps there might have been some sort of an uptick in
lending. I just thought I would start just very briefly, Mr.
Stevens, do you know anything about whether or not there has
been any uptick at all based on the changes made?
Mr. Stevens. Not yet, not that I have seen, but for us in
New York we were limited on the amount of lending agencies that
offered the 184 program. At one point within the last year, we
had nobody available to us. We just got recently--because we
had applied recently, about 3 years ago, working with a company
that they were told that New York State refused to do 184. So
how could we they do that? And we do have a couple companies
that we are working with right now to do 184 in New York State.
So it is a different issue, too, with the land issue that we
have in New York State versus other tribal areas, too, so it is
going to be a little tweaking that we have to do to really make
sure that we can get that program up and running, and we are
working with one of the lending agencies now to do that.
Senator Rounds. OK. Thank you very much.
Ms. Tchourumoff, I am just curious. From the Fed, have you
heard anything, have you seen anything with regard to the
changes that we have made?
Ms. Tchourumoff. Senator, we have not, and that is actually
an area that we would love to work with others on. It is just
the availability of data on these programs so that we can
continue to monitor and track progress of availability and
where the loans are being used, for example.
Senator Rounds. Great. Thank you.
Madam Chair, I know that we are pressed for time on this,
so I will yield back at this time. But I just want to say once
again thanks for holding this hearing. I think we can put
together some good programs, and I think this is something that
all of us want to try to address and make improvements on. If
it was easy, it would have been done a long time ago. There are
lots of intricacies on it. There are lots of issues to go to
Tribal Trust, the challenges that we face just in terms of the
amount of poverty that we find to begin with. But this is
something that I think--this is an area that truly can make a
difference for individuals that really could use some help.
So, Madam Chair, thanks, and I will yield back.
Chair Smith. Thank you so much, Senator Rounds. And thank
you so much to all of our witnesses for being a part of this
Subcommittee hearing today and for providing your testimony.
I want to just note that both Senator Rounds and I serve
also on the Senate Indian Affairs Committee, and so we have an
opportunity to work on these issues in both paces here, and I
know we have been listening hard around issues around
reauthorizing NAHASDA as well as the other very great and
specific ideas that you all have offered today.
For Senators who would wish to submit questions for the
record, those questions are due 1 week from today, which will
be Thursday, June 3rd. And for all of our witnesses, you have
45 days to respond to any questions for the record.
Thank you again, and with that, this hearing is adjourned.
[Whereupon, at 11:16 a.m., the hearing was adjourned.]
[Prepared statements and responses to written questions
supplied for the record follow:]
PREPARED STATEMENT OF DANTE DESIDERIO
Chief Executive Officer, National Congress of American Indians,
Washington, DC
May 27, 2021
On behalf of the National Congress of American Indians (NCAI),
thank you for holding this hearing to address housing needs in Indian
Country. I am Dante Desiderio, I am a member of the Sappony Tribe, and
I serve as the Chief Executive Officer of NCAI.
Founded in 1944, NCAI is the oldest and largest representative
organization comprised of Tribal Nations and their citizens. Tribal
leaders created NCAI in response to Federal policies that threatened to
terminate Tribal Nations. Since then, NCAI has fought to preserve the
treaty and sovereign rights of tribal governments, advance the
Government-to-Government relationship, and remove structural
impediments to tribal self-determination.
Central to these goals is ensuring that the Federal Government
provides resources to improve housing opportunities for Tribal Nations
and their citizens. \1\ Tribal Nations across the country maintain and
develop housing infrastructure that serves to improve their citizens'
health outcomes, sustain their regional economies and workforces, and
address our growing population.
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\1\ 25 U.S.C. 4101(5) (acknowledging, inter alia, that
``providing affordable homes in safe and healthy environments is an
essential element in the special role of the United States in helping
tribes and their members to improve their housing conditions and
socioeconomic status [,]'')
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Despite this role, for decades, the Federal Government has
recognized that its trust and treaty responsibility to Tribal Nations
to provide adequate housing has been chronically underfunded. \2\ As a
result, tribal communities see overcrowded homes at a rate of 16
percent, roughly eight times the national average. \3\ Additionally,
over 70 percent of existing housing stock in tribal communities
requires upgrades and repairs, many of them extensive. \4\
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\2\ ``A Quiet Crisis: Federal Funding and Unmet Needs in Indian
Country'', U.S. Commission on Civil Rights (2003) https://
www.yumpu.com/en/document/read/32869468/a-quiet-crisis-federal-funding-
and-unmet-needs-in-indian-country; and ``Broken Promises: Continued
Federal Funding Shortfall for Native Americans'', U.S. Commission on
Civil Rights (2018) (``Broken Promises Report''), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
\3\ U.S. Department of Housing and Urban Development (HUD),
``Housing Needs of American Indians and Alaska Natives in Tribal Areas:
A Report From the Assessment of American Indian, Alaska Native, and
Native Hawaiian Housing Needs'', (2017), https://www.huduser.gov/
portal/sites/default/files/pdf/HNAIHousingNeeds.pdf.
\4\ HUD, Fiscal Year 2017 Congressional Justifications, 11-12,
(2016), https://www.hud.gov/sites/documents/FY-2017-CJS-COMBINED.PDF.
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These disparities increased the vulnerability of American Indians
and Alaska Natives (AI/ANs) to the coronavirus (COVID-19) pandemic and
resulted in our communities having at times the highest COVID-19
infection, hospitalization, and death rates per capita in the United
States. \5\
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\5\ Centers for Disease Control and Prevention, ``Risk for COVID-
19 Infection, Hospitalization, and Death by Race/Ethnicity'', https://
www.cdc.gov/coronavirus/2019-ncov/covid-data/investigations-discovery/
hospitalization-death-by-race-ethnicity.html.
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Today's hearing on the challenges and barriers to accessing
affordable housing in Indian Country comes at a time when Tribal
Nations across the country can attest with experience that access to
cost-effective housing for Indian Country is lacking. NCAI's testimony
will first identify the current state of housing in Indian Country,
then identify some impediments and barriers facing Tribal Nations and
Tribally Designated Housing Entities (TDHEs) when attempting to build
and finance homes. Finally, while identifying barriers is helpful in
understanding challenges, it does not always offer a pathway forward
for creating policy solutions. Therefore, our testimony will also draw
attention to programs that are working for Indian Country and offer
recommendations that will allow for the construction and financing of
homes on tribal lands.
The State of Housing in Indian Country
Historically, Tribal Nations have faced a pervasive housing crisis
caused by underinvestment by the Federal Government that has left
tribal citizens living in substandard and cost-burdensome conditions.
In 2017, The U.S. Department of Housing and Urban Development (HUD)
reported that ``the lack of housing and infrastructure in Indian
Country is severe and widespread, and far exceeds the funding currently
provided to tribes.'' \6\ HUD also reported that 70 percent of existing
housing stock in tribal communities is in need of upgrades and repairs,
many of them extensive. \7\ The 2017 report also found that it would
take approximately 33,000 new housing units to alleviate overcrowding
and an additional 35,000 housing units to replace existing units in
grave condition. \8\ To meet the total need of approximately 68,000
housing units (new and replacement), factoring in the average
development cost of a three-bedroom home, the total cost is in excess
of $33 billion. \9\
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\6\ U.S. Commission on Civil Rights, ``Broken Promises: Continued
Federal Funding Shortfall for Native Americans'', 137, (2018), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
\7\ HUD, Fiscal Year 2017 Congressional Justifications, 11-12,
(2016), https://www.hud.gov/sites/documents/FY-2017-CJS-COMBINED.PDF.
\8\ HUD, ``Housing Needs of American Indians and Alaska Natives in
Tribal Areas: A Report From the Assessment of American Indian, Alaska
Native, and Native Hawaiian Housing Needs'', (2017), https://
www.huduser.gov/portal/sites/default/files/pdf/
HNAIHousingNeeds.pdf.
\9\ National Congress of American Indians, ``Tribal
Infrastructure: Investing in Indian Country for a Stronger America'',
An initial report by NCAI to the Administration and Congress, 2017, p.
11, https://www.ncai.org/attachments/PolicyPaper-RslnCGsUDiatRYTp
PXKwThNYoACnjDoBOrdDlBSRcheKxwJZDCx-NCAI-InfrastructureReport-
FINAL.pdf.
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The lack of affordable housing is also a problem in Indian Country,
with 37.5 percent of Native households spending more than 30 percent of
their income on housing expenses, an amount considered to be a cost
burden. \10\ This lack of affordable housing contributes to
homelessness and overcrowding. Those living in tribal areas often
report instances of ``hidden'' homelessness, making the issue of
homelessness less conspicuous in Indian Country than in non-tribal
areas. The Urban Institute in 2017 found that approximately 99.8
percent of tribal housing officials surveyed reported that ``doubling
up'' (i.e., taking in family and friends who would otherwise have
nowhere else to go) was a problem in their tribal areas. Additionally,
88 percent of housing officials surveyed said traditional homelessness
(i.e., sleeping on the street, in an emergency shelter, or someplace
not meant for human habitation) was an issue in their tribal
communities. \11\ Designated homeless services are also less common in
tribal areas. Although homelessness affects nearly all tribal areas,
only half of the tribal areas visited for Urban Institute surveyed had
a shelter within their tribal area boundaries. \12\ Additionally,
tribal communities experience overcrowded homes at a rate of 16
percent, roughly eight times the national average. \13\ HUD research
also shows that such overcrowding has a negative effect on family
health and contributes to the ongoing problems of domestic violence and
poor school performance in Indian Country. \14\
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\10\ Ibid.
\11\ Urban Institute, ``Urban Wire: Homelessness in Indian Country
Is a Hidden, But Critical, Problem'', (2017), https://urbn.is/2gPtVcJ.
\12\ Ibid.
\13\ HUD, ``Housing Needs of American Indians and Alaska Natives
in Tribal Areas: A Report From the Assessment of American Indian,
Alaska Native, and Native Hawaiian Housing Needs'', (2017), https://
www.huduser.gov/portal/sites/default/files/pdf/HNAIHousing
Needs.pdf.
\14\ HUD, Fiscal Year 2017 Congressional Justifications, 11-4,
https://www.hud.gov/sites/documents/FY-2017-CJS-COMBINED.PDF.
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Challenges and Barriers To Accessing Affordable Housing
Lending on Indian Trust Land and Burdensome Permitting Processes
AI/ANs on tribal lands or in remote areas face significant barriers
to home ownership. These barriers include AI/ANs having some of the
highest rates of unemployment and poverty, lacking access to credit
services, and lacking education about what it takes to become a
homeowner. In 2019, the Federal Deposit Insurance Corporation (FDIC)
found that 16.3 percent of AI/AN households were unbanked, compared to
only 5.4 percent of the general population. \15\ Banks and credit
institutions are less likely to have branches in tribal areas, which is
due in part to the jurisdictional complexity of lending on tribal
lands. A 2016 Native Nations Institute study found that Indian Country
faces ``high interest rates on loans, the inability to use trust land
as collateral on loans, and a general unwillingness on the part of
financial institutions to lend to reservation-based applicants.'' \16\
Economic and social constraints like lower borrower incomes and limited
or blemished credit histories broadly impede the expansion of mortgage
credit to underserved populations. \17\
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\15\ Federal Deposit Insurance Corportation, ``How American Banks:
Household Use of Banking and Financial Services'', 2019 FDIC Survey,
https://www.fdic.gov/analysis/household-survey/2019report.pdf.
\16\ Native Nations Institute. 2016. Access to Capital and Credit
in Native Communities (digital version). Tucson, AZ: Native Nations
Institute. https://nni.arizona.edu/application/files/8914/6386/8578/
Accessing-Capital-and-Credit-in-Native-Communities.pdf
\17\ HUD, ``Mortgage Lending on Indian Land: A Report From the
Assessment of American Indian, Alaska Native, and Native Hawaiian
Housing Needs'', p. vii, (2017), https://www.huduser.gov/portal/sites/
default/files/pdf/NAHSG-Lending.pdf.
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The unique status of trust lands being inalienable makes it
difficult for private lenders to obtain security interests in
individual plots and most private lenders are uneducated on what
practices they can employ to lend to AI/ANs residing on tribal lands.
\18\ This makes lenders reluctant to lend to either individual AI/ANs,
Tribal Nations, and TDHEs interested in developing housing. Further
exacerbating the issue, the Bureau of Indian Affairs must review all
trust land leases and provide verification of land ownership via a
title status report. This verification has historically taken several
weeks, months, or even years to complete. \19\ In 1977, Congress
designed the Community Reinvestment Act (CRA) to combat some of these
issues for low and moderate income areas. Unfortunately, under the
current iteration of the CRA, banks can fulfill those requirements
without having to serve AI/AN communities, leaving lending institutions
with little to no incentive to invest in Indian Country.
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\18\ U.S. Department of Agriculture (USDA), ``Lending on Native
American Land: A Guide for Rural Development Staff'', (2006), http://
www.ruralhome.org/storage/documents/nativeamerguideforusda.pdf.
\19\ Ibid.
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Lack of Access to Housing Tax Credits
Multifamily housing properties in Indian Areas are few and far
between and typically require housing subsidies. These housing projects
depend on tax credit equity and housing grants because debt financing
for affordable housing is limited in Indian Areas. \20\ The Low Income
Housing Tax Credit (LIHTC) program is one of the primary resources for
developing affordable rental housing nationwide, yet LIHTCs are
substantially underused in Indian Areas.
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\20\ ``Indian Area'' as defined by 24 CFR 1000.302.
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Currently, LIHTC allocations are only provided to state governments
who in turn can provide allocations to Tribal Nations, but often do
not. Development and operation of affordable housing is more difficult
because the poverty rate and unemployment rate among tribal citizens is
more than twice the rest of the Nation. Most properties cannot support
debt financing because of their tenants' low incomes. Indian
reservations are located in 70 of the 386 persistent poverty counties,
meaning they have been in poverty for generations, at least partially
due to underlying structures of disadvantage. \21\ LIHTCs remain the
primary mechanism for affordable housing development in the U.S. and
should be a resource that Indian Country benefits from. \22\
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\21\ U.S. Department of Agriculture (USDA), ``Lending on Native
American Land: A Guide for Rural Development Staff'', (2006), http://
www.ruralhome.org/storage/documents/nativeamerguideforusda.pdf.
\22\ Housing Assistance Council, ``Low Income Housing Tax Credits
in Indian Country'', (2019), https://www.ncai.org/policy-research-
center/initiatives/LIHTC-in-Indian-Country.pdf.
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Chronic Underfunding for Adequate Housing
While the Federal Government maintains a unique trust
responsibility to Tribal Nations and their citizens, there is
insufficient support for housing on tribal lands. One of the key issues
is funding stagnation. As inflation grows, the funding amounts rarely
do. The Indian Housing Block Grant (IHBG) program is an example of a
key program to support housing needs; however, it is formula-based and
has maintained the same level of funding for the past 20 years. As a
result, this critical program has failed to keep pace with inflation,
leaving many Tribal Nations out in the cold. \23\
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\23\ U.S. Commission on Civil Rights, ``Broken Promises: Continued
Federal Funding Shortfall for Native Americans'', 142, (2018), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
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The flat-funding of Federal housing programs for Tribal Nations,
combined with inflation in construction costs over time, has resulted
in a sharp decrease in the number of affordable housing units developed
in Indian Country in recent years. \24\ In 2016, the Acting Deputy
Assistant Secretary at HUD stated that ``one of the greatest
impediments to developing affordable housing in Indian Country is the
flat funding of the IHBG for most of the program's history.'' \25\ This
decrease in the number of affordable housing units is negatively
mirrored by the growing AI/AN population and their housing needs.
---------------------------------------------------------------------------
\24\ Ibid.
\25\ Randall R. Akers, then Acting Deputy Assistant Secretary at
HUD, Testimony, Briefing Transcript, pp. 166-167.
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In addition to funding shortfalls, the location of many tribal
communities increases the material and labor costs of home construction
and imposes additional housing development costs. \26\ Building
materials must often be brought into tribal communities from miles away
over substandard roads or even by air, and the availability of
``qualified and affordable contractors'' is limited. \27\ For many
remote areas with extreme weather conditions, construction seasons are
very short, leading to increased costs for already overburdened
homebuyers.
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\26\ U.S. Commission on Civil Rights, ``Broken Promises: Continued
Federal Funding Shortfall for Native Americans'', 142, (2018), https://
www.usccr.gov/pubs/2018/12-20-Broken-Promises.pdf.
\27\ Ibid.
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Solutions and Suggested Congressional Action
The barriers presented throughout this testimony underscore the
need for robust funding increases through flexible programs that allow
Tribal Nations to address the diverse and extensive housing
infrastructure and financing needs of their communities. Despite
mounting challenges, Tribal Nations are now exercising their right of
self-determination to design and implement their own housing and other
community development infrastructure programs. In order to support
tribal sovereignty and increase access to housing for AI/ANs, NCAI
recommends the following congressional actions:
Reauthorize NAHASDA and Increase Funding for IHBG Formula Grants
The Native American Housing Assistance and Self-Determination Act
(NAHASDA), first enacted in 1996, authorized Tribal Nations to self-
determine their housing programs. NAHASDA gave flexibility for Tribal
Nations to develop, construct, and maintain housing for their members,
transforming how Federal housing programs addressed housing needs in
tribal communities. Additionally, NAHASDA consolidated existing housing
funds into a single block grant, IHBG, resulting in tens of thousands
of additional housing units being constructed, as well as increased
tribal capacity to address related infrastructure and economic
development challenges. IHBG is a formula-based grant that provides
certainty and security for long-term housing and community development.
NAHASDA also authorizes two important home loan programs, the Title
VI Loan Guarantee program (Title VI) and the Section 184 Loan Guarantee
Program (Section 184). Title VI was created to assist tribes, Alaska
Native Villages, and TDHEs with financing affordable housing and
provides Federal guarantees for private market financing of housing
development in Indian Country. \28\ Section 184 provides a 100 percent
guarantee to private lenders in cases of home loan default. Tribal
Nations have successfully participated in this program with an
extremely low default rate. \29\ Using Section 184, Tribal Nations and
tribal citizens can purchase an existing home, obtain single-close
construction loans for stick-built or manufactured homes on a permanent
foundation, obtain rehabilitation loans, or obtain both a purchase and
rehabilitation loan.
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\28\ Department of Housing and Urban Development, ``Title VI Loan
Guarantee Program Fact Sheet for Lenders'', (2021), https://
www.hud.gov/sites/documents/TITLEVI-FACT-SHEET-LENDERS.PDF.
\29\ Department of Housing and Urban Development, HUD, ``Mortgage
Lending on Indian Land: A Report From the Assessment of American
Indian, Alaska Native, and Native Hawaiian Housing Needs'', p. 31,
(2017), https://www.huduser.gov/portal/sites/default/files/pdf/NAHSG-
Lending.pdf.
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In the 116th Congress, Senator John Hoeven introduced S. 4090, the
NAHASDA Reauthorization Act. This legislation marks the first
bipartisan reauthorization bill in the Senate since NAHASDA expired in
2013. S. 4090 proposed to reauthorize NAHASDA programs through 2031,
create an Assistant Secretary for Indian Housing at HUD, and update
several key provisions including, but not limited to: streamlining
environmental review requirements; allowing tribal housing programs to
access IHS sanitation funding; and tribal eligibility for HUD Housing
Counseling and Homelessness Assistance grants. NCAI strongly urges
Congress to reintroduce and pass legislation that reauthorizes NAHASDA
through 2031 and provide increased funding appropriations for IHBG
formula grants of at least $1 billion to help address the ongoing
housing crisis in Indian Country.
Modernize The Community Reinvestment Act To Increase Lending in Indian
Country
Congress should support finalizing the implementation of the Office
of the Comptroller of Currency (OCC), Federal Reserve Board, and the
FDIC's most recent CRA proposed rules, Modernization of Community
Reinvestment Act Regulations. \30\ These rules will address Indian
Country's lending issues by providing banks with CRA credit for serving
tribal communities even when Indian Country falls outside their CRA
assessment areas and creating CRA scoring incentives for banks that
choose to do business in Indian Country. Congress should also urge the
Federal Reserve, FDIC, and OCC to increase education of lending in
Indian Country for regulators and lenders, and to increase ongoing
communication between credit institutions and Tribal Nations and their
business enterprises.
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\30\ Office of the Comptroller of the Currency, Treasury;
Community Reinvestment Act Regulations; 85 FR 34734 (June 5, 2020),
https://www.occ.gov/news-issuances/federal-register/2020/85fr34734.pdf.
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Increase Access to the Low Income Housing Tax Credit Program and
Provide a Proportionate Rate for Tribal Governments
Given the enormous needs for housing, NCAI strongly supports the
expansion of LIHTCs for Tribal Nations to ensure that the needs of
their citizens are met. Tribal Nations have been disproportionately
left out of this program and seek increased deployment in Indian
Country and inclusion in the program's allocation criteria. In April
2021, Senators Cantwell, Wyden, Young, and Portman introduced the
Affordable Housing Credit Improvement Act of 2021, which expands the
definition of Difficult Development Areas to include Indian Areas as
defined in NAHASDA. NCAI urges Congress to pass similar legislation and
include a proportionate allocation of funds specifically for tribal
governments. Providing a proportionate allocation of funds to tribal
governments will ensure these critical resources reach the populations
that require this support most.
Permanently Reauthorize the Tribal HUD-VASH Program
Native veterans have a long history of distinguished service to
this country. Per capita, they serve at a higher rate in the Armed
Forces than any other group of Americans and have served in all the
Nation's wars since the Revolutionary War. Native veterans even served
in several wars before they were even recognized as U.S. citizens.
Despite this esteemed service, homelessness is a concern for our Native
veterans. To combat this issue, Congress created the HUD-Veterans
Affairs Supportive Housing (HUD-VASH) program. The program has been a
nationwide success because it combines rental assistance, case
management, and clinical services for at-risk and homeless veterans.
Unfortunately, this program is not fully available to Native veterans
living on tribal lands.
In the 116th Congress, Senator Jon Tester introduced S. 257, the
Tribal HUD-VASH Act of 2019. S. 257 would codify and make permanent the
Tribal HUD-VASH program within the larger HUD-VASH program and ensure
adequate funding for the program. In addition, the bill would make all
Tribal Nations and their tribal housing programs eligible for the HUD-
VASH program, which to date has remained limited to the original 26
recipients. The bill would also call on the Indian Health Service to
assist the program as requested by HUD or the Department of Veterans
Affairs (VA).
NCAI has a standing resolution supporting this legislation,
Resolution #ECWS-14-001, ``Support for Indian Veterans Housing Rental
Assistance Demonstration Program in the Native American Housing and
Self-Determination Act Reauthorization''. Accordingly, NCAI urges
Congress to pass similar legislation early in the 117th Congress.
Create a $50 million Tribal Set-Aside From the Rural Development 502
Direct Loan Program To Establish a National Relending Program
for Indian Country
U.S. Department of Agriculture (USDA) Rural Development (RD) has
limited staff resources to provide Single Family Housing Direct Loans
on tribal land. In FY 2020, of the 5,821 direct loans made nationally
by USDA RD, just 110 were issued to AI/AN borrowers, and only seven of
those were for homes on tribal lands.
In 2018, a 502 Direct Loan relending pilot program was announced,
providing $2 million to two Native Community Development Financial
Institutions (CDFIs) to relend to eligible Native families in North and
South Dakota. The demonstration program was highly successful,
deploying 17 loans mortgage loans in less than a year on two South
Dakota Indian reservations, Cheyenne River Indian Reservation and Pine
Ridge Indian Reservation, nearly twice the amount deployed in the
previous decade, with an additional pipeline of demand from 29 families
for $3.6 million in mortgage financing on those two reservations alone.
This pilot program has been successful, in part, due to Native
CDFIs' experience operating on tribal lands. Support for Native CDFIs
is essential to solving low rates of lending and home ownership on
tribal lands. They provide extensive financial and homebuyer education
to help their clients become self-sufficient private homeowners. The
proposed expanded relending pilot program would increase the flow of
mortgage capital to Indian Country by allowing Native CDFIs to be
eligible borrowers under the 502 Direct Loan Program and enable them to
relend to eligible families for the construction, acquisition, and
rehabilitation of affordable housing. NCAI strongly urges Congress to
pass legislation authorizing the national expansion of this relending
program and creating a $50 million set aside within the 502 Direct Loan
program.
Conclusion
On behalf of NCAI, I again thank you for the opportunity to submit
testimony and for holding this hearing. Reauthorizing NAHASDA,
increasing funding for IHBG formula grants, improving tribal access to
the Low-Income Housing Tax Credit Program while providing a
proportional rate for tribal governments as compared to State
governments, modernizing the Community Reinvestment Act to increase
lending in Indian Country, and reauthorizing critical legislation like
the Tribal HUD-VASH program will improve housing conditions in Indian
Country. If Congress does not act, our existing housing stock in tribal
communities will continue to deteriorate. Our Tribal Nations and their
citizens will continue to have less than favorable health outcomes,
struggling economies, and be in a worse position than other citizens
when the next major disaster arrives. NCAI looks forward to working
with this Subcommittee and the full Committee to ensure access to
affordable housing in Indian Country and would be happy to connect
further on these issues.
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PREPARED STATEMENT OF ADRIAN STEVENS
Acting Chairman of the Board of Directors, National American Indian
Housing Council; Executive Director, Seneca Nation Housing Authority,
and Member, Seneca Nation, Irving, New York
May 27, 2021
Good Afternoon. My name is Adrian Stevens, and I am the Acting
Chairman of the Board of Directors of the National American Indian
Housing Council. I am a member of the Seneca Nation, and I currently
serve as the Executive Director of the Seneca Nation Housing Authority
in Salamanca, New York. I would like to thank Chairwoman Smith, Ranking
Member Rounds, and all Committee Members for having this hearing today
and for working to ensure the United States is fulfilling its trust and
treaty obligations towards Indian Country with respect to providing
safe, affordable housing opportunities in tribal communities and to
Native people anywhere in the country.
Background on the National American Indian Housing Council
The NAIHC was created by tribal housing programs in 1974 and for
nearly five decades has provided invaluable Training and Technical
Assistance (T&TA) to all tribes and tribal housing entities; provided
information to Congress regarding the issues and challenges that tribes
face in their housing, infrastructure, and community development
efforts; and worked with key Federal agencies to ensure their programs'
effectiveness in native communities. Overall, NAIHC's primary mission
is to promote and support American Indians, Alaska Natives and native
Hawaiians in their self-determined goal to provide culturally relevant
and quality affordable housing for Native people.
The membership of NAIHC is comprised of 280 members representing
469 \1\ tribes and tribal housing organizations. NAIHC's membership
includes tribes and tribally designated housing entities throughout the
United States, including Alaska and Hawaii. Every member of this
Committee serves constituents that are members of NAIHC, either
directly through tribes located in your States, or generally through
the United States' Government-to-Government relationship with all
tribes within the United States. NAIHC's members are deeply
appreciative of your work to improve the lives of Indigenous Peoples
throughout the Country.
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\1\ There are 574 federally recognized Indian tribes and Alaska
Native villages in the United States, all of which are eligible for
membership in NAIHC. Other NAIHC members include State-recognized
tribes eligible for housing assistance under the 1937 Housing Act and
that were subsequently provided funding pursuant to the Native American
Housing Assistance and Self-Determination Act of 1996, and the
Department of Hawaiian Home Lands, the State agency that administers
the Native Hawaiian Housing Block Grant program.
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Profile of Indian Country
There are 574 federally recognized Indian tribes in the United
States. Despite progress over the last few decades, many tribal
communities continue to suffer from some of the highest unemployment
and poverty rates in the United States. Historically, Native Americans
in the United States have also experienced higher rates of substandard
housing and overcrowded homes than other demographics.
The U.S. Census Bureau reported in the 2019 American Community
Survey data that American Indians and Alaska Natives were almost twice
as likely to live in poverty as the rest of the population--23.0
percent compared with 12.3 percent. The median income for an American
Indian Alaska Native household is 30 percent less than the national
average ($45,476 versus $65,712).
In addition, overcrowding, substandard housing, and homelessness
are far more common in Native American communities. In January 2017,
the Department of Housing and Urban Development (HUD) published an
updated housing needs assessment for tribal communities. According to
the assessment, 5.6 percent of homes on Native American lands lacked
complete plumbing and 6.6 percent lacked complete kitchens. These are
nearly four times than the national average, which saw rates of 1.3
percent and 1.7 percent, respectively. The assessment found that 12
percent of tribal homes lacked sufficient heating.
The assessment also highlighted the issue of overcrowded homes in
Indian Country, finding that 15.9 percent of tribal homes were
overcrowded, compared to only 2.2 percent of homes nationally. The
assessment concluded that to alleviate the substandard and overcrowded
homes in Indian Country, 68,000 new units need to be built.
Since the Native American Housing Assistance and Self-Determination
Act (NAHASDA) was enacted in 1996, tribes have built over 37,000 new
units according to HUD. However, as the appropriations for the Indian
Housing Block Grant (IHBG) (established by NAHASDA) have remained level
for a number of years, inflation has diminished the purchasing power of
those dollars, and new unit construction has diminished as tribes focus
their efforts on existing unit rehabilitation. While averaging over
2,400 new unit construction between FY 2007 and 2010, new unit
construction has dropped in recent years with only 2,000 new units
between 2011 and 2014, and HUD estimating less than 1,000 new units in
future years as tribes maintain existing housing stock over new
development.
Status of Housing Opportunities for Native Americans
There remains a large unmet need for quality, affordable housing in
tribal communities. As Members of the Committee are aware, there is a
housing shortage across the country, and that is definitely true for
Native communities. With a lack of consistent data collection year-to-
year, NAIHC is largely relying on the American Indian, Alaska Native,
and Native Hawaiian Housing Needs Study, published by HUD in January
2017. The report identified an unmet need of 68,000 units to address
overcrowded and substandard housing conditions. With new housing
construction or acquisition fairly stagnant around 1,000 new units per
year in tribal communities across the United States, we do not expect
the unmet need to have changed. Additionally, many of NAIHC's members
have opined that they believe the 2017 Study's unmet need calculation
to be underestimated.
The large unmet need is persistent, and largely due to insufficient
resources being dedicated to reverse the trends. In 2018, the United
States Commission on Civil Rights updated its ``Broken Promises''
report first released in 2003, and found that housing conditions had
deteriorated, with the number of overcrowded households or households
with inadequate plumbing growing by 21 percent, and the number of
families facing severe housing costs growing by 55 percent.
Despite these trends moving in the wrong direction, Congress has
been decreasing the amounts of housing assistance to tribal communities
each year through stagnant funding of NAHASDA programs while inflation
has grown over the past 20 years. In FY 2020, Congressional IHBG
formula funding of $650 million provided roughly \2/3\ the purchasing
power that tribes received at the inception of NAHASDA in FY 1998 ($600
million in FY 1998). Tracking IHBG funding since NAHASDA's passage
found that annual appropriations compared to inflation-adjusted levels
have caused tribal housing programs to lose $3.4 billion since FY 1998.
Recent additions to NAHASDA programs, such as the competitive IHBG
funding, are welcome and encouraging, but alone are insufficient to
make up for the loss of funding over time.
To put the funding in another perspective, the FY 2021 IHBG funding
levels provide 379 tribes/grantees with less than $500,000 to operate
their housing program, which we expect to manage their existing housing
units, provide low-income rental assistance, other housing services AND
develop new housing units. Further, 175 of the IHBG grantees received
less than $100,000 a year to carry out these activities. While some of
the tribes form umbrella organizations to create some efficiencies, it
should be easy to see why we're not making much progress against the
levels of unmet need.
While the funding of NAHASDA programs continues to be an issue, the
program itself has built the capacity of tribal housing programs across
the country. Tribes have been able to rely on consistent, dedicated
funding through NAHASDA for over 20 years, which has allowed them to
create housing programs and develop and train dedicated staff to
operate those housing programs. The success of tribal housing programs
was evident early on in NAHASDA, when tribes were producing new housing
units at rates similar to or higher than HUD was prior to NAHASDA's
enactment. NAHASDA has also increased the local control of funding as
it is the tribes themselves that develop their own Indian Housing Plan
for the communities. These plans are tailored to the individual tribe's
priorities for housing and have provided the flexibility tribes need to
carry out their programs.
It is with that upgraded capacity of tribal housing programs
provided for by NAHASDA that we can begin to look at the full landscape
of Federal housing resources and programs. HUD itself has numerous
housing programs and resources, some general, some tribe specific.
Tribal programs include the Indian Community Development Block Grant
(ICDBG), the HUD 184 Native American Loan Guarantee Program, NAHASDA
Title VI Loan Guarantee Program, the formula funded and competitive
IHBG programs, and Native Hawaiian programs. Other HUD programs have
varying levels of eligibility for tribes, and NAIHC has advocated both
to Congress and with our Federal partners to improve tribal access to
these more national programs. The best example is the HUD Housing
Counseling program, which tribes are currently ineligible to apply for
funds but may soon find themselves subject to housing counseling
regulations not tailored for tribal communities. Another example is the
Continuum of Care program, which was addressed last Congress by the
inclusion of the Tribal Access to Homeless Assistance Act in the FY
2021 Consolidated Appropriations Act. NAIHC thanks Senator Smith who
introduced the bill and all the members who supported the passage of
this bill.
In addition to HUD, tribes can find housing resources at the U.S.
Treasury, such as tax credit programs and the recently created
Emergency Rental Assistance Program and Homeowner Assistance Funds; the
U.S. Department of Agriculture and its Rural Housing programs; the
Veterans Administration and its Native American Direct Loan Program;
and others.
NAHASDA was passed in 1996 to streamline tribes' access to housing
programs dollars by consolidating multiple programs into a single block
grant. However, with the lack of increased appropriations to NAHASDA
programs, tribes are again piecing their housing programs together by
finding resources from across the Federal Government. In a 2018 survey
conducted by NAIHC, only 17 percent of our members who responded
indicated they were going to utilize non-HUD funds in their programs.
So while there are various resources available to tribes, it takes a
lot of work to put these pieces together and leverage multiple funding
opportunities together, while also operating the day-to-day housing
program.
Improvements To Existing Housing Programs
Reauthorization of NAHASDA, Increased Resources: NAHASDA was last
reauthorized in 2008 and expired in 2013. While Congress has continued
to provide funding to NAHASDA programs, and even increased some funds
in the last few years, there are some programmatic changes that recent
reauthorization bills contain that could streamline various aspects HUD
and IHBG programs. For example, one long standing fix would address
duplicative environmental reviews, which tribes often face when they
leverage multiple Federal sources of funds. Recent reauthorization
bills have also contained provisions to create an Assistant Secretary
for Indian Housing to provide enhanced attention at the senior
leadership of HUD.
Make HUD-VASH Permanent and Expand to All Tribes: Currently, only
26 tribes have participated in the Tribal HUD-VASH program, which
provides both housing and supportive services to tribal veterans and
their families that are homeless or at-risk of homelessness. HUD-VASH
is another example of a larger, national housing program that
originally left tribal communities out when it was created in 2008.
Congress expanded the program through a tribal demonstration project
beginning in FY 2015. The program has identified obstacles, such as the
lack of housing stock in tribal communities to house veterans through
the program and the need for greater supportive services from the VA to
native veterans in tribal communities. Many of the tribes participating
in the pilot have found ways to provide these supportive services
through various partnerships between the VA and tribal or IHS
professionals and tribes may be more able to secure housing units for
the program if it was made permanent and tribes had more certainty for
future funding of the program.
It is well known that Native Americans have served in the United
States Armed Forces as higher rates than any other demographic, so it
is vital that Native veterans are provided the support they deserve and
have earned through their service. Native veterans are not limited to
the 26 tribes that have participated in the program, and we look
forward to working with Congress to ensure the program is expanded to
include all tribe and their veterans. The full Senate has passed the
Tribal HUD-VASH Act in each of the last two Congresses and has faced
some obstacles in the House. NAIHC will continue to work to address any
outstanding issues to make sure HUD-VASH is made permanent and working
for all tribal communities.
Section 184 Loan Guarantee Program: The 184 Loan Guarantee program
helps a tribe or tribal member secure a mortgage for an existing or
new-construction home by providing a loan guarantee to a private sector
bank or lending institution. While the program is targeted to tribal
communities and nearby service areas, the program has struggled to
incentivize mortgages on trust lands in tribal communities, where many
families reside on land their families have held for generations.
Obstacles include a slow and burdensome title process involving the
Department of the Interior's Bureau of Indian Affairs and banks and
lenders general preference to work with the more familiar property held
``in fee.'' Improvements include streamlining the process at the BIA,
encouraging more private lenders to participate in the program
generally and participate through mortgages specifically on trust
lands.
State Housing Programs and Passthroughs: Several Federal programs,
notably the Low Income Housing Tax Credits and the Housing Trust Fund,
establish funds or processes that operate at the State-level. While
many of these States utilize the unmet housing needs in tribal
communities to improve their allocations, there is not necessarily a
mechanism that requires the States to prioritize tribal areas in
receiving the final benefit of these Federal housing programs. The
result is a mix of effectiveness of these programs in tribal
communities, where the relationship between Sate and tribal officials
can greatly affect the final impact of these programs for tribes. In
States where we see tribal or rural areas receiving some type of
allocation or increased application scores, tribes have been successful
in developing new projects with these Federal funds.
However, there is often a blind eye turned to tribal communities
(and not always intentional) as State programs often believe tribal
housing issues are a Federal issue, or that the tribe can rely on
direct Federal funding. This is not unique to States, as even non-HUD
Federal housing programs can omit tribal communities, believing that
tribes can rely solely on NAHASDA or BIA programs to meet their
community housing needs.
Training and Technical Assistance: The current model of TTA to
tribal housing programs requires tribes to submit requests to HUD
offices. Those requests are then analyzed and then submitted to
national or regional TTA providers, of which NAIHC is one of several.
However, the model likely discourages tribes to request TTA as they
would be submitting requests to the same Federal agency that oversees
their program implementation or funding. NAIHC believes that providing
more flexibility to the TTA providers to receive and respond to tribal
TTA requests directly can improve the delivery of those services and
encourage tribal housing programs to actually address their training
needs.
Restore Access to Section 8 Vouchers: Prior to NAHASDA, many tribes
have been receiving tenant-based vouchers to provide low-income rental
assistance to members in tribal communities. With NAHASDA providing the
single block grant to tribes, NAHASDA expressly restricted tribes from
accessing vouchers moving forward. However, with NAHASDA funds
remaining stagnant (or decreasing due to inflation), tribes find it
difficult to provide the same low-income rental assistance year-to-year
or to expand that assistance as new housing units come online in their
communities. Congress routinely adds vouchers to the larger national
program to keep pace with the need, or to fund existing vouchers
adequately each year, while tribal programs have no similar mechanism.
While the restriction on section 8 vouchers could be removed entirely,
past NAIHC resolutions have called for the specific restoration of
vouchers for LIHTC projects in tribal communities, as the two programs
work together well in the non-tribal setting.
Improve the Effectiveness of non-HUD Housing Programs in Indian
Country: As stated above, there are several Federal housing programs
established outside of HUD. While these programs are often national in
scope, the lack of attention paid by these programs to tribal
communities often limits their impact for native families. For
instance, USDA Rural Housing programs are tailor made for rural areas,
and often are targeted to low-income families, yet their reach to
tribal communities has been limited. Often this is due to USDA program
staff not geographically located near the tribal community or limited
outreach to families in those tribal communities. We're often asking
our overburdened tribal housing professionals to know the USDA programs
well enough to connect those families with USDA resources. A recent
pilot project in South Dakota has allowed the USDA 502 Single Family
Home Loan program to lend to Native CDFIs as intermediaries, while
those Native CDFIs carry out the lending directly in tribal
communities. This has been successful, with the Native CDFIs largely
maxing out their mortgage lending with the funding available under the
pilot. This on-the-ground presence in tribal communities as well as the
comfort level of native families working with native housing
professionals has allowed more native families to access USDA
resources. This model could be expanded both throughout USDA Rural
Housing programs and through other Federal housing programs, such as
the VA's Native American Direct Loan Program. The NADLP program only
have 7-10 staff to market the program and serve Native American
veterans in all 574 tribal communities across the country. As a result
of the lack of presence of that program, very few mortgage loans are
provided to Native veterans each year.
Further Incentivize Private Investment in Tribal Communities:
Indian Country is almost always last to receive the attention of
private, commercial banking. The lack of economies of scale in tribal
communities, increased development costs, and the complexities of
tribal lands and communities (both actual and perceived) simply lead
private banking to avoid tribal areas. While there have been national
tax credit programs or other incentives available for years to spur
development in underserved areas, the programs have generally been less
effective for Indian Country. Strengthening incentives for development
in Indian Country or creating specific set-asides or mandates through
these programs is needed to ensure that tribal communities are not left
further behind.
Including Indian Country in Infrastructure Packages: Development
costs are higher in Indian Country. The rural nature of most tribal
communities and the lack of preexisting roads, water, electricity and
other infrastructure increase the cost of developing new housing. As
Congress works to address the infrastructure needs of the entire
Nation, it must recognize the lack of infrastructure funding over
decades to tribal communities and include Indian Country appropriately.
While NAIHC believes infrastructure should include housing resources
directly, any investments in infrastructure in tribal communities will
improve tribal housing programs' ability to plan and develop new
housing construction in the future.
Impacts of COVID on Tribal Housing
Finally, the COVID-19 pandemic has also highlighted how far behind
we are in meeting the housing needs of Indigenous Peoples of the United
States. The housing shortage in tribal communities causes high levels
of overcrowded homes. The 2017 HUD Assessment estimates that 1 in 6
homes in Native communities suffers from overcrowding, which is eight
times the national average. It is not uncommon for three or more
generations to live under the same roof. These overcrowded conditions
do not allow families from practicing safe social distancing that is
necessary to prevent or reduce the spread of a virus like COVID-19.
The 2017 HUD Housing Needs Assessment also found high rates of
substandard plumbing in 5.6 percent of tribal homes, which is 4 times
the national average. This lack of access to clean water in many homes
means families can't practice the basic safety precaution of adequate
hand-washing and other sanitation practices. With these issues
affecting tribal homes at higher rates, it is no wonder that rates of
infection of COVID-19 are 1.7 times higher than non-native
demographics.
To its credit, Congress has recognized the impacts of COVID-19 on
tribal communities and passed a number of relief packages that include
new resources for tribes and tribal housing programs. Unfortunately,
new homes cannot be built at the snap of a finger, and years of
inadequate funding for tribal housing and infrastructure have left
tribal communities and families with few options to respond to the
immediate impacts of COVID-19 or prevent its spread.
Through the CARES Act last spring, tribal housing programs were
provided $200 million of Indian Housing Block Grant funds, in addition
to annual appropriations. Unfortunately, $200 million for just under
600 grantees does not go far to address the immediate impacts of COVID-
19 on tribal housing. Over half of those grantees received less than
$100,000 in additional funds to respond to their communities' housing
needs under COVID-19. As development of new units and infrastructure
often takes months or years of planning, tribes have been forced to
acquire new housing units for short- or long-term use. However, many
tribes are located in areas where the availability of new units is very
low or of substandard quality and needing improvement. NAIHC
understands that tribal approaches to address their local needs have
varied across the country. Some tribes were able to utilize other
tribal community buildings, in some cases including hotels or casinos,
to alleviate overcrowded conditions or to use as makeshift quarantine
facilities. Many tribes also provided increased rental assistance to
families to allow families to separate into multiple homes. Where local
units were unavailable, some tribes have had to help tribal members
find housing in nearby towns away from tribal centers, sometimes 50-100
miles away.
The CARES Act also provided $100 million for emergency grants under
the Indian Community Development Block Grant. These funds were provided
to 96 tribes. According to a HUD press release, these grants helped
provide for the construction of new rental housing to address
overcrowding and homelessness; the construction of water
infrastructure, including water wells and water lines; the purchase and
renovation of an old clinic facility to facilitate access to testing,
diagnosis, and treatment of Tribal members; and the provision of
emergency food supplies to geographically isolated communities.
With the passage of the American Rescue Plan, tribes will see
another $450 million in Indian Housing Block Grant funding and $280
million emergency grants under the Indian Community Development Block
Grant. NAIHC expects that this additional round of funding will provide
for even greater development or acquisition of new units beyond what
was provided by the CARES Act. One large concern we have heard from
tribes, and the larger housing industry, is that COVID-19 had disrupted
construction materials pipelines and building contractors in a way that
has caused a sharp spike in costs of construction.
Congress has also provided substantial set-asides to tribal housing
programs specifically for rental assistance, utilities, and now
mortgage assistance in tribal communities. These funds will be able to
help thousands of families and individuals in tribal communities across
the country. Combined, the $1.3 billion in rental and mortgage
assistance funds provided to tribes is roughly twice the annual funding
provided under NAHASDA. Tribes and the NAIHC are still working with the
Treasury Department to ensure that these funds are flexible enough to
be fully effective in tribal communities.
Many tribes have already been operating some form of rental
assistance in their communities with their NAHASDA funds, however
because the recent Emergency Rental Assistance Program is operated
through the U.S. Treasury, tribes are having to update their policies
and comply with more rigid eligibility requirements. The additional
time provided in the American Rescue Plan for ERAP grantees will help
alleviate some of these issues by giving tribes more time to find
eligible families and individual households. One issue that NAIHC has
heard consistently is the need to expand the level of eligibility
beyond 80 percent local AMI. Many tribes existing rental assistance
programs have already provided assistance to these community members,
and tribes are seeing families above that eligibility threshold also
struggling to pay rent but ineligible for assistance.
We believe the flexibility that Congress included in the mortgage
assistance program in the American Rescue Plan of expanding eligibility
to 100 percent of the greater of local or national AMI will allow more
families and individuals to receive assistance through that program.
While tribes appreciate the additional resources provided by
Congress over this past year, the lack of progress of new housing
developing in Native communities over the last 20 years cannot be
reversed overnight. COVID-19 has put a spotlight on the extreme housing
shortage in Indian Country. NAIHC hopes the disparate impacts of the
COVID-19 pandemic in tribal communities spurs Congress to work with
Tribes and tribal housing programs to address these long-standing
housing needs in a way that both prevents a future pandemic from
running rampant in our communities and more directly provides equitable
housing opportunities for Native American, Alaska Native and Native
Hawaiians.
Conclusion
NAIHC wants to thank the members of this Committee for holding this
important hearing and we want to thank all the members of Congress who
have introduced and sponsored bills and supported efforts to improve
housing opportunities in tribal communities. Tribes have consistently
shown how far they can stretch their housing dollars to help the most
members of their community as possible, and NAIHC and tribal housing
programs look forward to working with our partners in Congress and
Federal agencies to continue building safe, affordable housing in our
communities.
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PREPARED STATEMENT OF ALENE TCHOURUMOFF
Senior Vice President, Community Development and Center for Indian
Country Development, Federal Reserve Bank of Minneapolis, Minneapolis,
Minnesota
May 27, 2021
Thank you, Chair Smith, Ranking Member Rounds, and Members of the
Committee, for the opportunity to testify today on behalf of the Center
for Indian Country Development at the Federal Reserve Bank of
Minneapolis. The Center for Indian Country Development, or CICD,
supports tribes in reaching their full economic potential through
actionable research and community collaboration to advance solutions in
Indian Country.
Tribal nations in the United States have a range of housing
experiences and challenges. The shared features of housing markets in
Indian Country derive from the long history of Government-to-Government
relationships between the U.S. Government and tribes. These
relationships are codified in the more than 370 treaties signed by both
the United States and American Indian tribes. \1\ Many of these
treaties guarantee American Indian tribes' rights to maintain a home
and a homeland. The promises in these treaties live on in the trust and
treaty responsibility that the Federal Government maintains toward the
574 federally recognized tribes in the United States. And yet, many of
those promises remain unfulfilled.
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\1\ ``Broken Promises: Continuing Federal Funding Shortfall for
Native Americans'', Briefing Report, U.S. Commission on Civil Rights,
December 2018, p. 1.
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This testimony will lay out the scale of housing needs in Indian
Country and describe some approaches to increasing housing availability
for American Indians. Indian Country refers to the tribal lands that
are under the control of sovereign Native nations. About 22 percent of
people that identify as American Indians--whether alone or in
combination with another race or ethnicity--live in Indian Country, and
another 25 percent live nearby. \2\ Thus, a majority of American
Indians live away from Indian Country, often in urban and suburban
areas. \3\ However, many American Indians spend time living both on or
near reservations and in more urban locales, \4\ so our focus today on
the housing issues in Indian Country is relevant to more of the
nation's 5.2 million American Indians and Alaska Natives than Indian
Country's population numbers alone might suggest. \5\
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\2\ Nancy G. Pindus, Thomas Kingsley, Jennifer Biess, Diane Levy,
Jasmine Simington, and Christopher Hayes, ``Housing Needs of American
Indians and Alaska Natives in Tribal Areas: A Report From the
Assessment of American Indian, Alaska Native, and Native Hawaiian
Housing Needs'', U.S. Department of Housing and Urban Development,
Office of Policy Development and Research, January 2017 (hereafter HUD
Tribal Area Study), p. 18.
\3\ Randall Akee, ``Sovereignty and Improved Economic Outcomes for
American Indians: Building on the Gains Made Since 1990'', in Boosting
Wages for U.S. Workers in the New Economy: Ten Essays on Worker Power,
Worker Well-Being, and Equitable Wages, Washington Center for Equitable
Growth, January 2021, p. 163.
\4\ Diane K. Levy, Jennifer Biess, Abby Baum, Nancy Pindus, and
Brittany Murray, ``Housing Needs of American Indians and Alaska Natives
in Urban Areas: A Report From the Assessment of American Indian, Alaska
Native, and Native Hawaiian Housing Needs'', U.S. Department of Housing
and Urban Development, Office of Policy Development and Research,
January 2017 (hereafter HUD Urban Area Study), p. x.
\5\ HUD Tribal Area Study, p. 18.
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Indian Country Faces a Severe Housing Shortage and Substandard Housing
Conditions
Homes on tribal lands are in short supply, and often in physically
substandard condition. Around 16 percent of American Indians and Alaska
Natives in tribal areas live in households that are considered
overcrowded--a rate about seven times higher than that of the general
U.S. population. \6\ Available housing is often physically substandard:
23 percent of American Indians living in Indian Country reside in homes
that have at least one physical problem, compared to about 5 percent of
other Americans. \7\ For example, American Indian households in Indian
Country are 3.7 times as likely as other households to lack complete
plumbing. \8\ A 2017 study from the U.S. Department of Housing and
Urban Development (HUD) estimated that reservations needed an
additional 68,000 units of housing to eliminate overcrowding and
replace severely inadequate units. \9\ Using a plausible range of
possible construction and infrastructure development costs, Indian
Country needs tens of billions of dollars worth of new housing. \10\
---------------------------------------------------------------------------
\6\ HUD Tribal Area Study, p. 67.
\7\ HUD Tribal Area Study, Foreword.
\8\ Shiloh Deitz and Katie Meehan, ``Plumbing Poverty: Mapping Hot
Spots of Racial and Geographic Inequality in U.S. Household Water
Insecurity'', Annals of the American Association of Geographers, 109:4,
2019, pp. 1092-1109.
\9\ HUD Tribal Area Study, p. 76.
\10\ CICD calculations using 2019 Home Mortgage Disclosure Act
data. Lacking reliable data on construction costs, we examine average
home prices and assume that 68,000 new units are needed. These and
other HMDA-derived calculations in this document exclude Alaska and
Hawaii. The cost of constructing new housing may, of course, be
substantially different than the average value of existing homes.
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Overcrowding in Indian Country has serious consequences; HUD
research has shown that it has a negative effect on family health and
contributes to domestic violence and poor school performance. \11\ It
also complicates attempts to gauge home ownership levels. Traditional
measures of home ownership divide the number of owner-occupied housing
units by the number of occupied housing units. In 2010, the 67 percent
home ownership rate in Indian Country was comparable to the overall
U.S. home ownership rate. \12\ But considering that Indian Country
housing units are more likely to be overcrowded and contain multiple
families, the share of people who own the homes they live in is almost
certainly much lower in Indian Country than in the United States
overall. This is supported by data showing lower home ownership rates
in areas of Indian Country that were likely to have higher-quality
supply of housing and thus lower overcrowding rates. \13\
---------------------------------------------------------------------------
\11\ HUD, Fiscal Year 2017 Congressional Justifications, p. 11-4.
\12\ L.S. Pettit, et al., ``Continuity and Change: Demographic,
Socioeconomic, and Housing Conditions of American Indians and Alaska
Natives'', HUD Office of Policy Development and Research, January 2014,
p. 54.
\13\ Miriam Jorgensen, and Randall Akee, ``Accessing Capital and
Credit in Native Communities'', Native Nations Institute, 2017, p. 46.
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Home ownership rates for Native Americans in Indian Country stayed
relatively steady from 2000 to 2010, \14\ contrasting with survey data
showing that 90 percent of Native American renters in tribal areas want
to own their home, \15\ and with long-term economic gains among Native
American households. In the last few decades, tribal economies have
grown considerably. Native Americans living on reservations saw
inflation-adjusted, per-capita income growth of 32.5 percent in the
1990s and 10.5 percent in the 2000s, both well above the corresponding
rates for the U.S. as a whole. \16\
---------------------------------------------------------------------------
\14\ See n. 12.
\15\ HUD Tribal Area Study, p. 86.
\16\ Estimates are for reservations excluding the Navajo Nation.
From Randall Akee and Jonathan Taylor, ``Social and Economic Change on
American Indian Reservations: A Databook of the U.S. Censuses and the
American Community Survey 1990-2010'', The Taylor Policy Group, Inc.,
May 2014.
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How Did Housing Conditions in Indian Country Get to This Point, and Why
Have Housing Problems Persisted Despite Overall Economic Gains?
There are many reasons for the housing issues in Indian Country.
Given the unique status of Native nations and their relationship with
the United States, many of these reasons are tied to the Federal
Government's past actions and present polices. This section of the
testimony will discuss how the following factors contribute to Indian
Country's housing issues:
The prevalence of trust land in Indian Country;
Barriers in access to consumer credit;
Underfunding or underutilization of Indian Country
programs; and
Conflicting or complicating requirements across Federal
programs.
Legal Status of Land in Indian Country Can Be a Challenge for Housing
In Indian Country, the status of land poses unique challenges to
home ownership and housing development. About 60 million acres of
American Indian lands are held in trust by the Federal Government and
managed by the Bureau of Indian Affairs (BIA). \17\ Titles of land held
in trust cannot be conveyed or sold without the consent of the Federal
Government. For years, tribal organizations and lenders that do
business in Indian Country have noted that clearing title for trust
land is much more time-consuming than doing so for nontrust land.
---------------------------------------------------------------------------
\17\ ``Tribal Leaders Handbook on Homeownership'', Federal Reserve
Bank of Minneapolis and Enterprise Community Partners, 2018, p. 79.
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In most cases, obtaining a home mortgage on trust land requires a
certified title status report (TSR) from the BIA. However, borrowers
consistently report delays in the delivery of certified TSRs that
result in longer mortgage timeframes for trust land than for fee-simple
land. As recently as 2019, a tribal leader testified before the United
States Senate Committee on Indian Affairs that residential mortgages on
his reservation were taking more than a year to clear the TSR process,
despite past commitments to a 30-day timeline. CICD has heard anecdotes
about months- or years-long TSR-caused delays.
Barriers in Access to Credit Limit Home Ownership Opportunities
In addition to the TSR process, home buyers on trust land must
often use a leasehold mortgage. Residential mortgage lenders typically
require that a mortgagor pledge as collateral their fee-simple
(ownership) interest in the land underlying the financed real estate.
This option is not available in the tribal residential mortgage context
if the mortgagor leases--rather than owns--the underlying tribal land.
In that case, the residential mortgage lender would require that the
mortgagor pledge leasehold interest in the land (and any leased
buildings).
As well as being procedurally distinct from mortgages in most of
the United States, mortgages are often more expensive in Indian
Country. In 2019, Native American borrowers on reservations who took
out high-priced mortgages received an average interest rate of 7.0
percent, compared to 5.5 percent for White, non-Native American
borrowers with high-priced mortgages who live near reservations. \18\
As a result of this interest-rate differential, White, non-Native
American borrowers living near reservations could pay considerably less
in interest over the lifetime of the mortgage. For example, on a
$200,000 loan, the interest savings would be $70,000. \19\
---------------------------------------------------------------------------
\18\ A ``high-priced'' loan is defined as having an interest rate
at least 1.5 percentage points more than the average prime offer rate.
\19\ CICD calculation assuming a 30-year mortgage.
---------------------------------------------------------------------------
Legal complexities lead many Indian Country mortgages to be
nonconforming-that is, outside the typical requirements of resale to
the Government-sponsored enterprises (GSEs) like Fannie Mae and Freddie
Mac. With this weaker market for mortgage resale or conversion into
mortgage-backed securities, loans in Indian Country for traditional,
stick-built construction are more likely to have higher interest rates.
Under ``duty-to-serve'' requirements, the GSEs are actively working to
address this particular barrier to better mortgage access in Indian
Country.
Potentially to avoid the complexities of leasehold mortgages,
Native Americans on tribal lands turn to manufactured housing at a
higher rate than other Americans. \20\ Loans for manufactured housing,
which are often chattel (personal property) loans rather than mortgage
loans, typically carry higher interest rates than mortgages for
traditional, stick-built homes. \21\ Our economists' analysis suggests
the increased use of manufactured housing in Indian Country--which may
be in part caused by the Indian Country housing challenges discussed in
this testimony--accounts for one-quarter to one-third of the disparity
in mortgage costs that Native Americans face. \22\.
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\20\ Donna Feir, ``The Higher Price of Mortgage Financing for
Native Americans'', CICD Working Paper 2019-06, Federal Reserve Bank of
Minneapolis, 2019.
\21\ Laurie Goodman and Bhargavi Ganesh, ``Four Ways Financing
Differs for Manufactured Homes'', Urban Wire: Housing and Housing
Finance blog, Urban Institute, July 27, 2018.
\22\ See n. 20.
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Appropriations for the Indian Housing Block Grant, a Major Source of
Housing Funding in Indian Country, Have Been Largely Flat Since
Its Inception
The Native American Housing Assistance and Self Determination Act
of 1996 (NAHASDA) bundled previously separate sources of funding into
the Indian Housing Block Grant (IHBG) and gave tribes primary
responsibility over the use of this Federal assistance. From its
initial FY 1998 allocation of $600 million, which was insufficient to
meet the backlog of housing development needs, the IHBG increased to
$650 million in FY 2001 and has remained relatively flat in nominal
dollars since. \23\ Had the initial $600 million appropriation kept
pace with inflation, tribes would have had roughly $3.4 billion more in
2021 dollars to invest in housing through FY 2019. \24\
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\23\ Written testimony of Lourdes Castro Ramirez, Principal Deputy
Assistant Secretary for Public and Indian Housing, U.S. Department of
Housing and Urban Development, United States Senate Committee on Indian
Affairs, ``The President's Fiscal Year 2017 Indian Country Budget'',
March 9, 2016, p. 2.
\24\ CICD staff calculation. Note that this does not include $100
million in FY 2018 and FY 2019 for a new, competitive companion to the
IHBG.
---------------------------------------------------------------------------
Congress added $100 million in competitive funding to the IHBG
appropriation in 2018 and in the past year has made significant
investments of funding for NAHASDA. Pandemic relief through the
Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES Act)
and the American Rescue Plan Act of 2021 provided an additional $650
million. \25\ While this greatly increases the amount of IHBG dollars
available in the short-term, it should be considered in the context of
the estimated tens of billions of dollars needed for new housing in
Indian Country or the housing assistance that cost-burdened households
need. \26\
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\25\ CICD staff analysis of Federal tribal housing appropriations
in the Coronavirus Aid, Relief, and Economic Security Act; Consolidated
Appropriations Act, 2021; and the American Rescue Plan Act of 2021.
\26\ See analysis at n. 9.
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HUD's Section 184 Program Is a Powerful Tool But Take-Up on Tribal
Lands Is Limited
The HUD Indian Home Loan Guarantee Program, commonly known as
Section 184, encourages lenders to finance Native American home buying
by guaranteeing Native Americans' mortgages. The program was originally
available only to mortgages for homes on trust lands, but HUD revised
its Section 184 guidance in response to years of low usage and now
allows for lending off of trust land.
The program is utilized much less frequently on tribal trust lands
as compared to non-tribal lands or tribally owned, non-trust lands.
\27\ In fact, the annual number of Section 184 mortgages made on trust
lands has not shown sustained growth since the early 2000s. \28\
Because Section 184 loans have Federal guarantees and nominally present
no risk to the lender, their limited use on trust land likely results
more from lenders' levels of expertise in working with the program,
their business strategies, or other factors rather than borrowers'
financial characteristics. Based on CICD conversations with some
lenders, when in the early years of the program traditional lenders
invested in the necessary staff capacity to efficiently deploy the
Section 184 program, loans using the Section 184 guarantee seemed to be
profitable for lenders. However, lenders without the needed expertise
may believe that the administrative costs of the program outweigh the
benefits.
---------------------------------------------------------------------------
\27\ Written Testimony of Patrice H. Kunesh, Director, Center for
Indian Country Development, Federal Reserve Bank of Minneapolis, United
State Senate Committee on Indian Affairs, ``Lending Opportunities:
Opening the Door to Homeownership in Indian Country+'', October 16,
2019 (hereafter CICD Lending Opportunities), p. 8.
\28\ CICD Lending Opportunities, p. 8.
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The Complexity of Building in Indian Country Constrains Efforts To Grow
Housing Supply
As discussed above, homes are in short supply and often in
substandard condition on tribal lands. Meanwhile, the high cost and
complexity of building and financing homes in Indian Country stymies
efforts to increase housing availability. In addition, the long history
of disinvestment and unfulfilled Federal commitments has left many
Native nations with inadequate infrastructure, thus limiting access to
necessities like transportation and clean water. \29\ As a result,
building new housing in Indian Country often requires expensive
investments in infrastructure above and beyond the cost of housing
construction alone. Seven out of 10 tribal leaders identified the cost
of infrastructure development as one of the top three barriers to new
housing development in Indian Country, higher than the number that
identified the availability of labor (39 percent) or a lack of funds
(34 percent). \30\
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\29\ U.S. Commission on Civil Rights, Broken Promises report, p.
1. (See n. 1 for full reference.)
\30\ HUD Tribal Area Study, p. 127.
---------------------------------------------------------------------------
Tribal governments developing new housing often use multiple
Federal funding streams. A project may blend resources from both Indian
Country-specific and non-Native-focused programs and agencies like the
BIA, U.S. Department of Agriculture (USDA), U.S. Department of the
Treasury, HUD, or others. This frequent braiding of resources
introduces additional administrative burden and complexity, as programs
vary on everything from income limits to requirements for lead
abatement. Different Federal funding sources may require different
environmental reviews, historic preservation compliance, and cultural
surveys, and each individual review adds time and expense to housing
construction. \31\
---------------------------------------------------------------------------
\31\ U.S. Commission on Civil Rights, Broken Promises report, p.
149. (See n. 1 for full reference.)
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Where Are Some Opportunities To Improve Access to Home Ownership in
Indian Country?
While no quick fixes will radically improve housing conditions in
Indian Country overnight, plenty of innovations are showing promise for
a brighter future. This section describes the following recommendations
from CICD, which are based on our engagement with tribal and community
leaders over the years:
Expand the financial capacity of Native community
development financial institutions and other tribal
institutions;
Eliminate barriers to expanded use of Federal home
ownership programs in Indian Country;
Simplify housing development on tribal land; and
Improve the availability of data on Indian Country and
Indian Country programs.
Expand the Financial Capacity of Native Community Development Financial
Institutions and Other Tribal Institutions
Native community development financial institutions, or Native
CDFIs, offer well-tailored and culturally appropriate lending products
in Indian Country. Encouragingly, the number of Native CDFIs has
quadrupled in the past two decades, driven by tribal community members'
and leaders' interest in taking charge of their own financial futures.
The presence of Native CDFIs in a community is correlated with credit
score improvements for those communities' hardest-to-serve borrowers.
\32\
---------------------------------------------------------------------------
\32\ Michou Kokodoko, Valentina Dimitrova-Grajzl, Peter Grajzl,
and Joseph Guse, ``Native CDFIs Improve Credit Outcomes for Indian
Country Residents'', Federal Reserve Bank of Minneapolis, April 28,
2021.
---------------------------------------------------------------------------
The potential impact of Native CDFIs is limited by the availability
of long-term capital, however. In a Minneapolis Fed survey of Native
CDFIs in 2017, respondents reported that a lack of access to financial
resources meant there was significant unmet demand for their products
and services, including for homebuyers. \33\ The limited access to
secondary markets for mortgages described above constrains the capital
and liquidity available to Native CDFIs.
---------------------------------------------------------------------------
\33\ Michou Kokodoko, ``Findings From the 2017 Native CDFI Survey:
Industry Opportunities and Limitations'', CICD Working Paper 2017-04,
Federal Reserve Bank of Minneapolis, November 28, 2017, p. 16.
---------------------------------------------------------------------------
In the spirit of expanding the availability of financial resources,
depository institutions can consider working with Native CDFIs or other
tribal institutions to develop pathways to home ownership. In September
2020, the Board of Governors of the Federal Reserve System unanimously
voted to approve an Advance Notice of Proposed Rulemaking (ANPR) on the
Community Reinvestment Act (CRA). \34\ The CRA ANPR explicitly
addresses a range of capital and credit challenges in Indian Country
and, in particular, discusses options for encouraging more community
development activity through mission-oriented financial intermediaries,
including Native CDFIs.
---------------------------------------------------------------------------
\34\ Board of Governors of the Federal Reserve System, Community
Reinvestment Act Proposed Rulemaking web page.
---------------------------------------------------------------------------
A pilot conducted under the USDA Single Family Housing Direct Home
Loans program, also known as Section 502, demonstrates the potential
for leveraging Native CDFIs' strengths, such as deep community
relationships and a pipeline of potential homebuyers, within existing
programs. The Section 502 program, while not targeted at Indian
Country, can support rural home ownership in Indian Country by
guaranteeing mortgages for borrowers who cannot easily find
conventional mortgage financing. In one year, two Native CDFIs working
in partnership with the USDA deployed about $2 million worth of
mortgage loans across two South Dakota reservations. The pilot deployed
about 50 percent more loans than had been made on the same reservations
over the prior decade. \35\
---------------------------------------------------------------------------
\35\ CICD analysis of data obtained from the South Dakota Native
Homeownership Coalition.
---------------------------------------------------------------------------
Eliminate Barriers tTo Expanded Use of Federal Home Ownership Programs
in Indian Country
The Federal Government offers multiple Federal home ownership
programs for Indian Country and rural America, including the Section
184 and Section 502 programs and the U.S. Department of Veterans
Affairs' Native American Direct Loan program. However, institutional
challenges limit the usage of these programs to meet their intended
purpose of expanding home ownership among Native Americans and in rural
areas. Eliminating these barriers and expanding the usage of these
programs, particularly by the traditional lenders that provide the
majority of mortgages, is crucial to growing home ownership in Indian
Country.
Some of these barriers result from lenders' hesitancy to work on
leasehold mortgages, delays in the TSR process, or insufficient
technical expertise among lenders to navigate complex Federal programs.
Other issues cut across programs. For example, tribal housing
professionals describe a lack of appraisers familiar with best
practices for valuing properties on tribal lands. Since multiple
agencies have programs that would be improved by addressing these
issues, CICD recommends that these agencies work together--ideally, in
partnership with representatives from the lending community, tribal
governments, and GSEs--to find solutions and provide guidance for
housing professionals in Indian Country working across multiple funding
streams, and leverage resources from mainstream financial institutions.
Simplify Housing Development on Tribal Land
Helping tribes regain stewardship of their lands is critical to
continued housing development. The Helping Expedite and Advance
Responsible Tribal Home Ownership (HEARTH) Act of 2012 created a
process for tribes to assume additional control of trust land
management. Tribes across the United States have used the HEARTH Act to
set up their own processes for furthering development on trust lands.
Our Tribal Leaders Handbook on Homeownership details case studies of
how the HEARTH Act can make a big difference for tribes. \36\
---------------------------------------------------------------------------
\36\ See n. 17.
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For tribes with relatively few financial resources, however, the
HEARTH Act has more limited benefits. Sufficient funding is not
available through the HEARTH Act itself to fund the administrative
capacity necessary for taking over trust-land management from the BIA,
and the cost is simply too high for many tribes. The BIA's website
lists only 56 tribes as of 2020 that have received approval for at
least one aspect of tribal leasing regulations; about a third of these
approvals apply to transactions for residential developments. \37\
---------------------------------------------------------------------------
\37\ BIA, U.S. Department of the Interior, HEARTH Act of 2012.
---------------------------------------------------------------------------
Improving the BIA's TSR process for tribes that are not able to
access the HEARTH Act's opportunities would simplify the process of
development on trust lands. For example, TSRs must be certified as up-
to-date before development can take place, but parties looking to build
on trust land or simply transfer ownership cannot currently turn to a
website to file or track important TSR-related documents or requests.
Significant steps in the process still rely on in-person interactions
and must be carried out using paper. With better collection and
reporting of data, and other practical improvements, Federal policy and
practice could change to reduce TSR-related delays. In 2020, CICD
produced specific recommendations on options to shorten the TSR process
to improve home ownership. \38\
---------------------------------------------------------------------------
\38\ James Robert Colombe, ``Shortening the TSR Timeline: A
Proposal To End Delays That Hinder Native Homeownership'', Federal
Reserve Bank of Minneapolis, September 9, 2020.
---------------------------------------------------------------------------
Better interagency coordination and a focused effort to simplify
requirements for projects in Indian Country that use multiple funding
streams could increase the impact of Federal dollars intended to
support housing construction and development. Further work could build
on the legacy of attempts like the One Stop Mortgage Initiative and
legislation like NAHASDA to support tribal sovereignty and streamline
complexities.
Improve the Availability of Data on Indian Country and Indian Country
Programs
Because better data lead to better policy decisions, there is a
clear need for an improved knowledge infrastructure when it comes to
Indian Country. Data on programs that serve Native Americans are
difficult to find in publicly available venues. For example, both
policymakers and prospective homeowners lack data on the timeliness of
the TRS process. On a positive note, recent legislation will require
HUD to report its progress on accelerating lender applications under
section 184. More readily available data on USDA's Section 502 loan
program and the U.S. Department of Veterans Affairs Native American
Direct Loan would also facilitate more efficient use and procedural
improvements to those programs.
More generally, data on Indian Country and Native Americans are
often insufficient to assess effects of programs and policies or even
to track changes in population-level well-being. With sample sizes too
small to facilitate accurate estimates, American Indians and Alaska
Natives are too often ``asterisked'' or grouped in an ``other''
category in published reports. To address this, CICD will soon release
a regularly updated dashboard of labor market conditions for American
Indians and Alaska Natives throughout the country.
Illuminating economic conditions in Indian Country will require a
large shared effort, and in some cases significant commitments of
financial resources to obtain sufficient statistical samples. This
would have the welcome effect of helping community members,
researchers, tribal leaders, and Federal policymakers track and assess
the impact of public policy and other interventions.
Conclusion
Underinvestment in critical infrastructure, restricted access to
credit, and an inadequate housing supply hinder Native Americans from
the intergenerational wealth-building that home ownership makes
possible in the United States, and even from the basic benefits of
stable, adequate housing.
Recent history shows that Indian Country is beginning to write a
new chapter based on increased support for tribal sovereignty and
economic growth. The financial gaps between Native Americans and the
rest of the U.S. population remain large, but the expanding capacity
among tribal governments, Native-led financial institutions, and
community-based nonprofits shows that the potential for growth is
immense. With stronger and easier-to-navigate Federal policy, housing,
and economic development in Indian Country will not only continue but
accelerate.
______
PREPARED STATEMENT OF MICHAEL GOZE
Chief Executive Officer, American Indian Community Development
Corporation (AICDC), Minneapolis, Minnesota; Chairman, Board of
Commissioners, Ho-Chunk Housing and Community Development Agency
(HHCDA), Tomah, Wisconsin; and Member, Ho-Chunk Nation of Wisconsin
May 27, 2021
Good Morning, I am Michael A. Goze a member off the Ho-Chunk Nation
of Wisconsin. I live in Minneapolis, MN. I am the CEO of the American
Indian Community Development Corporation. I also serve as the
Chairperson for the Ho-Chunk Housing and Community Development Agency
located in Tomah, WI. Being involved with both the Twin Cities Metro
Urban area and the Ho-Chunk Nations low income housing options my
perspectives are meant address concerns of both rural and urban
American Indian Communities.
It is my honor to provide testimony to this Committee this morning.
In looking at the current situation regarding safe, standard, and
affordable housing on Tribal Trust land or within the rural and Urban
settings throughout our Country. American Indians fall far short of the
national average in the percent of home ownership when compared to
their white counterparts. There are several reasons for this disparity.
First, access to mortgage products that meet the specific needs of
the American Indian population. The section 184 Indian Home Loan
Guarantee Program is a home mortgage product specifically designed for
American Indian and Alaska native Families, Alaska villages, Tribes, or
Tribally designated housing entities. Congress established this program
in 1992 to facilitate home ownership and increase access to capital in
Native American Communities. Although this mortgage product has had
some impact it has not equaled the playing field. The number of lending
institutions that offer the Section 184 loan product are limited to a
select few. I would suggest that the Section 184 or a like loan product
would be better served if it was provided through the American Indian
Community Development Financial Institutions (CDFI's) that are a great
asset to Indian Country both on Reservations and in the Urban Areas.
The CDFI's provide a myriad of services all dedicated to the financial
success of its clients.
The work of a CDFI in home ownership is providing Homebuyer
education, Homebuyer counseling, Credit repair, Budgeting,
responsibilities of Homeownership and other aspects of this sometimes
daunting process. A large number of American Indian clients seeking
home ownership are first time homeowners looking to provide family
stability enhancing Community stabilization making these services
important to their individual success. I believe that this relationship
would of benefit through the mortgage process. Currently their clients
make applications for mortgages with other lending institutions
sometimes these are online applications this can be a totally different
experience that have had in the past. To provide an opportunity for
American Indian CDFI's to have a mortgage product like the section 184
will complete the process and provide a higher level of success.
American Indian CDFI's given the opportunity could provide a better
level of service and gain the knowledge and financial benefits of the
mortgage process. Making this a win-win for both the client and the
CDFI.
Second, affordability. Income levels within the American Indian
communities have a substantial effect on the amount a home loan
available to them. With todays housing prices the availability of homes
are scarce in the lower prices ranges. Having a forgivable deferred
loan product that will be reduced over time would be a great investment
into the stabilization of American Indian Families and Communities. An
example would be a reduction in the principle at 5 years, 10 years and
would be forgiven totally at 15 years. Data supports that home
ownership is crucial in the stabilization of families. Having a safe,
standard, and affordable home creates the foundation that promotes
better outcomes in areas of education, health, and financial stability.
Our homes can be the single greatest financial asset in one's life,
making way for families to continue to thrive vs. just survive in our
current economic climate. By investing into our American Indian
families via home ownership we can create an immediate impact into the
lives of our youth, adults, and elders. This type of investment creates
immediate impact and also provides long term impact in the
stabilization of Families and Communities.
Thirdly, Land Trust model. Providing capital for an American Indian
Land Trust would be another tool in making home ownership achievable to
many more potential home owners. It also would provide the American
Indian communities to reclaiming land that was once part of Indian
Country. In Minneapolis we have had much success in using the Land
Trust model to reduce the mortgage loan amount by having the land owned
through a Land Trust. This provides the ability to increase the buying
power of the homeowner by having the land held outside of the mortgage.
It provides a monthly benefit to the homeowner is a reduced monthly
payment. In a Land Trust model, the appreciation is shared by a
predetermined amount should the property be sold. The Land Trust model
can also be beneficial in continued housing affordability for the
Community by the reinvestment of appreciation by the Land Trust.
Lastly, In today's times we need to use every financial opportunity
to help American Indian families understand and relish in the benefits
of home ownership. We need to use a number of new initiatives to make
home ownership possible. We at AICDC have used several City, County,
and State funding options including grants, deferred loans and other
home ownership incentives. We have benefited for the Federal Home Loan
Bank of Des Monies Native American Homeownership Initiative (NAHI) in
providing downpayment assistance. We look to our Federal partners to
help in providing opportunities to increase Homeownership to the
American Indian Families throughout the Urban and Tribal lands of our
great Country.
I thank you for your attention to this matter.
______
PREPARED STATEMENT OF ERIC SHEPHERD
Executive Director, Sisseton-Wahpeton Housing Authority, Sisseton,
South Dakota; and Member, Sisseton Wahpeton Oyate
May 27, 2021
I'd like to thank Chairman Brown, Vice-Chairman Toomey, Senator
Rounds, and the other Members of the Subcommittee for this opportunity
to talk about Indian housing today. It has been an especially hard and
challenging 15 months for those of us on the Sisseton-Wapheton
Reservation in South Dakota. We were hit early and hard with the COVID
pandemic at home and we are still working on recovery. Housing has been
at the forefront of the recovery efforts, providing a safe place for
our members to shelter and recover and managing the many new relief
programs that you in Congress have provided to us.
A large part of our recovery effort at Sisseton-Wapheton involves
looking past the pandemic and into the long-term status of Indian
housing programs, both on our Reservation and the United States as a
whole. The perennially inadequate funding and other program issues that
existed prior to 2020 must now be addressed to assure the long-term
sustainability of Indian housing for the first Americans. To put it
more plainly, we all must understand something is wrong when the base
level appropriation for the Native American Housing Assistance and
Self-Determination Act (NAHASDA) has not been increased since the law
was originally passed 25 years ago. As Congress and the new Biden
administration focuses on helping American rebuild its dilapidated
infrastructure and recalibrate is housing assistance programs, Indian
Country and Indian housing must also be given fair consideration.
I know the Subcommittee has a particular interest in the HUD
Section 184 program operating in Indian Country. I can tell you that
the 184 program has had limited impact on reservation lands held in
trust by the United States--while a few individuals have been able to
secure leasehold mortgages under the program, most of the funds go to
off-reservation lands and urban areas where banks and lenders are more
comfortable with providing traditional mortgages. The situation has not
been helped with HUD's recent revision or the program regulations that
send the program back in time before the 184 Act was passed in 1992--
requiring underwriting provisions and fees that are not affordable or
helpful to developing new housing on reservation lands.
I would like to call the Subcommittee's attention to a number of
other important issues that Congress should address regarding Indian
housing programs:
1. We Appreciate the Emergency Funds Received to Date and Need To
Receive a Fair Share of the New Housing Infrastucture Funds as Well:
The CARES Act, the Consolidated Appropriations Act of 2021, and the
American Rescue Plan, have all included much needed emergency funds to
support Indian Housing operations during the pandemic. We do appreciate
that Congress has allocated money to alleviate the short-term effects
of the COVID-19 pandemic. We can confirm that this money had an
immediate and vital impact on preserving and protecting housing
services and resources in our tribal communities. Our proposal is to
now address the more long-term and sustainable solutions to improving
Indian housing. The recently proposed American Jobs Plan includes $231
billion to improve and produce more housing and housing
infrastructure--including a proposed amount of at least $50 billion to
renovate and rehabilitate federally assisted housing. We are asking you
to help insure that, if new infrastructure legislation is passed,
Indian housing continue to get its fair share of the funding (e.g., a
5-percent set-aside for Indian housing would be $2.5 billion). As you
are aware, Federal programs have long-neglected Indian Country's need
to maintain and improve its aging housing stock.
Housing needs in tribal areas remain the most severe in the nation
and resources to address the problem have declined more rapidly than
for other Federal housing programs. Katherine M. O'Regan, Assistant
Secretary for PD&R, HUD, Report in the Forward (see below).
Tens of thousands of new units are needed. Thousands of existing
units, some which are currently boarded up because of lack of funding
and severe methamphetamine contamination, are also in need of
substantial rehabilitation. The simple fact is that $2,500,000,000
(two-billion five-hundred million dollars) of additional new funding is
needed if these conditions are going to be effectively addressed.
Tribes and their TDHEs have the capacity to build and rehabilitate
their housing. Most observers know and most studies show, including the
recent ``Housing Needs of American Indians and Alaska Natives in Tribal
Areas: A Report From the Assessment of Americans Indian, Alaska Native,
and Native Hawaiian Housing Needs'', by HUD PD&R and the Urban
Institute, January 2017 (the Report), \1\ that TDHEs have, or if needed
can quickly reacquire, the capacity to build housing and other related
infrastructure construction on this scale. TDHEs are prepared to
quickly gear up to produce a substantial number of new units. This will
help tribes and Alaska villages generate for their communities and the
country post-pandemic economic recovery--just as they did successfully
10 years ago after the Great Recession with American Recovery and
Reinvestment Act (ARRA) moneys.
---------------------------------------------------------------------------
\1\ The Study and final Reports are available for download at:
https://www.huduser.gov/portal/native-american-assessment/home.html.
---------------------------------------------------------------------------
Tribes have demonstrated the capacity to construct and rehabilitate
housing for low income families at substantial levels under the NAHASDA
framework. Their ability to effectively use an unexpected injection of
funding under the American Recovery and Reinvestment Act (ARRA) of 2009
toward these ends in a very limited time period is particularly strong
evidence supporting this conclusion. Page 10, Executive Summary of the
Report.
It is our recommendation and opinion that these new funds should be
evenly divided between HUD's Indian Housing Block Grants (IHBG) and
IHBG Competitive Grants. Using the existing IHBG program to deliver
some of this money would allow some of the grants to be allocated using
the NAHASDA allocation formula. By this method, half of the money would
be divided up among all the tribal and Alaska Native TDHEs. Then using
IHBG Competitive Grants, HUD can award the other half of the funds to
the those TDHEs that have the greatest need, but who also have the
capacity required to quickly and effectively deliver this badly needed
housing and to contribute to economic resurgence. This is exactly how
TDHEs were successful when called upon a decade ago to use ARRA moneys.
2. Reauthorization and Expansion of Drug Elimination Program (42
U.S.C. 11908)--This HUD program was highly successful in assisting
tribes with funds to prevent and mitigate criminal and drug activity in
their communities, but it has not been reauthorized since 2003 and
monies have not been appropriated since 1999. With the renewed problems
of methamphetamines and other drugs requiring tribally designated
housing entities to expend large portions of their NAHASDA housing
funds to clean-up meth and drug contaminated homes, we believe that the
program should be reauthorized, new funds be appropriated, and eligible
uses of funds expanded to include methamphetamine and toxic drug clean
up.
3. Reauthorization of Nahasda--We also want to recommend, if the
opportunity arises, that NAHASDA be reauthorized. Such formal
reauthorization is long overdue (NAHASDA has not be reauthorized since
2008). And if this should happen, we continue to join with most other
tribes, TDHEs and national and regional native housing associations to
advocate that the reauthorization modify the existing NAHASDA 30
percent rental payment rule.
If the Country fails now to address the plight of Indian housing,
it would be disastrous to tribes and Alaska Native communities, and to
those hundreds of thousands of Native people and families who suffer so
greatly with overcrowded and severely substandard housing. Most tribal
and Alaska Native people that today live in Indian areas, their
governments and their TDHEs, have no other option but to look to the
Federal Government for the housing funds that they so badly need. For
the United States to continue, at this particular moment in history, to
ignore these tribal needs would be nothing short of a tragedy and sadly
yet another abandonment by the United States of longstanding concerns
and obligations to tribal sovereigns, Indian people, and Alaska
Natives.
Thank you again for the opportunity to submit this testimony. I
would be glad to answer any questions the Subcommittee might have.
RESPONSES TO WRITTEN QUESTIONS OF
SENATOR CORTEZ MASTO FROM DANTE DESIDERIO
Q.1. In our discussion, you noted that the Federal Home Loan
Banks have played a very limited role in investing with tribes.
Do you have additional information on why tribes lack access to
FHLBank investments and advances (loans)? Is it due to a lack
of a local partner: a bank, a credit union, a housing finance
agency, a Community Development Financial Institution? A lack
of familiarity with the FHLBank system by the tribes? Or that
the FHLBanks have not sought to serve tribes?
How can we make FHLBank resources and investments more
accessible to tribes seeking housing, community development,
and infrastructure investments?
A.1. Response not received in time for publication.
Q.2. The report, ``The Higher Price of Mortgage Financing for
Native Americans'', notes that as of 2012, nearly 30 percent of
all mortgage loans given on reservation tracts were higher
cost. This is three times the proportion of loans that are
higher-priced than for any other racial or ethnic group in
reservation tracts or tracts nearby.
Fannie Mae and Freddie Mac have a duty-to-serve
manufactured homebuyers and rural communities. How are Fannie
Mae and Freddie Mac supporting affordable financing for Native
American communities?
A.2. Response not received in time for publication.
Q.3. Can you elaborate on the role of the Indian CDBG program
to your tribes and its impact on affordable housing and
community development?
A.3. Response not received in time for publication.
Q.4. Can you discuss the impact of the additional ICDBG funds
allocated through the CARES Act? What was the impact of those
funds on your tribes?
A.4. Response not received in time for publication.
------
RESPONSES TO WRITTEN QUESTIONS OF
SENATOR CORTEZ MASTO FROM ADRIAN STEVENS
Q.1. How have the Federal Home Loan Banks worked with the
National American Indian Housing Council and your members?
A.1. The Federal Home Loan Banks have been a supporting partner
directly to NAIHC for a number of years. Additionally, FHLB has
been a regular presence at NAIHC hosted annual events, with
both information booths and staff present to meet and learn
from tribal housing professionals. The different branches of
FHLB have provided varying levels of participation in a manner
largely consistent with the levels of Native American tribes or
communities within each branch's footprint.
Q.2. Nearly all Federal Home Loan Bank investments require a
local partner--a bank, a credit union, a housing finance
agency, a Community Development Financial Institution. How
accessible are those partners for tribes who seek housing,
community development and infrastructure investments?
A.2. Tribal communities have consistently been underbanked and
underserved communities for decades. Many tribal communities
still do not have a bank physically located in its area, which
makes it difficult for many tribal members to access banking
services in a manner many Americans take for granted. Over the
past 20 years or so, Native CDFIs have begun to fill that gap,
providing much needed services in these communities. FHLB has
conducted some work with Native CDFIs but that outreach and
subsequent investment in Native CDFIs can be improved, by both
FHLB and other commercial and governmental banking
institutions.
Q.3. The report, ``The Higher Price of Mortgage Financing for
Native Americans'', notes that as of 2012, nearly 30 percent of
all mortgage loans given on reservation tracts were higher
cost. This is three times the proportion of loans that are
higher-priced than for any other racial or ethnic group in
reservation tracts or tracts nearby.
A.3. Fannie Mae and Freddie Mac have a duty-to-serve
manufactured homebuyers and rural communities. How are Fannie
Mae and Freddie Mac supporting affordable financing for Native
American communities?
Fannie Mae and Freddie Mac have been including more tribal
organizations and professionals in their outreach and
consultation efforts. These efforts improve both Fannie and
Freddie's understanding of obstacles, needs and opportunities
in Indian Country, and also improves the awareness of Fannie
and Freddie services among our tribal housing professionals. In
addition to understanding what mortgage and lending products
Fannie and Freddie can provide directly to tribal communities,
Fannie and Freddie have also been working to better understand
how to invest in existing Native CDFIs and other banking
institutions active in tribal communities, including accepting
various Federal loan guarantee products through the secondary
market.
Like many commercial and Government sector initiatives
aiming to improve services to underserved communities, NAIHC
would urge these organizations (and Congress where appropriate)
to consider services to tribal communities specifically as
tribes are often one of the last ``underserved'' markets to be
affected by these initiatives when the various underserved
demographics are targeted all together.
Q.4. The Center for Indian Country Development's report, ``The
Higher Price of Mortgage Financing for Native Americans'',
finds that about 31 percent of Native Americans who bought
homes on reservation land during the study's timeframe bought a
manufactured home. The report finds that manufactured home
loans are much more likely to be high-cost loans. An article in
the Seattle Times in 2015 reported that a Clayton Homes sales
person told a Navajo woman, shopping for a manufactured home,
that Vanderbilt was the only lender that finances on her
reservation. That was untrue.
A.4. That article was part of a series of articles on predatory
manufactured housing financing in the Seattle Times from 2015
and 2016. They found that Native Americans were targeted by
steering practices by manufactured home sales people before the
Consumer Financial Protection Bureau banned the practice.
Unfortunately, in 2018, Congress reversed the prohibition
on steering and permitted manufactured home salespeople to
recommend lenders affiliated with the manufactured home
manufacturers.
Have you seen a return of steering to affiliated--and high-
cost lenders--when people buy a manufactured home? What loan
products are available to homeowners seeking to purchase a
manufactured home on tribal lands?
While I am not aware of any specific instances of predatory
steering to high-cost lenders, the overall lack of lending or
mortgage options across Indian Country would make the practice
fairly easy to carry out. Many Native American customers are
likely unaware of other loan options that may be available to
them. The marketing of existing, competitive loan products is
fairly scarce in Indian Country as sparsely populated rural
areas do not often provide many lenders with a good return on
their marketing investment.
------
RESPONSES TO WRITTEN QUESTIONS OF CHAIR SMITH
FROM ALENE TCHOURUMOFF
Q.1. How can Congress support positive emerging trends in
housing in Indian Country?
A.1. The Native American Housing Assistance and Self
Determination Act of 1996 (NAHASDA) represented an important
turning point in the Federal Government's approach to housing
in Indian Country.
NAHASDA empowered tribal governments and other Native
leaders to pursue their own visions for housing in their
communities. Today, two conditions present opportunities for
Congress to build on the capacity for ambitious housing,
community, and economic development among tribal nations and
their partners.
First, Native community development financial institutions
(CDFIs) are a relatively recent and promising innovation whose
impact can grow further still. Lack of capital access in Indian
Country comprises barriers not just for the success of
potential homeowners or housing developers, but also for
entrepreneurs and households. While Native CDFIs' work cannot
single-handedly rectify this problem, research from the Federal
Reserve Bank of Minneapolis demonstrates Native CDFIs' efficacy
and suggests that many Native CDFIs would be in a position to
quickly meet even more credit needs if they had additional
capital.
Second, funding for COVID-19 relief has brought large
amounts of resources to Indian Country. Policy changes could
reduce delays or other hindrances caused by the longstanding
barriers to development that are described below. Funding
parameters could also support innovative practices that reflect
the unique needs of tribal communities. For many Native
nations, a more robust economic future is delayed by a lack of
access to capital and funding opportunities.
Increase the Capacity of Native CDFIs
Congress can support access to credit by bolstering
resources for the formation and success of Native CDFIs. Credit
is foundational to home ownership and housing stability. Our
research suggests Native CDFIs improve access to credit for
people in Indian Country. \1\ The number of Native CDFIs
quadrupled over the past 20 years, from 16 in 2001 to more than
70 in 2021. \2\
---------------------------------------------------------------------------
\1\ Kokodoko, Michou, and Peter Grajzl, Valentina Dimitrova-
Grajzl, and Joseph Gruse. ``Native CDFIs Improve Credit Outcomes for
Indian Country Residents''. Federal Reserve Bank of Minneapolis, April
2021.
\2\ Ibid.
---------------------------------------------------------------------------
In some cases, support for Native CDFIs could mean
providing better access to resources that already exist. For
example, the U.S. Department of Agriculture (USDA) Section 502
program offers home loans to low- and very low-income rural
borrowers. While there are many potential 502 borrowers in
Indian Country, the program has had difficulty reaching tribal
borrowers, especially on trust land.
A recent pilot had the USDA partner with Native CDFIs in
South Dakota to increase Section 502 lending on two
reservations. In a single year, the partnership led to 50
percent more Section 502-guaranteed loans on those reservations
than had been made in the previous decade. That pilot
demonstrated Native CDFIs' potential for increasing home
ownership if Federal agencies work with them as intermediaries.
Our survey research suggests that Native CDFIs can deploy
more resources to Indian Country residents via their existing
lines of business. Surveyed Native CDFIs reported more demand
for their services than their current financial capacity could
meet. \3\
---------------------------------------------------------------------------
\3\ Kokodoko, Michou. ``Findings From the 2017 Native CDFI Survey:
Industry Opportunities and Limitations''. Federal Reserve Bank of
Minneapolis, November 2017.
---------------------------------------------------------------------------
Another indication of the robust demand for Native CDFIs'
services comes from the Oweesta Corporation, an intermediary
for about 30 of the Nation's Native CDFIs. Oweesta's member
Native CDFIs reported $19,483,123 in housing loans in 2020.
Around $13 million was for home purchases, $2 million for
construction, and $4 million for home repair. Several of the
Oweesta-member Native CDFIs have begun offering new home loan
products in response to an increase in demand.
Increased resources for Native CDFIs could provide more
Native families with a path to home ownership. But even with
more dollars at their disposal, Native CDFIs will not be able
to fill the role in Indian Country that thousands of lenders
play for the broader United States. For larger-scale progress
to be made, Native CDFIs' best practices and knowledge could be
paired with the resources of the conventional lenders in the
U.S. mortgage market.
Some Center for Indian Country Development (CICD) contacts
specifically cite barriers in accessing secondary markets as an
important constraint on the ability of conventional lenders and
Native CDFIs to invest in housing in Indian Country. Congress
could create an expectation for Fannie Mae and Freddie Mac, or
other Federal actors like the Federal Home Loan Banks, to
develop better processes for incorporating Indian Country into
the secondary market.
Providing direction or setting targets could accelerate
avenues that are currently opening up to increased Indian
Country mortgage activity. For example, new approaches could be
developed via the ``duty-to-serve'' processes of Fannie Mae and
Freddie Mac. Duty-to-serve requires these two Government-
sponsored enterprises, or GSEs, to develop plans to improve the
flow of mortgage investments to certain underserved markets.
Currently, Fannie Mae's process requires a memorandum of
understanding to be approved by each participating tribal
government. Tribal laws must meet Fannie Mae's requirements for
protecting borrowers and lenders. Four tribes have signed
agreements with Fannie Mae to bring that GSE's mortgage
products to their respective nations.
While Fannie Mae offers model tribal lending procedures,
pursuing MOUs on a tribe-by-tribe basis will likely take many
years to achieve scale. Additional resources for outreach or
technical assistance could increase the number of tribes
pursuing such agreements--and the number of lenders interested
in working with them.
As secondary markets open to Indian Country, Native CDFIs
could serve important roles as both lenders and intermediaries.
Conventional lenders interested in doing more business in
Indian Country could benefit from engaging with Native CDFIs
and understanding the best practices Native CDFIs have
developed for serving markets within Native nations.
Streamline Access to Relief Funding
Historic amounts of Federal money are supporting local
governments' pandemic recovery efforts. However, because of the
longstanding housing needs in Indian Country, this targeted
Federal funding should be a floor and not a ceiling. That is,
tribal governments, housing developers, nonprofits, Native
CDFIs, and other institutions with bold and high-impact ideas
in Indian Country should not be barred from accessing Federal
funding streams to support those ideas if they cannot be
pursued with Indian Country-specific dollars alone.
As it stands, nontargeted housing-related funds are often
unavailable to tribes. Tribes are statutorily restricted from
accessing some housing dollars, even though State-level
allocations may be calculated, in part, based on the Indian
Country population in a State. For example, tribes typically
cannot directly receive Community Development Block Grants or
housing choice vouchers. \4\
---------------------------------------------------------------------------
\4\ Jones, Katie. ``The Native American Housing Assistance and
Self-Determination Act of 1996 (NAHASDA): Background and Funding''.
Congressional Research Service, November 2015. P. 2.
---------------------------------------------------------------------------
These changes were a part of NAHASDA. That legislation
aimed to support tribal sovereignty, in part by creating
programs targeted to Indian Country, like the Indian Housing
Block Grant (IHBG). While tribes do benefit from Federal
resources via NAHASDA that are specifically designated for
Native nations, these resources are too often an inadequate
substitute for access to the broader set of Federal supports.
The inflation-adjusted value of IHBG's funding has
decreased over time and, even if it had kept pace with
inflation, would not be able to fully address housing needs in
Indian Country. \5\ Furthermore, some of the dollars
distributed through tribal-specific programs are distributed on
a competitive basis and may be inaccessible to tribes with more
limited capacity for application processes.
---------------------------------------------------------------------------
\5\ Tchourumoff, Alene. ``Housing for Native Americans: Review of
Federal Programs, Barriers, and Opportunities''. Written testimony
provided for United States Senate Subcommittee on Housing,
Transportation, and Community Development of the United States Senate
Committee on Banking, Housing, and Urban Affairs, May 2021. P. 5.
---------------------------------------------------------------------------
Beyond considering tribes' eligibility for Federal dollars,
the Federal Government should continue to examine and address
barriers to efficiency that tribes and their partners encounter
when they try to leverage dollars from multiple sources in
support of housing projects. Environmental reviews are often
cited as one particular area where a lack of coordination
across Federal programs can add cost and delays to Indian
Country projects. \6\
---------------------------------------------------------------------------
\6\ ``Native American Housing: Additional Actions Needed To Better
Support Tribal Efforts''. U.S. Government Accountability Office, March
2014. P. 16.
---------------------------------------------------------------------------
In 2015, the U.S. Department of Housing and Urban
Development (HUD) convened a working group to address the
environmental-review issue. The issue is still cited as a
problem by some tribal leaders in the CICD network. \7\
Development in Indian Country could be facilitated by more
streamlined procedures, like a central application tribal
stakeholders could complete for multiple housing programs at
once while uploading program-specific requirements as
necessary.
---------------------------------------------------------------------------
\7\ Nancy G. Pindus, Thomas Kingsley, Jennifer Biess, Diane Levy,
Jasmine Simington, and Christopher Hayes, ``Housing Needs of American
Indians and Alaska Natives in Tribal Areas: A Report From the
Assessment of American Indian, Alaska Native, and Native Hawaiian
Housing Needs''. HUD, Office of Policy Development and Research,
January 2017 (hereafter HUD Tribal Area Study). Pp. 130-132.
---------------------------------------------------------------------------
------
RESPONSES TO WRITTEN QUESTIONS OF
SENATOR CORTEZ MASTO FROM ALENE TCHOURUMOFF
Q.1. Can you give us a sense of the costs we should consider
when providing financing for new housing production on tribal
lands?
A.1. Native nations' history, geography, and access to credit
can raise costs for developers working in Indian Country. Some
of these costs are unavoidable--there are no short-term
workarounds for Indian Country's long-underdeveloped
infrastructure, for example. Others, like titling issues, may
be addressed through policy reforms that are discussed
elsewhere in this document.
Infrastructure
Infrastructure like water systems, sewage treatment
facilities, electricity, and roads was one the most-cited
response by tribal leaders surveyed in 2017 about barriers to
Indian Country development. \1\ As of 2015, the unmet need in
Indian Country for safe drinking water and adequate wastewater
treatment alone amounted to about $3 billion. \2\
---------------------------------------------------------------------------
\1\ HUD Tribal Area Study. P. 127.
\2\ ``Broken Promises: Continuing Federal Funding Shortfall for
Native Americans'', Briefing Report, U.S. Commission on Civil Rights,
December 2018. P. 86.
---------------------------------------------------------------------------
This means housing projects in Indian Country may be at a
disadvantage on a cost-per-unit basis relative to other
projects aimed at supporting low-income housing. Additionally,
the time required to build out necessary infrastructure to
accommodate housing developments in Indian Country may further
delay the realization of home ownership for tribal families.
Policies aimed at incentivizing Indian Country investment must
reflect this reality. Otherwise, competitive or formula-based
funding may actually disadvantage projects on tribal land.
Title and Appraisals
Costs related to the titling process are well-documented.
My written testimony contains a few ideas for improving the
titling process, including more support for tribes interested
in pursuing the approach enabled by the Helping Expedite and
Advance Responsible Tribal Homeownership Act. \3\
---------------------------------------------------------------------------
\3\ Tchourumoff, Alene. ``Housing for Native Americans: Review of
Federal Programs, Barriers, and Opportunities''. P. 9.
---------------------------------------------------------------------------
The titling process and appraisal situation can extend the
timeline for completion of Indian Country projects in ways that
disadvantage them. The Bureau of Indian Affairs (BIA) title
status report (TSR) process is frequently cited as a hurdle for
loans in Indian Country. A 30-day timeline for BIA title
processing is a reasonable goal and could ease lending in
Indian Country.
Steps have been taken to improve the TSR process, but data
are not available to gauge any progress. Anecdotal evidence
suggests there is variation across BIA offices, and that the
process can sometimes take more than 6 months. \4\
---------------------------------------------------------------------------
\4\ Colombe, James. ``Shortening the TSR Timeline: A Proposal To
End Delays That Hinder Native Homeownership''. Federal Reserve Bank of
Minneapolis, September 2020.
---------------------------------------------------------------------------
In addition to titling, we often hear about delays or extra
costs incurred due to the appraisal process. Real estate
markets in rural areas typically feature fewer transactions
than in metro areas. Thus, the appraisal methods that work in
more densely populated areas can be less effective. Things
become even more complicated when adding in the infrastructure
and unique land-ownership structure in Indian Country.
Cost-based appraisals, which focus on the value of
improvements on a piece of property, are a viable alternative.
Some organizations are already attempting to popularize this
type of appraisal, \5\ which can circumvent some of the most
common barriers to more-prevalent appraisal techniques'
application in Indian Country. Appraisers are usually empowered
to choose the cost-based-appraisal method. But we often hear
that appraisers are untrained in or unwilling to apply the
technique.
---------------------------------------------------------------------------
\5\ See, for example, Fannie Mae's ``Appraising Properties on
Tribal Lands''.
---------------------------------------------------------------------------
Access to Credit
Credit is generally harder to come by and more expensive in
Indian Country. CICD research shows that consumers looking for
a mortgage pay higher prices on reservations. \6\ Testimony
from Indian Country leaders indicates that credit is also often
more expensive for tribal governments, developers, and small
businesses. Evidence from loan guarantee programs like HUD's
Section 184 suggest that the higher-interest costs are not
entirely based on objective measures of risk and may be
influenced by lenders' misperceptions of risk in Indian Country
investments.
---------------------------------------------------------------------------
\6\ Feir, Donna, and Laura Cattaneo. ``The Higher Price of
Mortgage Financing for Native Americans''. Federal Reserve Bank of
Minneapolis, September 2019. P. 1.
---------------------------------------------------------------------------
The increased cost of credit impacts borrowers at an
individual level, as they pay money in interest that could be
spent elsewhere. Evidence suggests that the Native-White wealth
gap in the United States is high, and that the home ownership
gap contributes to this disparity. \7\ At an institutional
level, Indian Country's ability to leverage Federal and other
resources is limited, because the costs of debt service in
Indian Country are higher. Higher-cost, harder-to-find credit
can harm privately financed projects, and also means the reach
and efficiency of Federal programs that rely on public-private
collaborations may be limited. \8\
---------------------------------------------------------------------------
\7\ Ibid. P. 6.
\8\ See, for example, Freddie Mac's examination of Low Income
Housing Tax Credit (LIHTC) usage in Indian Country. Freddie Mac, the
largest funder of affordable housing in the United States, did not
finance a LIHTC investment in Indian Country until 2019, 35 years into
the program's existence.
Q.2. What policy recommendations for the manufactured-home
market should we consider to lower the cost of mortgages for
home buyers, especially Native Americans, purchasing a
---------------------------------------------------------------------------
manufactured home?
A.2. Manufactured housing is one of the largest sources of so-
called ``naturally occurring affordable housing.'' \9\ Advances
in manufacturing and transportation make the sector well-
positioned to play a part in the future housing market. Even
accounting for the costs of transporting and installing a
foundation, a typical manufactured home can offer significant
price advantages over site-built homes. \10\
---------------------------------------------------------------------------
\9\ ``Factory-Built Housing for Affordability, Efficiency, and
Resilience''. Evidence Matters, HUD, Winter/Spring 2020. Accessed July
13, 2021.
\10\ ``Manufactured Homes: An Affordable Housing Option''. Tribal
Leaders Handbook on Homeownership, Chapter 11, Federal Reserve Bank of
Minneapolis, 2018.
---------------------------------------------------------------------------
However, higher interest rates for manufactured-home
owners' mortgages eat away at these savings. And other
procedural barriers and possible market imperfections can make
the purchase of a manufactured home unnecessarily difficult.
Like many people in rural areas, would-be purchasers of
manufactured housing face a number of challenges in obtaining
financing. Standard appraisals can be an issue, due to a lack
of volume of comparable sales, and many lenders fail to invest
significant resources in pursuing business in smaller markets
for smaller-dollar loans. Manufactured-home buyers seeking
loans face some outdated perceptions about the quality of
manufactured housing itself, and often need to pursue chattel
loans as opposed to standard mortgages. Lenders and State
housing finance agencies report difficulties in or are unaware
of options for selling manufactured home loans to a secondary
market--when such options even exist.
Evidence suggests that some of the barriers to purchasing
homes and building wealth for some manufactured home buyers are
even more present in Indian Country. These issues can be
addressed--and, if they are, consumers may enjoy greater access
to a potential source of affordable home ownership.
Loan Type and Quality
Manufactured homes are distinct from other types of housing
in that they may be purchased on credit with either a chattel
loan or a mortgage. Chattel loans apply only to the physical
structure of the home, whereas a mortgage encompasses the land
underneath the home. Chattel loans have fewer protections for
borrowers, \11\ are more expensive, \12\ and are subject to
much higher denial rates. \13\
---------------------------------------------------------------------------
\11\ Ibid.
\12\ Ibid.
\13\ Russell, Jessica, Nora O'Reilly, Karl Schneider, Nicolas
Melton, Nick Schwartz, and Sam Leitner. ``Manufactured Housing Finance:
New Insights From the Home Mortgage Disclosure Act''. Consumer
Financial Protection Bureau, May 2021 (hereafter CFPB Manufactured-
Housing Study). P. 5.
---------------------------------------------------------------------------
Chattel loans may still be advantageous in some situations
where a borrower does not own the land underneath a home.
However, data show that borrowers of color or Native Americans
are more likely to receive a chattel loan, even when they own
the land underneath the home. \14\ By one estimate, as many as
53 percent of chattel loan recipients may have been eligible
for a standard mortgage. \15\
---------------------------------------------------------------------------
\14\ CFPB Manufactured-Housing Study. Report summary website.
\15\ See n. 9.
---------------------------------------------------------------------------
In many other cases, including in Indian Country, a
borrower may hold a lease on the land underneath a manufactured
home. Their leaseholder rights can last longer than standard
mortgage-loan terms--that is, a leaseholder might be given a
99- or 50-year lease, longer than the standard 30-year mortgage
term. This makes the difficulties in attaining a mortgage even
more confounding.
Market concentration may raise prices for borrowers and
limit lending volumes. Borrowers have relatively few options
for structures and loans in the manufactured-housing market.
\16\ As of 2016, the four most-active manufactured-home loan
companies in Indian Country captured 80 percent of the total
market \17\--and two of those companies are owned by a single
firm, Clayton Homes. \18\ In some cases, lenders will only work
with specific manufactured-housing dealers. \19\
---------------------------------------------------------------------------
\16\ See n. 14.
\17\ Johnson, Kevin, and Richard Todd. ``Manufactured-Home Lending
to American Indians in Indian Country Remains Highly Concentrated''.
Federal Reserve Bank of Minneapolis, December 2017.
\18\ Ibid.
\19\ See n. 10.
---------------------------------------------------------------------------
Whether owing to the market concentration or some other
reason, manufactured-home owners are also much less likely to
refinance their mortgages compared to site-built-home owners,
even when market conditions are very favorable for refinancing
(like they are now). \20\
---------------------------------------------------------------------------
\20\ CFPB Manufactured Housing Study. P. 21.
---------------------------------------------------------------------------
Site-built-home owners in metro areas may have become
accustomed to receiving regular, unsolicited offers to
refinance their homes. Manufactured-home owners, on the other
hand, may struggle to find a lender willing to work with them
on a refinance.
This phenomenon is worth further study. The lower refinance
rate may be partially due to manufactured-home loans' smaller
size, which reduces the potential savings from a lower interest
rate relative to the origination costs of a refinance. \21\
However, the lower refinance rate may be due to factors
mentioned in this response--including market concentration,
conventional lenders' unfamiliarity with the manufactured-
housing market, or a lack of secondary market options for
manufactured-home loans.
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\21\ Ibid.
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Lack of Access to Secondary Markets
A lack of access to secondary markets is often cited as a
downward pressure on the manufactured-housing market. \22\
Fannie Mae and Freddie Mac both curtailed their purchases of
these loans in the 1990s. \23\ Both GSEs are exploring pathways
to supporting manufactured-home markets via their duty-to-serve
processes, and assertive action on their part may improve
borrowers' options.
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\22\ See, for example, Prosperity Now's October 2019 report of its
survey of State housing finance agencies. P. 1.
\23\ Todd, Richard, and Kevin Johnson. ``Race, Location, and
Manufactured-Home Loans on American Indian Reservations''. Federal
Reserve Bank of Minneapolis, December 2018.
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Some avenues to the secondary market exist already for
manufactured-home owners who are able to pursue a mortgage,
such as through Fannie Mae's MH Advantage program.
More generally, Fannie Mae has recently begun signing
memorandums of understanding with tribes to expand access to
the secondary market for some home loans made on trust land.
Thus far, Fannie Mae has signed such memorandums with four
tribes. \24\ The memorandums require tribes to establish
certain ordinances and processes related to housing to protect
lenders and borrowers.
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\24\ ``Native American Homeownership''. Fannie Mae. Accessed on
July 8, 2021.
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If tribes are able to bring Fannie Mae's mortgage products
onto their lands, a door may be opened for more lenders to
serve manufactured-home buyers. Additional resources, like
outreach or technical assistance, could increase the number of
tribes pursuing such agreements.
Tribes and states can also support the manufactured-housing
market by offering clear guidance on how and when manufactured
housing can be treated as real property. For example, in New
Hampshire, lenders can simply create and perfect a security
interest in a manufactured home, thus allowing manufactured-
home owners to receive the same foreclosure protections as
other single-family-home owners. \25\
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\25\ Titling Requirements for Manufactured Homes. Fannie Mae,
2020. Accessed on July 8, 2021.
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Lenders of chattel loans do not currently have a route to
sell their loans on the secondary market. Fannie Mae proposed a
pilot program for chattel loans at one point in the duty-to-
serve planning process, but this pilot was ultimately left
unpursued. The idea is worth exploring again. The GSEs could
consider an Indian Country specific focus for such a pilot, or
expand its scope. In either scenario, the GSEs should be able
to design a pilot that provides significant value to chattel-
loan borrowers who present minimal additional risks relative to
conventional mortgage borrowers.
Loan Denial and Interest Rates
From 2004 to 2016, denial rates for manufactured home loan
applicants in Indian Country have fluctuated between 40 and 75
percent. \26\ They have always been significantly higher than
for site-built home loans, and data suggest these denial rates
are also higher than the rates for manufactured housing outside
of Indian Country. \27\
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\26\ See n. 23.
\27\ See n. 23.
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When borrowers are approved, they pay higher interest
rates. Native Americans in Indian Country are generally more
likely to have high-cost loans, and this is even more true for
those who are borrowing for a manufactured home. \28\
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\28\ See n. 6.
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Policy Solutions
Policymakers interested in affordable housing are
increasingly turning to so-called ``naturally occurring
affordable housing,'' or unsubsidized housing, as an
alternative or supplement to subsidized housing. Manufactured
housing is currently the largest source of unsubsidized housing
in the United States. \29\
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\29\ See n. 9.
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Gains from public investments in manufactured housing will
be limited if consumers are not better served, however. The
costs from higher mortgage interests alone can offset
consumers' gains from manufactured housing's cheaper
construction costs. Those higher interest rates may be driven
by some lenders' outdated or inaccurate perceptions of the risk
involved in manufactured-housing loans--a reality that is also
true of some lenders' general perceptions of Indian Country.
Education for consumers about their financing options--and
for lenders about the value and quality of manufactured
housing--would be valuable. Consumers may be unaware of their
options for refinancing or of the relative value of a mortgage
compared to a chattel loan. Lenders may be unaware of advances
in manufactured-home technology or policylike the fact that HUD
has effectively established quality standards. \30\
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\30\ See n. 10.
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Funding set-asides for manufactured-housing pilots or
projects may send a stronger signal. Indian Country represents
a prime potential location for such a pilot. Half of the
homebuyers on reservations already buy manufactured homes. \31\
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\31\ See n. 10.
Q.3. In Nevada, very few home loans were made with HUD's
Section 184 loan guarantee. The report, ``The Higher Price of
Mortgage Financing for Native Americans'', states that the
Section 184 Indian Home Loan Guarantee Program and other loan
guarantee programs offered by the Housing and Urban Development
(HUD) Office of Native American Programs have been ``largely
ineffective on tribal lands with a few clear exceptions.'' What
factors make the program ineffective and what should we do to
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improve the program's effectiveness?
A.3. Barriers to use of the Section 184 program on tribal lands
are longstanding but subject to improvement. Congress could
improve the titling process, increase lender and tribal
participation in the program, and support organizations that
can act as an intermediary between lenders and borrowers.
Improving the Titling Process
To increase the program's reach onto reservations, the
Federal Government could improve the titling process for trust
land. Our brief, Shortening the TSR timeline: A proposal to end
delays that hinder Native home ownership, \32\ describes seven
considerations for doing so:
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\32\ Colombe, James R., ``Shortening the TSR Timeline: A Proposal
To End Delays That Hinder Native Homeownership'', Federal Reserve Bank
of Minneapolis. September 2020.
Preserve success within the BIA. Expand best
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practices where possible.
Require regular reporting on TSR-processing
timelines.
Bring all BIA offices into compliance with existing
timelines and consider statutory deadlines for title
recording and certified TSRs.
Create an electronic portal for residential
mortgage packages to provide certainty and efficiency
to borrowers and lenders.
Create an interagency report card, with regular
updates, to spur collaboration between tribes and
Federal agencies, build a foundation for
accountability, and help identify solutions to trust
land title issues for residential mortgages.
Remove barriers between tribes and tribal land
records.
Consider a centralized mortgage-processing center.
Increasing Lender and Tribal Participation
Increased lender and tribal participation could also
increase the program's effectiveness. Nationwide, 201 of the
574 federally recognized tribes have taken the steps necessary
to participate in the Section 184 program. \33\ Tribes are
required to pass housing ordinances that define and enforce
lenders' and borrowers' rights in the lending transaction.
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\33\ ``Section 184 Participating Tribes List''. HUD. Accessed June
30, 2021.
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The maximum total loan value Section 184 can guarantee in
recent years has been set at $1 billion. In fiscal year 2018,
lenders guaranteed about $600 million worth of mortgages. \34\
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\34\ ``FY 2020 Congressional Justifications: Indian Housing Loan
Guarantee Fund'' (Section 184). HUD. P. 10-2. Accessed July 13, 2021.
---------------------------------------------------------------------------
About 108 lenders participated in the Section 184 program
in a given year from 2005 through 2015; half of the loans over
that time period were made by just 10 lenders. \35\ Thus, when
a tribe is registered to take part in the Section 184 program,
its members often have few choices for a lender.
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\35\ Listokin, David, Kenneth Temkin, Nancy Pindus, and David
Stanek. ``Mortgage Lending on Tribal Land''. HUD, January 2017. P. 13
and Appendix B-7.
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The relative shallowness of the pool of lenders doesn't
just have implications for today's Indian Country home buyers;
it also highlights a potential vulnerability in the program. If
one of the largest lenders were to exit the market, borrowers
would face an even steeper uphill climb to finance their homes
and thousands of loans may fall through the cracks.
HUD does have one potential option to increase the number
of available lenders: further utilize a ``sponsored entity''
provision that allows HUD 184/184A direct guarantee lenders to
``sponsor'' brokers like Native CDFIs. Additional training and
support are needed by Native CDFIs to more fully participate in
this capacity.
Identifying Borrowers
There were 121 lenders registered to participate in the
Section 184 program in May 2020. \36\ Of these, 75 serve only a
handful of States--or even a single State--and may only be
familiar to certain tribes within those states. \37\ Consumers
elsewhere in the United States, on the other hand, might expect
to have virtual or physical access to the thousands of lenders
willing to underwrite a conventional mortgage.
---------------------------------------------------------------------------
\36\ ``Section 184 Participating Lenders List''. HUD. Accessed
June 30, 2021.
\37\ Ibid.
---------------------------------------------------------------------------
Low participation in Section 184 reflects a general absence
of lenders in Indian Country. Without a physical presence or
longstanding history in communities, banks may have a harder
time identifying qualified and interested borrowers. According
to some banking contacts, this increases the cost of
originating loans.
Intermediary organizations like Native CDFIs may have the
relationships necessary to connect willing lenders with a
potential clientele.
This was demonstrated in a pilot project in HUD's Section
502 lending program. Native CDFIs in South Dakota worked with
the USDA and lenders to greatly increase the number of loans
made through that program on reservations.
------
RESPONSES TO WRITTEN QUESTIONS OF SENATOR LUMMIS
FROM ALENE TCHOURUMOFF
Q.1. I want to start with some questions about how the census
may have inaccurately counted, because it's so difficult, the
number of Native Americans and how many are living in each
household? You know, if you have a Native American household
where there are multiple generations, there are extra workers,
they are trying to keep everybody housed, perhaps in housing
that is smaller than would normally be considered in the United
States adequate for that many people, then some--the census
comes along and maybe they're reluctant to discuss how many
people are living in their household.
So, question number one, is counting--is the census an
issue, and is it contributing to undercounts? . . . And if you
have some thoughts about concrete steps we can take to address
this, I'd love to have you submit them in in writing. \1\
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\1\ Per the hearing transcript.
A.1. Thank you for allowing me the opportunity to elaborate on
the issue of undercounting of American Indians and Alaska
Natives (AIANs) in tribal areas in the American Community
Survey (ACS) and the decennial census. The undercounting of
AIANs in previous censuses is an important concern for tribal
governments and has been widely reported. \1\ For example,
after a post-enumeration survey, the U.S. Census Bureau
determined that the AIAN population living in tribal areas was
undercounted by 4.9 percent in the 2010 Census \3\ (compared to
a 0.9 percent overcount for the same population in the 2000
Census). This undercount can compromise the effective
allocation of Federal funds to tribes, amounting to hundreds of
millions of dollars in lost funds. \4\
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\2\ DeWeaver, Norm. ``American Community Survey Data on the
American Indian/Alaska Native Population: A Look Behind the Numbers''.
National Congress of American Indians (NCAI), February 18, 2013; and
``The American Community Survey: Serious Implications for Indian
Country''. NCAI, October 11, 2010. See also ``Disaggregating American
Indian and Alaska Native Data: A Review of Literature''. NCAI, July
2016.
\3\ ``Census Bureau Releases Estimates of Undercount and Overcount
in the 2010 Census''. U.S. Census Bureau news release, May 22, 2012.
\4\ Reamer, Andrew. ``Counting for Dollars 2020: The Role of the
Decennial Census in the Geographic Distribution of Funds, Report #2''.
George Washington Institute of Public Policy, March 2018. P. 1. We use
these estimates of the cost of the undercount per person per State per
year as a range of the impact of the undercount of the AIAN population
living on reservations.
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The U.S. Census Bureau has already taken proactive steps to
address the undercounting of AIANs in tribal areas, including
through partnerships with tribes and Native organizations.
However, there are additional ways to improve the accuracy of
both the decennial census and the ACS in the future. \5\
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\5\ Starting in 2011, the U.S. Census Bureau made changes to its
enumeration of individuals living in tribal communities. First, the
bureau no longer uses mail, Internet, and phone interviews for all
individuals who have unmailable addresses and exclusively uses in-
person interviews. All locations in remote Alaska, many of which are
located in Alaska Native Villages, are treated as unmailable. The U.S.
Census Bureau has also started to consult with tribal leaders to
further improve the accuracy of population counts in tribal areas. For
more description of these improvements, see the bureau's Handbook for
Consultation With Federally Recognized Tribes.
---------------------------------------------------------------------------
Our chief suggestion pertains to new privacy measures
implemented by the U.S. Census Bureau in the 2020 Census and,
possibly, the ACS in the near future. Research conducted by
Randall Akee, a professor at the University of California, Los
Angeles and research affiliate with CICD, has shown that on
reservations with fewer than 5,000 people--the large majority
of reservations--the bureau's new privacy algorithm will
decrease the measured population by 34 percent. \6\ Relatedly,
use of the most-recent privacy algorithm (Demonstration Project
PLB 12.2) \7\ will cause some smaller tribes to report no
population in the 2020 Census even though their communities are
populated. I recommend that the U.S. Census Bureau allow tribal
governments to determine how to trade off inaccuracy with
privacy considerations when the bureau implements privacy
measures. \8\
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\6\ Gus Wezerek and David Van Riper. ``Changes to the Census Could
Make Small Towns Disappear''. New York Times, February 6, 2020.
\7\ Yvette Roubideaux and Gwynne Evans-Lomayesva. ``What's the
Price of Privacy? 2020 Census Disclosure Avoidance System Impacts on
Tribal Nation Census Data''. NCAI, May 18, 2021.
\8\ This recommendation is consistent with the recommendation by
the NCAI to honor the Government-to-Government relationship between
tribes and the Federal Government when determining the right tradeoff
between privacy and accuracy in the 2020 Census. See the NCAI's
research and policy recommendations website for more details.
---------------------------------------------------------------------------
Another promising approach to addressing the undercount is
to employ more tribal members as enumerators in future data
collection. This helps to overcome issues of trust and allows
the decennial census to reach more American Indians and Alaska
Natives. This suggestion echoes the concern of tribal leaders
and advocates. \9\
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\9\ For example, Carol Evans, chairwoman of the Spokane Tribal
Business Council, recently stated, ``That's why it's important that
we're able to hire people to go out and talk to our tribal members and
explain why it's so important to complete the census. If we're able to
hire our own people, these are people that the tribal members will
trust.''
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------
RESPONSES TO WRITTEN QUESTIONS OF
SENATOR CORTEZ MASTO FROM MICHAEL GOZE
Q.1. Can you elaborate on the role of the Indian CDBG program
to your tribes and its impact on affordable housing and
community development?
A.1. The Ho-Chunk Nation has long utilized the ICDBG grant
program for community development projects to improve our low-
income communities. The greatest utilization of these grants
has been in the improvement and expansion of community
infrastructure. Using the ICDBG the Ho-Chunk Nation and Ho-
Chunk Housing and Community Development Agency, have provided
community water and sewer systems to 8 HCN villages throughout
Wisconsin. Infrastructure and lot development have allowed the
HCN to expand the affordable housing footprint for the Ho-Chunk
Nation and increase economic development opportunities for
tribal members. The Ho-Chunk Nation has also used ICDBG funds
for the development of several community facilities that have
enriched HCN communities. These development projects included
park development, construction of an HCN Law Enforcement
administration building, construction of a daycare facility
providing daycare using the Montessori Method for over 50
children, construction of community centers in four of our HCN
communities, the construction of Head Start schools, and
rehabilitation of a youth learning facility. Finally, HHCDA has
used ICDBG funds to install photovoltaic solar panel systems on
over 150 affordable housing rental units, lowering the monthly
housing expenses for resident families. In conclusion, the
ICDBG program has had an enormous positive impact on our
affordable housing communities, both through the economic
impact of new job creation and through community enhancement.
Q.2. Can you discuss the impact of the additional ICDBG funds
allocated through the CARES Act? What was the impact of those
funds on your tribes?
A.2. The funding impact of the additional ICDBG funds was a
tremendous boost to the Ho-Chunk Nation and Ho-Chunk Nation
Tribal members. The majority of funds used, was in direct
assistance grants to tribal members struggling with rent,
mortgage, and utility payments. HHCDA also used these funds to
procure and distribute a great deal of cleaning supplies and
PPE.
Ho-Chunk Housing and Community Development Agency (HHCDA)
applied for the funds as the TDHE (tribally designated housing
entity) of the Ho-Chunk Nation and received 1,500,000. HHCDA
used these funds to provide assistance to Tribal members in the
following areas.
Providing Rental Assistance, HHCDA began providing
rental assistance to both low and high income families
that reported having difficulty paying rent due to the
COVID-19 crisis.
Providing Mortgage Assistance, HHCDA began
providing rental assistance to both high and low income
families to reported difficulty paying rent due to the
COVID-19 crisis.
Utility Grants of $350, to Ho-Chunk Nation Elders
that are income eligible.
Purchase of PPE to be distributed to Ho-Chunk
Tribal members, with the purpose of protecting
themselves and their families for the current COVID-19
Crisis. Gloves, face shields, masks, and protective
gowns.
To date, HHCDA has been able to financially assist over 830
households with rental, mortgage or utility assistance and we
were able to distribute cleaning supplies and PPE to over 700
households. Currently HHCDA is still processing assistance
applications with this funding.
------
RESPONSES TO WRITTEN QUESTIONS OF
SENATOR CORTEZ MASTO FROM ERIC SHEPHERD
Q.1. Do you think the Nation's 11 Federal Home Loan Banks
invest appropriately with the Nation's Native American tribes?
Do you think a set-aside for Native American communities is
necessary for tribes to gain investments from the Federal Home
Loan Banks?
A.1. Response not received in time for publication.
Q.2. Can you elaborate on the role of the Indian CDBG program
to your tribes and its impact on affordable housing and
community development?
A.2. Response not received in time for publication.
Q.3. Can you discuss the impact of the additional ICDBG funds
allocated through the CARES Act? What was the impact of those
funds on your tribes?
A.3. Response not received in time for publication.