Developing Infrastructure lacking for Indian Housing

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Developing infrastructure is the top constraint in developing new Indian housing.

Infrastructure Biggest Challenge to New Indian Housing

Availability of labor and lack of funds followed in latest survey on Indian housing

You would think that lack of funds would be what most tribes would say is the biggest barrier to building homes on their reservations. But funding only comes in third, according to a new study of Indian housing in Indian country.

Respondents to a survey administered for the federal Department of Housing and Urban Development’s “Housing Needs of American Indians and Alaska Natives in Tribal Areas” listed developing infrastructure as the top constraint in developing new Indian housing.

Second on the list of replies was availability of labor, and lack of funds was third. Lesser barriers included land issues, flooding and aging existing infrastructure.

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HUD commissioned the study (done by the Urban Institute) to roughly coincide with the 20th anniversary of the Native American Housing Assistance and Self Determination Act, a landmark bill that gave tribes much more power in deciding when and how to develop new Indian housing (as well as maintain existing stock).

“Almost all respondents to the tribal/tribally designated housing entity survey indicated that development costs had increased during the past three years, with 40 percent saying costs had increased greatly and 57 percent saying costs had increased somewhat,” according to the survey, from the first major study HUD has done since NAHASDA was passed in 1996.

In addition, 35 percent of respondents said development cost was a “very serious” constraint on developing new Indian housing, with another 15 percent indicating it was a “fairly serious” constraint.

Infrastructure is a serious problem because often there is a complete lack of water, sewer and electrical facilities near the sites of new Indian housing. In addition, there may be more than one federal agency involved, which can slow things down (the Bureau of Indian Affairs often builds the roads at the developments, for instance).

One thing NAHASDA instituted was project lending under Title VI of NAHASDA. These loans are 95 percent guaranteed by the federal government and can be used for infrastructure costs. While several hundred million dollars’ worth of Title VI loans have been made, this has just scratched the surface of Indian housing need.

Labor problems have occurred because of a lack of skilled tribal workers due to few construction projects on Indian land. “This scarcity of work results in the need for workers with the necessary skills to travel outside the tribal area for work and then not be available when needed in the tribal area,” the report said. It also drives up costs when skilled workers have to be brought in, sometimes from great distances.

One possibility is to use construction workers employed by the TDHEs through what is called a “force account” for repair work and try to develop them into a skilled home building team.

And while lack of funds wasn’t the top answer, it remains a formidable obstacle. The federal government now allocates housing funding to the tribes in NAHASDA block grants, determined by a federal formula. The report notes that while funding has been fairly consistent over the past two decades (at about $650 million per year), inflation has cut the buying power of that money by as much as a third.

As for land, the report notes “land assembly and acquisition remain as frequent problems that add to the cost of development. The main source of this challenge is fractionated land, which is the result of allotments that have been divided among heirs through probate.

“Having many owners makes it hard to assemble large enough parcels for development. To solve this problem, a few tribes have initiated efforts to buy back fractionated land or land adjacent to tribal lands. Other sites try to ensure that the housing agency owns its own land.”

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Infrastructure Biggest Challenge to New Indian Housing

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