[Senate Hearing 112-753]
[From the U.S. Government Publishing Office]






                                                        S. Hrg. 112-753


                 HOUSING PARTNERSHIPS IN INDIAN COUNTRY

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                                   ON

EXAMINING WAYS TO ADDRESS THE HOUSING CRISIS IN INDIAN COUNTRY, AND HOW 
  TRIBES ARE LEVERAGING THEIR PROGRAMS WITH OTHER FEDERAL AND PRIVATE 
 RESOURCES TO EFFECTIVELY CREATE MORE HOUSING OPPORTUNITIES IN INDIAN 
                                COUNTRY

                               __________

                             JULY 24, 2012

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs





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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  TIM JOHNSON, South Dakota, Chairman

JACK REED, Rhode Island              RICHARD C. SHELBY, Alabama
CHARLES E. SCHUMER, New York         MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
DANIEL K. AKAKA, Hawaii              JIM DeMINT, South Carolina
SHERROD BROWN, Ohio                  DAVID VITTER, Louisiana
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
HERB KOHL, Wisconsin                 PATRICK J. TOOMEY, Pennsylvania
MARK R. WARNER, Virginia             MARK KIRK, Illinois
JEFF MERKLEY, Oregon                 JERRY MORAN, Kansas
MICHAEL F. BENNET, Colorado          ROGER F. WICKER, Mississippi
KAY HAGAN, North Carolina

                     Dwight Fettig, Staff Director

              William D. Duhnke, Republican Staff Director

                       Charles Yi, Chief Counsel

                     Laura Swanson, Policy Director

                 Beth Cooper, Professional Staff Member

                 Adam Healy, Professional Staff Member

              Erin Barry Fuhrer, Professional Staff Member

                       Dawn Ratliff, Chief Clerk

                     Riker Vermilye, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                  (ii)


                            C O N T E N T S

                              ----------                              

                         TUESDAY, JULY 24, 2012

                                                                   Page

Opening statement of Chairman Johnson............................     1

Opening statements, comments, or prepared statements of:
    Senator Akaka................................................     2

                               WITNESSES

Cheryl A. Causley, Executive Director, Bay Mills Housing 
  Authority, on behalf of the National American Indian Housing 
  Council........................................................     3
    Prepared statement...........................................    18
David W. Bland, Chairman, Travois, Inc...........................     5
    Prepared statement...........................................    23

              Additional Material Supplied for the Record

Prepared statement of Chancey C. Kittson, Executive Director, 
  Blackfeet Housing..............................................    26

                                 (iii)

 
                 HOUSING PARTNERSHIPS IN INDIAN COUNTRY

                              ----------                              


                         TUESDAY, JULY 24, 2012

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:05 a.m. in room SD-538, Dirksen 
Senate Office Building, Hon. Tim Johnson, Chairman of the 
Committee, presiding.

           OPENING STATEMENT OF CHAIRMAN TIM JOHNSON

    Chairman Johnson. Good morning. I call this hearing to 
order.
    Today the Committee will continue examining ways to address 
the housing crisis in Indian Country. In my home State of South 
Dakota and on reservations across the country, the lack of 
safe, stable, high-quality housing is a constant worry for many 
families. As I stated at our last hearing on this issue, 
families in Indian Country face tremendous challenges. Native 
Americans are almost twice as likely to live in poverty as the 
rest of the population and nearly three times as likely to live 
in overcrowded conditions. This is unacceptable, and we must 
continue working together to address this inequity.
    Today's hearing follows the hearing I held earlier this 
year that focused on how HUD, USDA, BIA, and IHS coordinate 
efforts and programs to help tribes meet their critical housing 
needs. I am pleased to see the White House is conducting a 
similar meeting this week with tribal leaders and agencies in 
order to continue efforts to make sure Federal programs are 
working as efficiently as possible. It is important that all 
Federal agencies engage with tribes in ongoing government-to-
government consultation to fulfill our treaty and trust 
responsibilities. I am also pleased that HUD Assistant 
Secretary for Public and Indian Housing Sandra Henriquez will 
be attending the grand opening of the new Oglala Lakota Housing 
Authority office on Pine Ridge with me next month.
    We have also recently made progress in other areas. Just 
last week, the Senate unanimously passed the Helping Expedite 
and Advance Responsible Tribal Homeownership, or HEARTH Act, 
sending it to the President for his signature. I was an 
original cosponsor of this important legislation to make it 
easier for tribes to lease their lands for housing, economic 
development, and other activities without having to work 
through the slow BIA process for each individual surface land 
lease. For too long, I have heard stories from tribal leaders 
about ongoing BIA delays in approving leases, which made 
economic development and building housing slow and difficult.
    In addition, the Native American Housing Assistance and 
Self-Determination Act of 1996 is the foundation for addressing 
the critical housing needs in Indian Country. NAHASDA is due 
for reauthorization next year, and I look forward to engaging 
tribes on any improvements that may be necessary.
    Unfortunately, because Federal resources do not come close 
to meeting the immense demand for housing assistance in Indian 
Country, tribes must also be creative in leveraging resources. 
I have called this hearing to learn more about what kinds of 
partnerships tribes have built, how these partnerships leverage 
Federal resources, and what obstacles tribes may face in 
leveraging their funds and entering into partnerships.
    I have invited all of you to testify here today because of 
the important work you do in helping address the housing 
challenges in Indian Country. Waiting lists for housing 
assistance are long, many Federal programs are complicated to 
use, and it takes a lot of planning and coordination to be able 
to leverage scarce Federal resources. Despite these enormous 
challenges, I am constantly impressed by the dedication and 
commitment tribal housing authority directors and their staffs 
put into housing projects on their reservations.
    Senator Akaka, do you wish to make a brief opening 
statement?

              STATEMENT OF SENATOR DANIEL K. AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman, for 
holding this hearing. As the Chairman of the Committee on 
Indian Affairs, I am pleased that this Committee is taking a 
serious look at the housing needs of Native communities and the 
partnerships that help to meet them.
    The United States has a unique trust responsibility to 
recognize Native peoples, and Congress has a duty to ensure 
that the trust responsibility is upheld and the goal of self-
sufficiency is advanced consistently. I look forward to the 
testimony today. Tribes and Native housing providers such as 
tribally designated housing entities and the Department of 
Hawaiian Home Lands have much to share in the way of successful 
strategies being implemented throughout the Nation.
    The Hawaiian Homes Commission Act is a Federal land trust 
established to return Native Hawaiians to the land to promote 
self-sufficiency as a condition of statehood. It is 
administered by the State of Hawaii Department of Hawaiian Home 
Lands, or we call it DHHL. DHHL has successfully partnered with 
the private sector to increase access to affordable housing on 
Hawaiian home lands and implement strategies that raise the 
discretionary income of Native Hawaiian families. I would like 
to highlight some of the innovative things they are doing 
through some of their partnerships.
    DHHL has partnered to create more self-help housing 
opportunities for low-income families, something that is 
vitally important to moving people from the wait list of 26,000 
to the land and to homeownership. DHHL also created the Home 
Ownership Assistance Program, or HOAP, to connect Native 
Hawaiians with home buyer education and financial literacy 
counselors who can assist them in credit repair and becoming 
mortgage ready.
    DHHL has partnered with local nonprofits and even the 
electric company to encourage the use of solar panels in homes, 
resulting in lower energy costs for homeowners.
    These savings certainly help families have the resources 
necessary to stay in their homes.
    I want to thank our panelists very much for being here 
today and for your testimonies to the Committee today.
    Mr. Chairman, I thank you for allowing me to share a little 
time with the successful partnerships happening in our trust 
lands in Hawaii. Thank you very much, Mr. Chairman.
    Chairman Johnson. Thank you, Senator Akaka.
    I just want to remind my colleagues that the record will be 
open for the next 7 days for opening statements and any other 
materials you would like to submit. Now I will briefly 
introduce our witnesses.
    Cheryl Causley is Executive Director of the Bay Mills 
Housing Authority in Michigan and is testifying as the Chair of 
the National American Indian Housing Council.
    David Bland is the Founder and Chairman of Travois, a 
consulting firm that works with American Indian tribes to use a 
variety of tools to develop low-income housing.
    Unfortunately, due to unexpected circumstances, Mr. Kittson 
and Mr. Kirk were unable to make it to today's hearing.
    We welcome Ms. Causley and Mr. Bland here today and look 
forward to their testimony about this important issue. Ms. 
Causley, you may proceed.

 STATEMENT OF CHERYL A. CAUSLEY, EXECUTIVE DIRECTOR, BAY MILLS 
 HOUSING AUTHORITY, ON BEHALF OF THE NATIONAL AMERICAN INDIAN 
                        HOUSING COUNCIL

    Ms. Causley. Thank you. Good morning, Chairman Johnson, 
Senator Akaka, and distinguished Members of the Senate 
Committee on Banking, Housing, and Urban Affairs. I would like 
to thank you for holding this hearing to discuss partnerships 
to provide affordable housing in Indian Country. My name is 
Cheryl Causley. I am an enrolled member and director of housing 
for the Bay Mills Tribe of Chippewa Indians. I appear before 
you today in my capacity as Chairwoman of the National American 
Indian Housing Council.
    Founded in 1974, NAIHC's primary mission is to support 
tribal housing entities in their efforts to provide safe, 
decent, affordable, and culturally appropriate housing for 
Native people.
    When NAHASDA was enacted, it was envisioned that tribes 
could leverage their HUD funds with additional funding sources. 
We often discuss our challenges in providing housing, but today 
we are grateful to highlight our innovation and partnerships.
    Last month, I had the honor to attend a special open house 
celebrating the Marcel Peacock family who became proud 
homeowners because of the efforts of the Winnebago Tribe in 
Nebraska and its partners. They created a successful 
homeownership program. The photo here is a picture of Marcel 
Peacock and Clarissa Hoffman in front of their newly 
constructed three-bedroom home. Marcel and his family of five 
had been renting for 4 years and finally became homeowners in 
April of 2012.
    On the day of the open house, I spoke with many people 
involved in this project. I learned from Tribal Chairman John 
Black Hawk that the tribe itself put forth $1 million to 
provide 20 families with $50,000 in downpayment assistance.
    The tribal housing organization offered family 
homeownership education and credit counseling. Also, the 
tribe's own construction company gave families discounted rates 
to further reduce the cost of the home.
    Representatives from USDA also shared that they granted 
$60,000 through the Rural Housing Direct Loan Program while 
HUD's Rural Housing and Economic Development Program provided 
further funding.
    The Winnebago project highlights how tribal, Federal, 
public, and private partners all came together to put a Native 
family into a newly built home. The tribe took a strong 
approach to providing housing when there were almost no 
homeownership opportunities. The project helped generate local 
business and employment, established relationships with tribal 
and Federal agencies, and most of all, it helped inspire other 
Winnebago families to pursue homeownership.
    In another part of Indian Country, a nonprofit organization 
called the Yukon-Koyukuk Elder Assisted Living Consortium 
developed an Elder Assisted Living Facility in Galena, Alaska. 
Completed in 2011, the $7.8 million facility was created by 
five federally recognized Alaska Native tribes. Through this 
development, the elders from these tribes can remain close to 
their families, friends, and culture while they receive top-
quality housing and health care. Utilizing new market tax 
credits financing, it will also allow the facility to purchase 
medical supplies, provide working capital to fund operations, 
install solar panels and wood-based heating systems--energy 
efficiency measures that are critically important in a remote 
region with high energy costs.
    Tribal housing program throughout Indian Country are 
encouraged to leverage their NAHASDA funding and to secure 
additional funding sources, such as tax credits, to combine 
multiple funding streams from various agencies. However, even 
basic compliance requirements vary from program to program, and 
overall this burdensome process of using mixed funding is 
administratively inefficient. At times, this limits the tribes' 
ability to access multiple programs when trying to build one 
significant project.
    A solution is for the Federal Government to launch a 
concerted effort to align program criteria for Federal housing 
programs. We need the core Federal agencies such as HUD, USDA, 
BIA, and IHS to have a uniform process for like-minded 
programs.
    These agencies should also create agreements that will 
allow the tribe to complete a single appraisal or environmental 
review instead of requiring multiple assessments to meet 
varying program standards. NAIHC often hears that certain 
Federal programs that are administered by State are not 
providing equal access, like tax credits and some USDA 
programs.
    Thank you all for organizing this hearing and providing 
NAIHC an opportunity to highlight solutions that help meet the 
overwhelming housing needs in tribal communities. Your 
continued support is truly, truly appreciated,.
    I would be happy to try and answer any of your questions. 
Thank you very much.
    Chairman Johnson. Thank you, Ms. Causley.
    Mr. Bland, please proceed.

      STATEMENT OF DAVID W. BLAND, CHAIRMAN, TRAVOIS, INC.

    Mr. Bland. Good morning, Chairman Johnson, Senator Akaka. 
It is an honor to appear before you today. Thank you for 
drawing attention to the ways private and public partnerships 
improve housing in Indian Country. My name is David Bland, and 
I am the founder and chairman of Travois, a financial 
consulting firm that assists American Indians, Alaska Natives, 
and Native Hawaiians with affordable housing and economic 
development.
    While we still have a long way to go before all indigenous 
people in the United States have safe, decent and affordable 
housing, I believe we have made significant strides in 
improving housing conditions since 1996. Thanks to your 
efforts, Chairman Johnson, and the passage of the Native 
American Housing Assistance and Self-Determination Act, and now 
with the passage of the HEARTH Act, tribes and tribally 
designated housing entities have begun to leverage this 
funding, seeing ever more private capital coming to the 
reservations, specifically through the use of the low-income 
housing tax credit program.
    Since 1995, our company has helped to secure more than $450 
million in private equity for Indian Country through 158 
separate partnerships, resulting in more than 4,200 units worth 
more than $627 million. Unfortunately, this is a tiny portion 
of how much housing is needed, but we are proud of what the 
tribes and Travois have been able to do together.
    This success would not have been possible without the 
perseverance of countless tribal housing authority executive 
directors such as Ms. Causley, their housing board members, 
councils and dedicated staff, who work very hard to educate 
Federal funding agencies, State allocating agencies, and 
investors on the unique nature of tax credit transactions in 
Indian Country. This process has been slow and at times very 
difficult.
    When I started Travois in 1995, 9 years after the 
establishment of the low-income housing tax credit program, 
only a single tribal project had utilized the tax credit 
program. I knew that the housing tax credit program generated 
90 percent of all affordable housing nationwide, and I could 
not understand why this program had not been put to better use 
in Indian Country. Through my research, I discovered several 
barriers to success, many of which we have overcome, but some 
of these challenges remain today.
    We have developed several ways to work around these initial 
challenges. First, we structure all of our housing projects 
with soft debt in which an investor typically provides 80 
percent of the total project cost with an equity investment and 
the TDHE provides about 20 percent as debt, typically through 
the NAHASDA program. This allows TDHEs to charge very low 
rents, in line with what their tribal members can afford--and 
means the project has essentially no foreclosure risk.
    Second, many investors were initially reluctant to work in 
Indian Country based on a mostly erroneous understanding of 
tribal law. We have worked to devise an alternative dispute 
resolution mechanism acceptable to both tribes and investors, 
usually including a limited waiver of sovereign immunity solely 
for the project and dispute resolution enforcement in tribal 
court rather than State court.
    Third, and perhaps most vexing, many State allocating 
agencies, the agencies that control the distribution of tax 
credits, simply misunderstood Indian Housing programs and were 
reluctant to award housing tax credits for tribal projects. We 
worked very hard to develop relationships with the States and 
demonstrate the overwhelming need for affordable housing in 
Indian Country, and now many States include preferential points 
for tribal developments. Notably, Arizona has a tribal set-
aside guaranteeing at least two tribal projects will be funded 
every year. We have come a long way since that first project, 
and thousands of affordable housing units have been built or 
rehabilitated thanks to the tax credit program.
    Unfortunately, several challenges remain. We can divide 
these challenges broadly into two categories: a growing 
emphasis on urban areas by a variety of funding programs and a 
lack of investment interest by the majority of players in the 
housing tax credit market.
    First, we have seen State allocating agencies decrease 
scoring opportunities for rural housing and increase 
opportunities for projects in urban areas more likely to be 
considered job centers. Given how the country is still 
struggling to jump-start the economy, the goal seems to make 
sense at first glance, but in our opinion, it indicates a lack 
of understanding of the truly desperate need and state of 
housing on Indian reservations.
    A case in point: In the last year, many States have changed 
their qualified allocation plans to give preferential scoring 
for projects that are in-fill developments; located near 
transit stops, libraries, grocery stores, and the like; or near 
large employers. This, combined with a reduction in 
preservation and rural housing set-asides, results in the near 
elimination of tribal projects from tax credit competition. We 
are very concerned that this lack of consultation with tribal 
leaders and a disregard for the neediest populations will set 
Indian Country back yet again and reverse the positive trends 
we have seen recently.
    Second, investor interest in Indian Country, while growing 
substantially, has always lagged behind interest in other areas 
of the country. We have had great success finding investors for 
our New Markets Tax Credit-funded projects, but housing tax 
credit projects depend on a limited number of investors with a 
small appetite. We believe much of this stems from a reluctance 
of big banks to invest outside of their Community Reinvestment 
Act footprint. While this CRA-created market distortion is a 
problem for all of rural America and results in lower equity 
pricing for their projects, it is a particular problem for 
Indian Country given that many reservations are a many-hours' 
drive from the nearest bank. Indian Country is largely 
unbanked, and as a result too few commercial banks see Indian 
Country as a desirable CRA investment opportunity.
    Some modest changes to the way the CRA is administered 
could result in millions more in investments for Indian 
Country.
    Finally, despite the challenges that we still face, the 
housing tax credit program is incredibly valuable to Indian 
Country. Every year the tax credit industry announces the 
Charles Edson Award for Excellence in Affordable Housing. For 
the first time ever, a housing project in Indian Country was 
named the top rural housing project in the United States. That 
was with the Colville Reservation housing project on Buttercup 
Lane in Washington State. This project is intended for eventual 
tenant ownership, so this project, while providing affordable 
family housing, will also create homeowners. This is a shining 
example of what can be done through public-private 
partnerships, and we are thrilled to have played a part in its 
development.
    Mr. Chairman, we have submitted to the Committee a written 
statement that goes into far more detail on some of these 
issues. And while this concludes my prepared statement, I am 
happy to answer any questions you may have. Thank you very 
much.
    Chairman Johnson. Thank you both for your testimony.
    We will now begin asking questions of our witnesses. Will 
the clerk please put 5 minutes on the clock for each Member for 
their questions?
    I am hopeful that the recent passage of the HEARTH Act will 
help tribes more quickly approve trust land leases. Ms. 
Causley, how have BIA delays in improving trust land leases 
negatively impacted housing construction and economic 
development in Indian Country?
    Ms. Causley. The delays to process the lease ran a gamut, 
depending on where you were located at. In my area, the BIA 
office actually was very, very good. Small tribes. That was one 
of the reasons. You know, not too big of a service area, so 2 
months. But it went as far as 2 and 3 years in some places. I 
believe it was the Navajo tribe, for instance, had a Wal-Mart 
that actually wanted to come in and build in their area. Well, 
it took so many years to get that approval through that they 
lost interest.
    As a homeowner that tried to get my first mortgage, you 
know, even with a couple of months, you should have seen what 
it did to my bank rate.
    So in a fluctuating market, should one of your tenants 
actually go out and then they hear, well, I am sorry, they do 
not have anything this month, they do not have anything this 
month, and when it lags out for all of those months, it is 
devastating.
    Chairman Johnson. Mr. Bland, you have been working for many 
years to build partnerships between tribes and investors to 
develop affordable housing, leveraging Federal and other 
resources. What assurances do investors need before they will 
provide capital for economic development or housing projects in 
Indian Country?
    Mr. Bland. Thank you, Mr. Chairman. The investors require a 
gamut of guarantees. In the last 15 years or so, we have worked 
to equalize the guarantees that they require in the private 
market outside of Indian Country with what they will accept in 
Indian Country. For example, on a typical non-Indian Country 
housing project, a project will receive title insurance. On a 
project done on trust land, it is next to impossible to receive 
a title insurance policy. And so in lieu of that, we have 
succeeded in getting tribes to provide title guarantees 
backstopped by the tribe itself, and investors have agreed that 
that is acceptable.
    The other guarantees are performance-related guarantees 
that mirror what private investors would require outside, and 
this is one of the areas where we feel that we have made great 
strides that the investors who now are willing to invest in 
Indian Country are willing to accept a similar set of financial 
guarantees. They do not expect personal financial guarantees, 
of course, as they would outside of Indian Country. So we think 
that is an area of great success.
    I might just add on, if I can, Mr. Chairman, to what Ms. 
Causley said with respect to the BIA and the acceptance of the 
title work, the title status reports, certified title status 
reports and so forth. We had a tragic set of circumstances back 
12 years ago--excuse me, 8 years ago with the Navajo 
reservation where they had $16 million worth of equity 
committed to the projects for three separate projects, and 
because of the delay in receiving the title status reports and 
the lease approvals from the BIA, those projects went away. All 
$16 million was rescinded. It was just absolutely tragic.
    Chairman Johnson. I often hear positive comments about 
NAHASDA from tribal leaders because of its flexibility and the 
leverage opportunities available. I would like to hear from 
both of you about how we can ensure these funds are leveraged 
with other Federal and private funds in order to provide the 
most housing assistance possible. Are there statutory 
impediments that make leveraging funds or agency collaboration 
more difficult?
    Ms. Causley, let us begin with you.
    Ms. Causley. As I spoke about in my testimony earlier, 
depending on which agency we seek to get funding from, the 
application process is different. The environmental review 
process is the one that really, really ticks our--makes it 
difficult. Let us just put it that way. If we could have the 
three or four agencies get together and work and have one set 
environmental review process, it would make it so much easier 
to take our like-minded programs, and we know all this stuff 
that is unnecessary. And I really believe that there should be 
a tribal advisory board and ask the tribes what the impediments 
are and have them work with these agencies. Our tribal leaders 
determine where they want to spend their money. When it comes 
down to IHS restrictions, they should be able to decide what 
they want done with their own funds, that sovereignty, and they 
should be questioned as to what impediments they are coming 
across.
    So I actually think that would solve a lot of problems, 
some tri-party agreements between our agencies and an advisory 
group, sir.
    Chairman Johnson. Very good.
    Mr. Bland?
    Mr. Bland. Mr. Chairman, in our experience we have found 
that NAHASDA is actually quite flexible. It is probably the 
most flexible program that we have ever dealt with, with 
respect to leveraging private equity with the tribes.
    On the New Markets Tax Credit side, however, the USDA has a 
variety of funding programs and the Education Department has a 
variety of funding programs for tribal colleges, for example, 
and they have restrictions where you cannot use the USDA 
grants, for example, as leveraged debt in a New Markets 
transaction. And you want to do that because that boosts the 
amount of equity that you can get from an investor.
    We have requested from the USDA a simple letter of 
explanation. We do not believe that there is anything that 
prohibits the utilization of a USDA grant, for example, as 
leveraged debt in a New Markets transaction. But there is 
nothing that explicitly allows it, and as a result, attorneys 
who write the tax opinions for New Markets transactions simply 
will not--they will not sign off on a transaction like that. So 
that is a simple area where a USDA grant, no additional funds 
from the Federal Government, but their simple categorization as 
leveraged debt would then, in fact, leverage additional private 
equity.
    On the housing side, Cheryl is correct. The diversity of 
compliance requirements is an incredible headache for our 
tribal partners. On the one hand, the environmental assessment 
that is required by HUD or other Federal agencies is typically 
very concerned with the effect that human beings are going to 
have on the landscape, on wildlife, and so forth; whereas, the 
so-called Phase 1 environmental assessment that private 
developers seek is the exact opposite. What impact is the land 
going to have on human beings? Are there toxic substances, 
underground petroleum distillates that are leaking into the 
ground and the groundwater? And these two do not match, and so 
you have to have two separate environmentals done with 
completely different divergent concerns. If we could have 
regulations that matched, that would be very, very helpful.
    Chairman Johnson. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Ms. Causley, Director Causley, and Chairman Bland, thank 
you very much for your expertise and what you have been doing 
for the Native people of this country.
    Ms. Causley, the National American Indian Housing Council's 
membership includes all three recognized Native groups: 
American Indians, Alaska Natives, and Native Hawaiians. Can you 
tell the Committee how important reauthorizing Title VIII, the 
Native Hawaiian provision of NAHASDA, is to your membership and 
to the Native Hawaiian community's ability to ensure adequate 
housing is available?
    Ms. Causley. The reauthorization of that act and NAHASDA is 
extremely important to all of our membership. As for the 
Hawaiians, if that is not reauthorized, they are going--they 
will not have housing, basically. It is of vital importance to 
the Hawaiians.
    Senator Akaka. Well, you cannot make it any more clear than 
that. Thank you very much.
    Ms. Causley, can you describe the effect that stagnant 
funding levels under NAHASDA are having on the ability to 
create sufficient housing solutions in Native communities?
    Ms. Causley. Since 1996, not only stagnant, it does not 
even--we are not even funded to a level that will take in mind 
inflation. So we are going backwards.
    We right now are struggling just to take care of our 
existing stock, not even looking at our increased tribal 
membership. You come into my area, and it is like 60 percent of 
the membership are under the age of 20. How am I going to find 
houses for them when I do not have enough money to take care of 
what I have?
    It is a wonderful, wonderful program, but we need to have 
the money to let us make it successful. And also we are 
fighting right now where in my instance I am putting like five 
houses out a year. That is all I can afford. That is making a 
small dent, but there is no provision within NAHASDA right now 
to maintain that house.
    So, unfortunately, those are some of the things that we 
have to--definitely we have to deal with inflation, and we have 
to deal with the new houses built with NAHASDA funds to find 
enough funding to at least maintain those, because it would be 
a tremendous disservice to not maintain what you knew we built.
    Mr. Bland. Senator, may I comment on that as well?
    Senator Akaka. Yes, Mr. Bland?
    Mr. Bland. One of the provisions that I have always felt is 
extremely odd with NAHASDA is that as you convey your mutual 
help units, they are lost to your current assisted stock, and 
the tribes lose money. Yet they are compelled, both ethically 
and legislatively, to convey their mutual help units.
    But as Cheryl said, if you use your money, you are a good 
steward of the NAHASDA allocation and you build new units, 
whether you have done it with the tax credit program or simply 
with the dollar-for-dollar use of NAHASDA funds, you cannot add 
that to your stock, so a tribe is faced unilaterally with 
always seeing a decline in their NAHASDA allocation 
statutorily. To me, it seems to make no sense whatsoever that a 
tribe is penalized for doing what it needs to do, which is to 
convey the mutual help units, build new units, and then not 
have an allocation sufficient to maintain those units. To me, 
it is an anomaly that I have never understood.
    Senator Akaka. Thank you.
    Chairman Bland, do you have any specific recommendations 
that would encourage more private sector partnerships with 
public sector agencies like tribes and housing authorities to 
meet the housing needs of American Indians, Alaska Natives, and 
Native Hawaiians?
    Mr. Bland. Yes, sir, I do. In particular with Native 
Hawaiians, there is a rule colloquially known as the ``general 
public use rule,'' where under the low-income housing tax 
credit program a unit must be available to the general public. 
And as a result, when Native Hawaiian trust lands--my 
understanding is that only Native Hawaiians can occupy that, 
and that is in violation of the general public use rule, and as 
a result they cannot access the low-income housing tax credit 
program.
    I think a simple waiver of that general public use rule for 
Native Hawaiian trust lands would make a huge difference in 
opening up millions of dollars of tax credit-financed equity, 
private equity, to Native Hawaiians.
    On Indian Country in general, a simple--to me a simple 
solution, although it is nothing simple, and we have tried for 
years to talk to the banking regulators, particularly the 
Office of the Comptroller of the Currency. The Community 
Reinvestment Act is a wonderful law that has encouraged a great 
deal of investment nationally, but it also has an effect of 
distorting much of the marketplace where banks that wish to 
invest and get CRA credit on their examinations seek out those 
areas that they deem the regulators will give them more credit 
for. If they have more bank branches on an Indian reservation--
excuse me, outside of an Indian reservation, they will get more 
CRA credit in their examination for investing in that area.
    We have recommended that if banks could get equal credit 
for investing in an underserved, unbanked area, as they would 
if they invest in their own primary assessment area, then that 
would funnel millions of dollars of commercial bank investments 
into Indian reservations and Native Hawaiian homelands. It is 
analogous to what happened with the Gulf Opportunity Zone where 
banks were afforded that kind of CRA examination credit 
immediately, without respect to what they were doing in their 
primary assessment area. And if we could have that for Indian 
Country with an acknowledgment, an understanding that there is 
a true crisis, an absolute crisis, as Senator Johnson, you, 
Senator Akaka, and Senator Tester all know in Indian Country 
that there is an absolute crisis of affordable housing on 
Indian reservations.
    Senator Akaka. Thank you very much.
    Mr. Chairman, I have a few questions that I will ask in a 
second round.
    Chairman Johnson. We will proceed with a second round if 
time allows.
    Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. I want to thank 
both the panelists for being here today. I have just a couple 
questions.
    I look at this from Montana's perspective with our tribes, 
and I do not know that it is affordable housing. I think it is 
housing, period. There are a lot of challenges out there. Let 
us just put it that way.
    I guess I would start out by saying a lot of times banks 
will not loan in Indian Country because it is trust land, and 
that--in order to be able to have secure loans, there needs to 
be some land ownership there on the trust land. That is my 
perspective. I want to get your perspective on that. How big of 
a deterrent is trust land versus privately owned land to 
building a house in Indian Country a deterrent for banks to 
loan, or is it? Either one of you go ahead.
    Mr. Bland. Senator, yes, I agree completely. It is not 
just--I misspoke. It is not just a crisis in affordable 
housing. It is a crisis in housing.
    It goes beyond, I believe, Senator, the issue of trust 
ground. When I was with the Federal Reserve Bank in 
Minneapolis, I remember distinctly, I remember like it was 
yesterday, meeting with a banker--and, unfortunately, it was a 
banker from South Dakota, Senator Johnson--who said to me that 
he could not make a loan to an Indian because they would not 
like him in the eye; and when he shook his hand, he gave him a 
soft handshake. That was to me appalling, and I have heard that 
several times.
    I have heard one particular anecdote so many times that it 
has become a rural myth where in this case another banker said 
to me that they could not make a loan on an Indian reservation 
because they knew a story of a man who took a chain saw and cut 
a hole in the bathroom wall of his house so that his horse 
could stick his head through and drink out of the tub. Now, I 
have heard about that about the Red Lake Reservation in 
Minnesota where horses are not exactly a common occurrence. I 
have heard it about Pine Ridge. I have heard it about Navajo. 
And I have never seen it happen.
    But those are the kinds of attitudes that too many small--
typically, small bankers have, and these personal impediments 
to lending.
    Trust land is an issue, but there are programs--the 184 
program that provides a guarantee on trust ground. There are 
ways that banks can make loans on trust ground. I believe it is 
the personal impediments that are the hardest thing to 
overcome, Senator.
    Senator Tester. OK. That is a good point.
    Did you have anything you wanted to add to that, Cheryl?
    Ms. Causley. The use of such things as the 184 loan 
actually takes work on the bank's part. The problem is there 
are not too many bankers that are actually even aware of how to 
go do a 184 on trust land.
    Senator Tester. OK.
    Ms. Causley. It is a huge impediment.
    Senator Tester. OK. If you were going to name your top 
three things that you would do if you were sitting in this 
chair here to help encourage more housing in Indian Country, 
what would they be? If you were in Senator Akaka's or Senator 
Johnson's or my chair, what would you be advocating for to get 
more housing built in Indian Country?
    Ms. Causley. More money, more training for our tribes.
    Senator Tester. In what way? What kind of training?
    Ms. Causley. They need technical assistance. We do a 
wonderful job in NAIHC, but every time that there is a new 
program or there is a new opportunity, someone has to teach 
them that so they have the capacity, you know.
    Senator Tester. So training as far as the programs that are 
available from the Federal----
    Ms. Causley. Capacity building for the tribes, because you 
also have to have court systems in place. The tribes need to 
have certain things also to make them successful, and less 
restriction, tri-party agreements basically within those four 
major agencies that we are working with, and set-asides, State 
set-asides. I do not know how many of them they will not--you 
know what rural development is like in Montana, but they are 
wonderful in Michigan. I mean, we use them--but I actually had 
to take the gentleman from
    Washington, D.C., bring him to Michigan and say, ``Hey, 
guys, this is your boss.'' You know? And then they started 
working with us, and now it works wonderfully. But in Montana, 
we are fighting to get them to recognize the need.
    Senator Tester. OK. David?
    Mr. Bland. The first thing I would do is make the modest 
recommendation to change the Community Reinvestment Act to 
allow banks to get full assessment credit for an investment on 
an underserved, unbanked Indian reservation. I think that would 
unleash millions of dollars.
    Senator Tester. OK.
    Mr. Bland. The second thing I would do would be to 
encourage the States to equalize their understanding, if you 
will, or at least their acknowledgment that Indian Country is 
different. It is not the same as rural America, and it is 
certainly not the same as urban America.
    As Cheryl said, there are some States that embrace the 
notion of assisting tribal housing. In particular, Arizona is 
one of the more embracing States. North Dakota has a set-aside, 
but it is a small set-aside. It is only 10 percent of the 
State's allocation, and that is not nearly enough.
    But we are faced now with many of the States, as I said in 
my opening statement, are putting an emphasis on urban, in-fill 
developments and that also give credit and additional points in 
the competition for credit dollars for projects that are near 
urban amenities that you simply cannot have on Indian 
reservations--grocery stores, libraries, doctors' offices, and 
those sorts of things. There needs to be an acknowledgment that 
Indian Country is different and you cannot lump them together.
    Those would be the two, and I will ponder the third one.
    Senator Tester. OK. That is perfectly all right.
    Once again, I just want to thank you all for being here 
today. I appreciate your testimony. Thank you.
    Chairman Johnson. Ms. Causley, as Chair of the National 
American Indian Housing Council, can you give the Committee a 
sense of how NAIHC partners with HUD and others to provide 
technical assistance for tribes and their housing authorities? 
How does this partnership lead to more capacity building so 
that tribes can leverage their resources?
    Ms. Causley. We have one of the largest training and 
technical assistance programs in Indian Country. We encourage 
all of our tribes to create partnerships with public and 
private agencies beyond HUD. We integrate information and 
resources on leveraging our NAHASDA money. Anytime that there 
is actually a program out there, you should see--the need is so 
great in there. There is so little resources that they welcome 
it with open arms. ``How do we get the money?'' You know, it is 
like--I do not know how to explain it. So they want to know 
that knowledge. That knowledge and that learning and that need 
is so--I do not have the words for. So every single program 
that we come up with or that seemed to be interested in coming 
onto Indian lands, they want to know how to do it, and they 
want to know how to do it successfully.
    In May, our membership said, ``We want you to go, and we 
need you to bring the VA in. We want to know all about VA 
programs. We have Natives that need to be served. Bring them 
in. We want them at everything, and we want to be trained on 
how to access their programs. And if we cannot, we want to know 
how to fix them so our people that have been at war can be 
served.''
    I guess, you know, that would be my answer as far as that.
    We also have joint training courses with Travois, for 
instance. They come in and they train at our conventions and 
our meetings on how to apply for a low-income housing credit. 
For GSA products, for things like that, we will bring the GSA 
in to teach our membership. So that is how we address it.
    Chairman Johnson. In South Dakota, I have seen far too many 
inadequate homes on reservations that house two, three, or more 
families. In addition to overcrowding, there are a number of 
other problems, including black mold.
    Ms. Causley, can you give us a sense of the negative impact 
unsafe and overcrowded housing has on the health of Native 
communities?
    Ms. Causley. The impact is huge. We know that we are not 
supposed to put that many people into a unit. I think the most 
I had was 17 in a two-bedroom that I knew of. But we call those 
``the invisible tenant'' because they do not want the housing 
authorities to know that they are there. But that is a thing 
that I guess would differentiate us from the rest of the 
general public. You will never see a homeless Native unless it 
is summertime in my area because they would not survive. So it 
will be a grandma, it will be a cousin, it will be--but 
somebody will take them in.
    The mold, we fight with it. I tried to build an energy 
efficient house, but then if it is overcrowded, it is going to 
be even worse because of the mold implications. It is not 
healthy.
    South Dakota is very similar to Michigan. We have closed-
door conditions to begin with, so our doors are basically 
closed from October until May. And then you throw all those 
extra people in the house. Our respiratory problems are huge, 
as well as it filters into our health, but our education also.
    Chairman Johnson. Mr. Bland and Ms. Causley, a question for 
both of you. I constantly hear from tribal leaders that the 
lack of drinking and wastewater infrastructure is a huge 
impediment to increasing the housing stock in Indian Country. 
To what degree have you experienced these challenges? And how 
can we help address the need for this critical infrastructure? 
Mr. Bland?
    Mr. Bland. Yes, thank you, Senator. South Dakota in 
particular, with the low-income housing tax credit program, 
which is where we have most of our experience--I apologize for 
limiting most of my comments to that. That is where we do 
business. South Dakota has relatively low cost caps when 
compared to other States, and I think the rationale behind that 
is a good one. They want to spread the available tax credits to 
as many projects as possible; therefore, they will allow you to 
spend less money per unit.
    The problem is that assumes that you have got existing 
infrastructure, water and sewer, and that is not the case on 
Indian reservations. So when you have to add the extra cost per 
unit, which can be $20,000 or $30,000 just to bring water, 
sewer, roads--well, roads would be a luxury in many cases--but 
water and sewer, then you have lowered the amount of money you 
can spend on the dwelling unit itself, and it becomes almost an 
impossibility to get a fully financed housing project through 
the tax credit program in South Dakota. And you certainly 
cannot include the kind of public amenities that are present in 
other areas of the Nation.
    So, in particular--and that is not just South Dakota. North 
Dakota has cost caps as well. But it is a critical issue. If we 
could modify some of the program procedures to allow a 
splitting off the funds that you use for infrastructure, that 
would be a big help.
    Chairman Johnson. Wouldn't better land use planning play a 
part in this instance, Mr. Bland?
    Mr. Bland. Absolutely, it would. And the coordination 
between Indian Health Service and USDA and other agencies on 
provision of those kinds of critical infrastructure, plus the 
New Markets Program that can, in fact, finance some of those, 
if we could coordinate and use those various funding 
mechanisms, that would be a huge help.
    Chairman Johnson. Ms. Causley?
    Ms. Causley. In my tribe, I have been the director there 
for 22 years, sir, and I actually do very, very good land use 
planning. I built a project which had 80 units in it. Of 
course, you have to bring the infrastructure on a reservation 
to build anything. Every single person has to have 
infrastructure in place, because it is non-existent. So in 
order to draw and be able to have mortgages, a person that 
wants to put like a trailer, I cannot allow them in that 80-
unit project. But my project is full already, so I am 
completely landlocked.
    So I have got another development on top of a hill, but it 
is $6 million I am looking at for infrastructure. When you get 
a $285,000 allocation a year, it is going to take me a while to 
develop. So I have got my road up there, and you just do very 
small, little things at a time. But you also have to have 
areas, if you are going to try to leverage these other markets, 
you cannot put a $1,000 trailer next to a $90,000 unit because 
the banks are not going to like that very much. So land use 
planning is vital to it, but it goes back to the funding also.
    We also need to look at addressing the IHS prohibition and 
using sanitation facilities in conjunction with our monies. 
Like I said earlier, that should be a tribal decision. But we 
do not need a solution that will decrease funding for 
infrastructure for either one of us because it is so sadly 
needed on both our behalf.
    Chairman Johnson. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Bland, last year, you were honored at the HOPE Awards 
for raising more than $350 million in private capital to build 
or rehab almost 4,000 homes in Native communities across the 
country. Reviewing your experiences, what lessons can you share 
with others in navigating the Federal process? And, second, 
what feedback can you provide to Federal agencies looking to 
improve access to their programs for Native communities?
    Mr. Bland. Thank you, Senator. The lessons that we have 
learned in the 18 years that we have been in business and the 
23 years that I have worked in Indian Country, I think that the 
Federal agencies have to do a better job, need to do a better 
job at understanding the expectations of the private sector; 
that their expectation is not just to have a return on 
investment; it is an expectation that that return will be safe 
and will be sound and will be something that they can be proud 
of and will understand that the dollars that they invest will 
return to them, and they will be able to reinvest them.
    So the Federal Government, the Federal agencies, in 
particular, I think misunderstand the expectations of the 
private sector to have immediate return on their investment. It 
is not delayed gratification. There is not very much patient 
capital in the United States today. And I am not sure that we 
have ever had much patient capital, but we have less of it for 
Indian Country than we have ever had.
    So I think a better understanding of the requirements of 
the private sector by the various agencies, and flexibility. I 
think if the--no one's intent when legislation is written is to 
make something inflexible. Obviously, NAHASDA is, I think, one 
of the great success stories because of its great flexibility. 
The other Federal agencies, the education grants that go to 
tribal colleges that cannot be used for anything other than 
what it is prescribed for, it has to be used for a classroom as 
opposed to being able to use it for tribal housing, for 
example--excuse me, student housing; the USDA programs; if we 
could build in statutorily, if that is possible, the kind of 
flexibility that would allow these Federal funds to be combined 
with private sector dollars, those are the two things that I 
have seen in my 23 years that have been most striking to me 
Senator.
    Senator Akaka. Thank you very much for that response.
    This question is for both of you. In this Committee's last 
hearing on Indian housing, Federal agencies testified about 
their efforts to collaborate to ensure that Native communities 
have access to adequate housing. My question to you is: Can you 
provide any examples where the Federal agencies worked well 
together or where they could have improved their efforts for 
Native communities? Any examples?
    Mr. Bland. This is a difficult question, Senator. I think 
that the Indian Health Service is particularly problematic in 
its willingness to deal with other agencies, at least in our 
experience. They know and do what they do well, but they are 
one that I spoke to earlier. They in our experience seem to 
have less of an understanding of the demands of the private 
sector when they are putting private equity dollars into a 
transaction, where you are combining NAHASDA funds. To me it 
seems utterly ludicrous that you cannot combine Indian Health 
Service dollars with NAHASDA dollars to achieve a simple house 
to be built on a piece of ground. It seems utterly illogical to 
me that you cannot do that.
    Ms. Causley. And expanding on that particular situation, 
the tribes also want to have everything, or at least my tribe, 
when I cannot use Indian Health, I pay them out of a different 
fund to still come in and use their engineers, so my as-builts 
and my water department and utility department which I run have 
all those resources in place, because I think it is ludicrous 
to have something else out there built by someone else. So I 
utilize them anyway and have to pay an additional fee for those 
engineering fees, you know, in the places where they cannot 
help, because they are ultimately responsible for the water 
tanks and everything else coming into the reservation.
    Senator Akaka. Well, I was looking for examples of where 
they worked well together, but I certainly appreciate your 
feelings about how they should be.
    Ms. Causley. When you said ``working together,'' I guess 
that is where I am having trouble, because they still do not 
seem to work with each other. But there are improvements out 
there. The HEARTH Act being passed, the BIA actually worked 
with us wonderfully for the first time, and, I mean, there are 
big improvements there. So we are not going backwards, and they 
have worked with us as the council. So I cannot say enough 
about his ``killer bees,'' as they called them, and the things 
there. You know, they have done a lot of hard work. Like VA 
right now is coming into the picture a little bit more, but, 
you know, we are dragging them to come on over here, we need 
your money, too.
    USDA, boy, if we could do some work there, because that is 
more money. Like I said, my tribe does wonderfully with USDA 
and the college and things like that. But other States do not 
have that. That is where we--she at one point had said that she 
would have a tribal advisory committee, and they still have not 
put that into place, and we are pushing real, real hard for 
that because USDA seems like it should be hand in hand with 
Indian Country.
    Senator Akaka. Mr. Bland, any further comments?
    Mr. Bland. Senator, there are other sources of funding that 
are non-Federal also. The Affordable Housing Program, for 
example, of the Federal Home Loan Bank System, it is a 
federally mandated pot of money. I believe it is 10 percent of 
the Federal Home Loan Bank System's profits from each bank 
district. And many times they have a difficult--or an 
unwillingness to work at cooperatively with the Federal 
agencies with respect to the timing of when funds are 
available, and that sometimes stretches out when you can draw 
down the funds that have been granted to you or to a project 
through the Federal Home Loan Bank of Des Moines, for example, 
or Seattle or whichever bank it might have been. And because 
the time gets delayed, they will sometimes seek to withdraw 
those funds, take them back, and they are delayed because of a 
lack of coordination between the other agencies, whether it is 
the BIA, the Indian Health Service, HUD, or USDA.
    I was just reminded by our vice president here, Elizabeth 
Glynn, that we have a project on the San Carlos reservation in 
Arizona where we have got BIA, IHS, USDA, and HUD funding, and 
nobody is talking to one another. There is no single entity 
that coordinates all of those funding agencies. They all have 
the same goal, but nobody is talking to one another. And as a 
result, things get stretched out, and then investors get 
worried because now they are concerned that their investment 
dollars are put at risk, because is this project actually going 
to happen?
    So some coordination between the agencies I think would be 
very important. That is my third recommendation to Senator 
Tester, coordination between the agencies.
    Senator Akaka. Thank you. Thank you very much. I really 
appreciate your answers here, and I want to thank Director 
Causley and Chairman Bland for being here with us today.
    Thank you very much, Mr. Chairman.
    Chairman Johnson. Thank you all for your testimony and for 
being here with us today. Each of you plays an important role 
in providing American Indian families with safe, affordable, 
and high-quality housing options.
    This hearing is adjourned.
    [Whereupon, at 11:11 a.m., the hearing was adjourned.]
    [Prepared statements and additional material supplied for 
the record follow:]
                PREPARED STATEMENT OF CHERYL A. CAUSLEY
         Executive Director, Bay Mills Indian Housing Authority
       on behalf of the National American Indian Housing Council
                             July 24, 2012
    Good afternoon Chairman Johnson, Vice Chairman Shelby, and 
distinguished Members of the U.S. Senate Committee on Banking, Housing 
and Urban Affairs. Thank you for inviting me to attend today's 
oversight hearing to discuss partnerships to provide affordable housing 
in Indian Country. My name is Cheryl Causley and I am the Executive 
Director of the Bay Mills Indian Housing Authority. I am an enrolled 
member of the Bay Mills Indian Community located in Brimley, Michigan. 
Today, I appear before you in my capacity as Chairwoman of the National 
American Indian Housing Council (NAIHC). I wish to thank the Committee 
for this opportunity to appear before you today to discuss housing 
programs for Native Americans.
    I say without hesitation that tribal communities suffer from some 
of the worst housing conditions in the United States. New partnerships 
between the Federal and tribal governments and the private sector may 
provide local tribal communities the tools they need to meet the 
longstanding housing challenges and build better housing environments.
    As a community of advocates, we are committed to creating good jobs 
in tribal communities, providing our families with housing 
opportunities and building a brighter future for our children. We thank 
you for your leadership and vision in meeting the longstanding 
challenges throughout Indian Country.
Background on the National American Indian Housing Council (NAIHC)
    The NAIHC was founded in 1974 and has, for 38 years, served its 
members by providing invaluable training and technical assistance (T/
TA) to all tribes and tribal housing entities; providing information to 
Congress regarding the issues and challenges that tribes face in terms 
of housing, infrastructure, and community and economic development; and 
working with key Federal agencies to address these important and, at 
times, vexing issues, and to help meet the challenges. The membership 
of NAIHC is expansive, comprised of 274 members representing 463 \1\ 
tribes and tribal housing organizations. The primary mission of NAIHC 
is to support tribal housing entities in their efforts to provide safe, 
decent, affordable, and culturally appropriate housing for Native 
people.
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    \1\ There are approximately 566 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 grandfathered in 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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Brief Summary of the Problems Regarding Housing in Indian Country
    While our country has been experiencing an economic downturn that 
many have described as the worst global recession since World War II, 
this economic reality is greatly magnified in Indian communities. The 
national unemployment rate seems to have peaked at an alarming rate of 
nearly 10 percent and still persists at just over 8 percent; however, 
that rate does not compare to the unemployment rates in Indian Country, 
which average 49 percent.\2\ The highest unemployment rates are on the 
Plains reservations, where the average rate is 77 percent.\3\
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    \2\ Bureau of Indian Affairs Labor Force Report (2005).
    \3\ Many of these reservations are in the State of South Dakota, 
which has one of the lowest unemployment rates in the Nation. On some 
SD reservations, the unemployment rate exceeds 80 percent.
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    Because of the remote locations of many reservations, there is a 
lack of basic infrastructure and economic development prospects are 
difficult to identify and even more difficult to pursue. As a result, 
the poverty rate in Indian Country is exceedingly high at 25.3 percent, 
nearly three times the national average.\4\ These employment and 
economic development challenges exacerbate the housing situation in 
Indian Country. Our first Americans face some of the worst housing and 
living conditions in the country and the availability of affordable, 
adequate, safe housing in Indian Country falls far below that of the 
general U.S. population.
---------------------------------------------------------------------------
    \4\ U.S. Census Bureau, American Indian and Alaska Native Heritage 
Month: November 2011. See http://www.census.gov.

    According to the 2000 U.S. Census, nearly 12 percent of 
        Native American households lack plumbing compared to 1.2 
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        percent of the general U.S. population.

    According to 2002 statistics, 90,000 Indian families were 
        homeless or under-housed.

    On tribal lands, 28 percent of Indian households were found 
        to be over-crowded or to lack adequate plumbing and kitchen 
        facilities. The national average is 5.4 percent when structures 
        that lack heating and electrical equipment are included.

    Seventy percent of the existing housing stock in Indian 
        Country is in need of upgrades and repairs, many of them 
        extensive.

    Less than half of all reservation homes are connected to a 
        sewer system.

    There is an agreement among most Members of Congress, the Federal 
Government, tribal leaders, and tribal organizations that there is a 
severe housing shortage in tribal communities; that many homes are, as 
a result, overcrowded; that many of the existing homes are in need of 
repairs, some of them substantial; that many homes lack basic amenities 
that many of us take for granted, such as complete kitchens and 
plumbing; and that at least 250,000 new housing units are needed in 
Indian Country.
    These issues are further complicated by the status of Indian lands, 
which are held in trust or restricted-fee status. As a result, private 
financial institutions will generally not recognize tribal homes as 
collateral to make improvements or for individuals to finance new 
homes. Private investment in the real estate market in Indian Country 
is virtually non-existent, with tribes almost entirely dependent on the 
Federal Government for financial support in meeting their growing 
housing needs. The provision of such assistance is consistent with the 
Federal Government's well-established trust responsibility to American 
Indian tribes and Alaska Native villages that is underscored in the 
U.S. Constitution.
The Native American Housing Assistance and Self-Determination Act
    While we often discuss numerous challenges in providing low-income 
Native families housing opportunities, we must also consider a recent 
shift in the relationship between tribes and the Federal Government by 
reducing the regulatory requirements that historically burdened tribes 
attempting to develop housing with their Federal housing funds. The 
passage and implementation of Federal legislation has enabled tribes to 
leverage Federal funding for tribal housing in innovative ways, 
resulting in substantially increased housing production.
    In 1996, Congress passed the Native American Housing Assistance and 
Self-Determination Act (NAHASDA) to provide Federal statutory authority 
to address the above-mentioned housing disparities in Indian Country. 
NAHASDA is the cornerstone for providing housing assistance to low-
income Native American families on Indian reservations, in Alaska 
Native villages, and on the native Hawaiian Home Lands.
    The Indian Housing Block Grant (IHBG) is the funding component of 
NAHASDA, and since the passage of NAHASDA in 1996 and its first fiscal 
year of funding in 1998, NAHASDA has been the single largest source of 
funding for tribal housing. Administered by the Department of Housing 
and Urban Development (HUD), NAHASDA specifies which activities are 
eligible for funding.\5\ Not only do IHBG funds support new housing 
development, acquisition, rehabilitation, and other housing services 
that are critical for tribal communities, they cover essential planning 
and operating expenses for tribal housing entities. Between 2006 and 
2010, a significant portion of IHBG funds, approximately 24 percent, 
were used for critical planning, administration, and housing management 
and services.
---------------------------------------------------------------------------
    \5\ Eligible activities include but are not limited to downpayment 
assistance, property acquisition, new construction, safety programs, 
planning and administration, and housing rehabilitation.
---------------------------------------------------------------------------
    NAHASDA is scheduled for reauthorization in September 2013. The 
NAIHC developed and implemented an outreach process designed to 
encourage open discussion about the Act from inception to the present, 
from the perspective of the tribes and Tribally Designated Housing 
Entities (TDHEs), as recipients and intended beneficiaries of programs 
within NAHASDA. The outreach facilitated in-depth, ongoing discussions 
to assess the effectiveness of the Act, its individual components, and 
its rules and regulations in meeting its intended purpose(s). The 
objective of this extensive outreach process was to have a reauthorized 
Act that more effectively accomplishes its purpose of providing 
quality, affordable housing to tribal communities.
    Federal program spending restraints are a constant topic in the 
midst of both a struggling economy and concerns about deficit spending 
and the increasing national debt. It is against this economic reality 
that tribal housing entities are encouraged to promote tribal self-
determination and self-governance and continue development of 
innovative partnerships that complement NAHASDA programs to meet the 
tremendous housing backlog throughout Indian Country.
Leveraging Housing Funds
    Leveraging funds or investing borrowed money in a way that 
maximizes potential funding opportunities creates partnerships and 
solutions to providing low-income families with housing opportunities. 
Tribes are increasingly exploring innovative ways to utilize NAHASDA 
grant funds, combined with tribal funds and other resources, to 
maximize housing project outputs. The passage of NAHASDA in 1996 and 
its funding in 1998 have spurred several tribes into exploring 
partnerships with lenders or utilizing existing funds to enhance the 
effectiveness, efficiency, and success of housing projects.
    For example, tribal housing organizations are increasingly 
encouraged to leverage their IHBG funding to secure other sources, such 
as Low-Income Housing Tax Credits (LIHTC), and to combine multiple 
funding streams from other sources such as the U.S. Department of 
Agriculture Rural Development, U.S. Treasury Department's CDFI program, 
the Federal Home Loan Bank, private foundations, and commercial banks. 
However, even basic compliance requirements vary from program to 
program, presenting barriers to efficient administration of multiple 
funding streams and limit the ability of tribes to access multiple 
programs in an effort to reach adequate scale.
    Tribes are faced with income limitations, rent restrictions, and 
even requirements for providing notices to tenant that are inconsistent 
from program to program. Many organizations have developed numerous 
projects, each with a unique blend of funding. Some sources are 
significant in certain developments and entirely lacking others. In all 
cases, the number of units governed by the rules applicable to a 
certain funding source varies from one development to the next. As a 
result, some tribal housing entities are spending substantial resources 
to develop project-based compliance manuals as a tool to help staff 
comprehend complex and various rules that apply to different units 
within each development. The process is administratively cumbersome and 
inefficient. A better solution is for the Federal Government to launch 
a concerted effort to align program criteria for Federal housing 
programs. The Administration's proposed changes to the LIHTC income 
limitations are an example of a positive and strategic move in the 
right direction.
    It should also be noted that eligibility to receive funding 
available through various Federal housing programs is not consistent. A 
number of organizations in Alaska and Oklahoma, for example, cannot be 
accurately characterized as either tribes, units of local government or 
501(c)(3) nonprofit organizations. A simple solution would be to review 
eligibility requirements for Federal housing programs and, whenever 
possible, extend eligibility to entities that have been designated as 
Tribally Designated Housing Entity for one or more Indian Tribes for 
the purposes of NAHASDA.
Title VI Loan Guarantee Program
    Under Title VI of NAHASDA, HUD is authorized to guarantee notes or 
other obligations issued by tribes, or tribal housing entities, if 
approved by the tribe, for the purpose of financing affordable housing 
activities as described in Section 202 of NAHASDA. Eligible burrowers 
must be a tribe or a tribal housing entity that is an IHBG recipient. 
IHBG funds may be used as a security for the guarantee or other 
obligations. The objective of the program are to enhance the 
development of affordable housing activities, increase access to 
capital to further economic growth, and encourage participation in the 
financing of tribal housing programs or financial institutions that do 
not normally serve tribal areas.
Passamaquoddy Tribe of Maine
    Over the years, some tribes, such as the Passamaquoddy Tribe of 
Maine, have found creative approaches to maximize the impact of their 
NAHASDA funds they receive. Using the Title VI loan guarantee program 
to attract other sources of capital, the Tribe successfully leveraged 
its IHBG funds to enhance its housing development strategies. The 
flexibility of the Title VI program criteria, allows financing of any 
NAHASDA-eligible affordable housing activity for a period of up to 20 
years. Title VI has also proven to be a cost-effective source of gap 
financing during initial stages of a housing project.
    The Passamaquoddy Tribe used Title VI to construct 28 low-income 
housing tax credit units and a community center. The balance on the 
Title VI loan was paid down with the tax credits and Federal Home Loan 
Bank of Boston's Affordable Housing Program funds.
Section 184 Home Loan Program
    The HUD Section 184 program is a mortgage loan product designed to 
resemble a conventional, or private housing loan, and there are no 
income limits for the Section 184 Loan program. Because the Section 184 
loan program is guaranteed by the Federal Government, the program has 
provided much needed access to capital to many individuals and Native 
families who might otherwise struggle to obtain home financing.
White Mountain Apache (WMAT) Tribe
    The White Mountain Apache Tribe of Arizona utilized a blend of 
funding streams including NAHASDA, Section 184 guarantees, and tribally 
issued tax-exempt bonds to develop a 250 unit single-family housing 
project. This project provides long-term rentals (amount paid 
determined on family's ability) with the housing entity as the lessor 
and the tenants have the opportunity to purchase their units.
Bay Mills Housing Authority
    The Bay Mills Housing Authority of Michigan developed a tri-party 
agreement that included the Central Savings Bank as a partner. The bank 
was able to offer the Section 184 loan program, USDA Rural Development 
loans, or tribal loans to members of the tribe. Bay Mills used NAHASDA 
funds as downpayment assistance of up to 10 percent of the loan (not to 
exceed $8,000) to families with incomes at or below 80 percent of the 
area median. The tribe provides similar opportunities to families with 
higher incomes.
Nonprofit to Enhance Access to Funding
    Some tribes have created 501(c)(3) nonprofit corporations for the 
purposes of establishing an independent organization that accesses 
additional housing funding opportunities. Forming a 501(c)(3) is a 
multi-step process. First, the concept must be endorsed by the tribe's 
governing body. Once the concept is approved by the tribal government, 
a charter must be developed and submitted to the tribe and approved. 
Once approved and chartered, the nonprofit must maneuver through a 
complex field of Internal Revenue Service rules and regulations to 
appropriately establish a nonprofit entity. Based on multiple tribal 
housing examples, this process has provided increased access to a 
variety of funding possibilities and a greater ability to serve the 
individual housing needs of tribal members.
Yukon-Koyukuk Elder Assisted Living Facility (YKEALF)
    The Yukon-Koyukuk Elder Assisted Living Consortium (YKEALC) is a 
501(c)(3) organization founded to develop the Yukon-Koyukuk Elder 
Assisted Living Facility in Galena, Alaska. The facility is located on 
the banks of the Yukon River in central Alaska and was completed in 
2011.
    Five federally recognized Alaska Native tribes came together to 
create the facility: Nulato Tribal Council, Louden Tribal Council, 
Koyukuk Tribal Council, Ruby Tribal Council and Kaltag Tribal Council. 
Total investment in this assisted living center was $7.8 million.
    These tribes needed a closer facility to provide housing and 
services to their elders. Without a closer facility, elders would have 
been forced to move, and this would have put them far from their 
families, friends and culture. Through the development of YKEALC the 
elders can remain in their tribal communities and receive top quality 
housing and health care.
    The New Markets Tax Credit financing will allow the facility to 
purchase medical supplies, install solar panels on the roof and install 
a wood-based heating system. These energy efficiency measures are 
critically important due to the very high cost of energy in this very 
remote region. The financing also provides working capital to help fund 
operations at the facility. The project created 28 construction jobs 
and 10 permanent jobs.
    YKEALC will also work to keep the elders connected to the 
community--a crucial element of elder care. This is done through 
volunteer efforts of local residents bringing fish and game to the 
facility for community meals.
Native Community Development Financial Institutions
    Increasingly, tribal housing programs are exploring the advantages 
of instituting and working with Native Community Development Financial 
Institutions (CDFIs) in an effort to leverage resources for 
homeownership. Native CDFIs were created when the Community Development 
Banking and Financial Institutions Act of 1994 established the 
Community Development Financial Institutions Fund (CDFI) whose purpose 
is to promote economic revitalization and community development through 
investment and assistance to fund-certified CDFIs. The Fund offers 
grants, loans, equity investments, and other forms of assistance on a 
matching funds basis. CDFIs are administered by the U.S. Treasury 
Department.
    These Native CDFIs must demonstrate their independence from tribal 
government and inclusion of the tribal target population on its board 
of directors to obtain funding from the Fund. This structure is 
intended to assure separation from tribal politics and sound lending 
practices. CDFIs may also attract financial support from banks and 
other lenders and are especially conducive to tribal housing programs 
that seek focus on homeownership loans.
    It is the goal of most Native CDFIs to bring in funding from 
various sources to lend back to tribal community members at favorable 
rates or provide the necessary financial education and credit 
counseling to increase tribal members' access to lending products. 
Native CDFI's not only help to boost homeownership through providing 
loan products and other services, but they provide tribal members with 
the knowledge and skills in building productive financial 
opportunities.
New Mexico Native CDFIs
    In New Mexico, 10.7 percent of the population identified as 
American Indian and/or Alaska Native (AI/AN)--making it the third 
highest AI/AN-populated State proportionate to the rest of the State's 
population. Out of the 12 certified CDFIs in the State there are 4 
Native CDFIs that provide varied services to the tribal communities of 
Laguna Pueblo, Ohkay Owingeh, Isleta Pueblo, and the Navajo communities 
near Gallup, New Mexico. They provide mixed lending products, such as 
home mortgage loans, home rehabilitation loans, and construction 
lending. In addition, they provide homeownership education, financial 
education, and credit counseling and repair.
    The financing of the Native CDFIs are diverse, and underscore the 
multifaceted contribution from various funding sources to meet the 
housing needs in the New Mexico tribal communities. Three of the New 
Mexico Native CDFIs receive direct funding from their respective 
Tribally Designated Housing Entity, two CDFIs receive funding from the 
New Mexico Mortgage Finance Authority (a State agency), and two CDFIs 
receive funding from nonprofit entities. The Tiwa Lending Services 
(TLS) receives direct funding from the Pueblo of Isleta, which 
transferred its home loan portfolio and tribal funds to TLS.
Ho-Chunk Community Development Corporation (HCCDC)
    HCCDC is an emerging CDFI, and was formed by and partners with the 
Winnebago Tribe and its entities. The Mission of the Ho Chunk Community 
Development Corporation is to raise the socio-economic and educational 
levels of Native American communities and the people of Thurston 
County, Nebraska. A goal of HCCDC is to decrease substandard housing, 
increase housing opportunity, increase clients' ability to access 
housing, and increase capital available locally.
    The Winnebago Reservation lacks affordable housing and tribal 
members who are able to afford a mortgage are forced to live elsewhere. 
Others tribal members lack the funds for the initial downpayment to 
purchase a home. Using the Winnebago Tribe's other private subsidiary, 
Ho-Chunk Inc., the HCCDC and the Winnebago Tribe have worked together 
to develop a Housing Down Payment Assistance Program that provides a 
significant portion of a standard downpayment for a new homeowner. The 
homeowner is required to go through a special financial and 
homeownership education course and must meet other criteria to qualify.
    In 2010, Ho-Chunk, Inc. and the Winnebago Tribe authorized a $1 
million Housing Stimulus Program to set aside Ho-Chunk, Inc. dividends 
and other tax revenues to offer $50,000 in downpayment assistance to up 
to 20 new homeowners who build a home on the Winnebago reservation. 
Through these combined efforts, housing on their reservation is more 
affordable and tribal members can start building the traditional wealth 
that other non-Native homeowners have gained.
    Beyond their downpayment assistance program, the HCCDC has invested 
in Ho-Chunk Village, a modern comprehensive subdivision that 
incorporates their traditional village design. The Village will provide 
both commercial and residential development with a senior-living 
housing project, private homes, 20-unit apartment complex, and 10 unit 
town-houses. On the commercial side, the Village will include a 
commercial office building, laser art panels, veteran's park, sculpture 
garden, theater, playground, and public-use building. Beyond creating 
the needed affordable housing opportunities, the development of the Ho-
Chunk Village is raising the tribal economy and creating much-needed 
jobs.
Conclusion
    Given the funding constraints in the tribal housing arena and the 
need to not only maintain existing units, but keep up with growing 
tribal populations and meet the tremendous existing housing backlog, 
tribes have, out of necessity, been very creative in developing 
partnerships and crafting innovative solutions to meet their unique 
housing needs and expand community development. Some innovations are in 
the form of utilizing nontraditional financing mechanism or leveraging 
limited financial resources to realize their maximum benefit. While 
trying to address the need for affordable housing, some tribal 
communities have instituted efforts to re-vamp their community and this 
added development is boosting the tribal economy and creating jobs.
    In spite of the forward movement detailed herein, the value of the 
Federal funding authorized by NAHASDA, including the Indian Housing 
Block Grant program, the Indian Community Development Block Grant 
program, and provision of invaluable training and technical assistance 
for tribes to develop, enhance, manage, and improve tribal housing 
programs, is essential and cannot be over-stated. One of the most 
important functions that NAIHC's T/TA provides is a forum in which to 
share such innovative partnerships among tribal communities. In this 
process NAIHC is able to transfer information in the form of best 
practices, and such strategies will ensure that these innovative 
housing partnerships and strategies will be more broadly adapted and 
utilized.
    Thank you Chairman Johnson, Ranking Member Shelby, and all for 
organizing this hearing and opportunity to highlight solutions that 
help meet the overwhelming housing needs in tribal communities. Your 
continued support of tribal communities is truly appreciated, and the 
NAIHC is eager to work with you and your professional staff on any and 
all issues pertaining to tribal housing programs, the housing and 
living conditions for America's indigenous people, and to pursue ways 
that we can mutually address housing and housing-related community 
development throughout Indian Country.
                                 ______
                                 
                  PREPARED STATEMENT OF DAVID W. BLAND
                        Chairman, Travois, Inc.
                             July 24, 2012
    Good morning Chairman Johnson, Ranking Member Shelby and Members of 
the Committee. It is an honor to appear before you. Thank you for 
drawing attention to the ways private and public partnerships improve 
housing in Indian Country. My name is David Bland and I am the founder 
and chairman of Travois, a financial consulting firm that assists 
American Indians, Alaska Natives, and Native Hawaiians with affordable 
housing and economic development.
    While we still have a long way to go before all Indigenous people 
in the United States have safe, decent and affordable housing, I 
believe we have made significant strides in improving housing 
conditions since 1996. Thanks to your efforts Chairman Johnson and the 
passage of the Native American Housing Assistance and Self-
Determination Act (NAHASDA), and now with the passage of the HEARTH 
Act, tribes and tribally designated housing entities (TDHEs) have begun 
to leverage this funding, seeing ever more private capital coming to 
the reservations, specifically through the use of the Low-Income 
Housing Tax Credit (LIHTC) program.
    As you know, there is a critical shortage of privately financed 
housing in Indian Country throughout the United States. Most housing on 
Federal Indian Reservations has been built or rehabilitated through 
either the Department of Housing and Urban Development, Farmers Home 
Administration (now Rural Housing), or the Bureau of Indian Affairs. 
The housing that has been built has been financed from outside the 
Federal Indian Reservations, typically with subsidized debt, little or 
no equity, and often little or no direct financial involvement by 
tribal officials or other reservation residents.
    Due to the lack of local investment in affordable housing in Indian 
Country, the long-term preservation of housing assets and the regularly 
scheduled and effective maintenance and modernization of housing units 
has generally suffered. The rural nature of most of the reservations 
further complicates projects undertaken by American Indian Tribes. 
Increased construction costs and diminished competition for contractors 
in remote Indian Country areas create an obstacle generally not 
encountered in other areas.
    Until the onset of the Low-Income Housing Tax Credit program in 
Indian Country and the changes brought by NAHASDA, rent and account 
delinquencies were chronic challenges faced by many Tribally Designated 
Housing Entities. According to a report in Indian Country Today, it was 
estimated that prior to NAHASDA, 36 percent of all tribal area program 
tenants were delinquent in rent payments. As a result, the long-term 
viability of affordable housing equity investments had been severely 
limited in Indian Country. Along with the other changes envisioned by 
NAHASDA, it was determined that immediate steps should be taken to 
increase the affordable housing operational expertise in Indian Country 
and direct involvement in the Low-Income Housing Tax Credit program has 
been one of the first steps.
    Recent history and experience has shown that Native Americans will 
go to great lengths to live amongst their tribal extended family, 
despite the resulting overcrowding, grossly inadequate facilities and a 
severe shortage of available units. The number of affordable housing 
units needed by Native American families reflected by TDHE waiting 
lists can number in the hundreds of households--a staggering uphill 
battle. HUD estimates that since 2003, the housing shortage for Native 
Americans has increased more than 40 percent.
    While these statistics are bleak, Indian Country has made 
significant strides recently. Since 1995, our company has helped secure 
more than $450 million in private equity for Indian Country resulting 
in more than 4,200 units of affordable housing worth more than $627 
million. Unfortunately, this is a tiny portion of how much housing is 
needed, but we are proud of what the tribes and Travois have been able 
to accomplish together.
    This success would not have been possible without the perseverance 
of countless tribal housing authority executive directors such as Ms. 
Causley, Mr. Kirk and Mr. Kittson, their housing board members, tribal 
councils and dedicated staff, who work very hard to educate Federal 
funding agencies, State allocating agencies and investors on the unique 
nature of tax credit transactions in Indian Country. This process has 
been slow and at times, very difficult. When I started Travois in 1995, 
9 years after the establishment of the tax credit program, only one 
tribal project had been financed using the program. I knew that the 
housing tax credit program generated 90 percent of all affordable 
housing in our nation and I could not understand why this program had 
not been put to better use in Indian Country. Through my research, I 
discovered several barriers to success, many of which we have overcome, 
but some of which remain challenges today. We have developed several 
ways to work around these initial challenges. First, we structure all 
of our housing projects with ``soft'' debt in which an investor 
typically provides 80 percent of the total project cost with an equity 
investment and the TDHE provides 20 percent as debt, typically with 
NAHASDA funds. This allows TDHEs to charge very low rents, in line with 
what their tribal members can afford--and means the project has 
essentially no foreclosure risk.
    Second, many investors were initially reluctant to work in Indian 
Country based on a mostly erroneous understanding of tribal law. We 
have worked to devise an alternative dispute resolution mechanism 
acceptable to both tribes and investors, usually including a limited 
waiver of sovereign immunity solely for the project and dispute 
resolution enforcement in tribal court rather than State court.
    Third, and most vexing, many State allocating agencies, the 
agencies that control the distribution of tax credits, simply 
misunderstood Indian Housing programs and were reluctant to award 
housing tax credits for tribal projects. We worked very hard to develop 
relationships with the States and demonstrate the overwhelming need for 
affordable housing in Indian Country, and now many States include 
preferential points for tribal developments. Notably, Arizona has a 
tribal set-aside guaranteeing at least two tribal projects will be 
funded every year. We have come a long way since that first project and 
thousands of affordable housing units have been built or rehabilitated 
thanks to the tax credit program.
    Unfortunately, several challenges remain. We can divide these 
challenges broadly into two categories: a growing emphasis on urban 
areas by a variety of funding programs and a lack of investment 
interest by the majority of players in the housing tax credit market.
    First, we have seen State-allocating agencies decrease scoring 
opportunities for rural housing and increase opportunities for projects 
in urban areas more likely to be considered ``job centers.'' Given how 
the country is still struggling to jumpstart the economy, the goal 
seems to make sense at first glance, but in our opinion it indicates a 
lack of understanding of the truly desperate state of housing on most 
reservations. A case in point, in the last year many States have 
changed their qualified allocation plans to give preferential scoring 
for projects that are in-fill developments; located near transit stops, 
libraries, grocery stores, and the like; or near large employers. This, 
combined with a reduction in preservation and rural housing set-asides, 
results in the near elimination of tribal projects from tax credit 
competition. We are very concerned that this lack of consultation with 
tribal leaders and a disregard for the neediest populations will set 
Indian Country back yet again and reverse the positive trends we've 
recently seen.
    We believe it is important to encourage urban development near 
jobs, but in a balanced manner that does not eliminate affordable 
housing opportunities for tribal communities. For example, perhaps 
Congress could encourage State-allocating agencies to consult with 
tribal leaders when developing qualified allocation plans to better 
understand the great need in Indian Country. In our experience, many 
State-allocating agency staff know very little about life on the 
reservation and thus do not take the needs of tribal communities into 
account when developing policies and scoring systems. Another positive 
step would be for Congress to encourage State-allocating agencies to 
consider adding tribal set asides like has been done in the past for 
projects with HOPE VI funding, for farm workers, nonprofit sponsors, or 
for the elderly. Indian Country is as in need of affordable housing, if 
not arguably more so, than these groups. Unfortunately, that need 
continues to go unrecognized in many States.
    Second, investor interest in Indian Country, while growing 
substantially, has always lagged behind interest in other areas of the 
country. We have had great success finding investors for our New 
Markets Tax Credit-funded projects, but housing tax credit projects 
depend on a limited number of investors with a relatively small 
appetite. We believe much of this stems from a reluctance of big banks 
to invest outside of their Community Reinvestment Act (CRA) footprint. 
While this CRA-created market distortion is a problem for all of rural 
America and results in lower pricing for their projects, it is a 
particular problem for Indian Country given that many reservations are 
a many-hours drive from the nearest bank. Indian Country is largely 
unbanked and as a result too few commercial banks see Indian Country as 
a desirable CRA investment opportunity.
    Some modest changes to the way the CRA is administered could result 
in millions more in investments for Indian Country. For example, we 
believe regulators could put a greater emphasis on investing in our 
neediest communities, tribal communities, and thus encourage banks to 
meet their CRA requirements beyond just their immediate footprint. 
Perhaps a Gulf Opportunity Zone-type structure could be used to 
encourage investment in Indian Country just as recognition was given to 
Alabama, Louisiana and Mississippi after Hurricane Katrina. We believe 
there are many opportunities to encourage private and public 
partnerships in Indian Country along these lines.
    Finally, despite the challenges that we still face, the housing tax 
credit program is incredibly valuable to Indian Country. Every year the 
tax credit industry announces the Charles Edson Award for Excellence in 
Affordable Housing. For the first time ever a project in Indian Country 
took the top award for rural projects this year. The Colville Indian 
Housing Authority's project on Buttercup Lane is a beautifully designed 
project intended for eventual tenant ownership. So this project, while 
providing very affordable family housing, will also create homeowners. 
This is a shining example of what can be done through public private 
partnerships and we are thrilled to have played a role in its 
development.
    I am happy to answer any questions you may have. Thank you.

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