SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOC
IMPROVING HOUSING OPPORTUNITIES
FOR NATIVE AMERICANS
Monday, May 3, 2004
U.S. House of Representatives,
Subcommittee on Housing and
Community Opportunity,
Committee on Financial Services,
Washington, D.C.
The subcommittee met, pursuant to call, at 12:00 p.m., at the Greyhills Academy High School Auditorium, Tuba City, Arizona, Hon. Robert W. Ney presiding.
Present: Representatives Renzi and Waters.
Also Present: Representative Matheson.
Chairman NEY. The subcommittee will come to order.
I wanted to explain the process a little bit before we start and make an opening statement and then we will have other members make opening statements.
But the Financial Services Committee of the U.S. House is chaired by Mike Oxley of Ohio, and the ranking member is Barney Frank of Massachusetts, and we have the Subcommittee on Housing and Community Opportunity, which is what this subcommittee is of the U.S. House.
My name is Bob Ney. I'm the chairman of the subcommittee. I'm from the State of Ohio. We also have our ranking member to my right, Maxine Waters of California. To my left, everybody knows Congressman Renzi of Arizona. And I assume that applause is for all three of us right now. To my extreme right, Congressman Matheson of Utah. You can applaud for him, too.
Page 2 PREV PAGE TOP OF DOC
This is an official hearing of the U.S. House of Representatives subcommittee. We have a timer, and we basically run the timer. It makes a beep, I think. We will give you a little tap here. That doesn't mean we are going to cut you off right at that spot in the middle of your sentence, but we keep it to five minutes of testimony from each witness. And I think we have 16 witnesses today, so we are going to try to hold it to five minutes and then the members up here will have five minutes to ask questions. But, again, if you are in the middle of your statement, feel free to complete it. But that way, if we hold you to the five minutes, that will give us time.
And anything you want to submit for the record, we will do that without objection. And you can submit the rest of your testimony for the record. So, without objection, all of the opening statements will be made part of the record of the U.S. House.
I also wanted to tell you the Subcommittee on Housing last year—and I want to praise our ranking member, Maxine Waters of California, and the rest of the members frankly, that couldn't be here today—we passed approximately 11 housing bills that actually went on to be signed into law. And that was done, and I'm very proud of our roll call vote in the subcommittee. It doesn't mean we didn't have our differences or didn't speak our peace on things, but the subcommittee, I think, acted on a bipartisan basis. And I wanted to commend our ranking member, Maxine Waters, and members of the committee who really tried in a diligent way to do something about housing. Sixty some percent of Americans have housing. The minority rate is 50 percent. That is unacceptable, and we have taken some steps, there are a lot more steps to be taken, so everybody can share in the American dream.
I do want to tell you how this particular subcommittee hearing came about. It happened about 2:00 o'clock in the morning. We were having one of those late night votes, and Congressman Renzi—I will let him tell you the story when he makes his own statement, but he came to me and he had seen some very, very deplorable conditions when it came to housing. The housing subcommittee also oversees Indian housing, so Congressman Renzi asked the question of myself, which we said yes to, and with the cooperation of our ranking member, Maxine Waters, we are here today along with our colleague, Congressman Matheson, who is concerned about this issue.
Page 3 PREV PAGE TOP OF DOC
When Congressman Renzi asked for this hearing, we started to research back—this is Tallman Johnson of our staff, and also Cindy Chetti is here in the back, and I know Congresswoman Waters will introduce the staff that's here for the minority. But we researched back, and there had never been a hearing on Indian land in the history of the United States by a housing subcommittee. So this is the first time in the history of the United States that there is a hearing. I want to thank Congressman Renzi for making that possible. I guess I could say it's long overdue.
So it's a historic day for our Subcommittee on Housing and Community Opportunity, and as chairman, it's my honor to preside over today's proceedings which, again, is the first time this subcommittee has ever held in the history of the United States a hearing on tribal land.
Presently, the Native American population is estimated at 2.5 million. While the national poverty rate is 12 percent, the rate among Native Americans is more than twice as high. Forty-five percent of all Native American households are located on tribal lands, and housing is one of the most pressing issues for Native Americans living on tribal lands.
Over 32.5 percent of the homes located on tribal lands are overcrowded; 7.5 percent of the Native American homes lack safe water or sewage systems; less than 50 percent of the homes on reservations are connected to public sewer systems, and 16.5 percent of homes on native lands are completely without any form of indoor plumbing. About 40 percent of tribal homes are considered substandard compared to a national average of six percent.
Native Americans today are experiencing chronic housing affordability problems. Approximately half of the Native American households in tribal areas pay over 30 percent of their income for housing expenses compared to the 23 percent of all U.S. residents who pay more than 30 percent of their income for their housing expenses. Much of this is due to the unique relationships, I believe, that Indian tribes have with the U.S. Government. Native Americans while residing on reservations are U.S. Citizens, but their tribes are recognized as domestic sovereign nations with treaty relationships with the U.S. Government. The fact that the Bureau of Indian Affairs, BIA, holds much of the land in trust means that tribes are allowed only limited sovereignty over their lands. This special relationship limits the types of economic activity for which Indian lands may be used, and I'm hoping today this hearing will be the step to try to bridge that so that more things will be able to happen.
Page 4 PREV PAGE TOP OF DOC
One of the most important cornerstones to a strong community is homeownership. It creates stability and serves as a strong economic staple in our overall U.S. economy. While the national homeownership rate has steadily risen and is at an all-time high of over 68 percent, there are sectors of the population for whom homeownership remains unattainable. In fact, the homeownership rate for Native Americans is well below 50 percent. Clearly, more can and should be done to help all families realize the dream of owning a home.
The changing land status issues, diversity of tribal laws and governments, lack of mortgage information and credit issues all contribute to the challenges in mortgage lending in Indian country. Developmental programs delivered to Indian lands should be highly flexible and adaptive to the very unique and specific circumstances in each tribal setting. Native Americans must be able to take full advantage of partnerships and partnering and leveraging efforts across institutions and at all levels of our government and through all agencies where it's available. If we begin to succeed at these initiatives, then opportunities will move into these rural areas.
As we work to help strengthen homeownership opportunities in Indian country, together we will continue to play a significant role in improving the quality of life for all families.
And with that, I will yield to our ranking member, Ms. Waters.
[The prepared statement of Hon. Robert W. Ney can be found on page 78 in the appendix.]
Ms. WATERS. Thank you very much, Mr. Chairman.
I would first like to thank you for responding to Congressman Renzi and Congressman Matheson, recognizing the need for such a hearing and getting it done. I have enjoyed working with you. I think that you have shown your concern for poor people and people of color and others who do not enjoy homeownership to the same degree that our majority of the population enjoys, and I'm very pleased that I have an opportunity to participate in this hearing today.
Page 5 PREV PAGE TOP OF DOC
I'm very pleased to be here in Tuba City to participate in the first hearing on Native American housing issues ever held on Navajo land. And, again, Mr. Chairman, it's because of you and Congressman Renzi and Congress Matheson that we are here. I would like to thank both of our staffs for the wonderful work that has been done in putting this visit together.
The tour that we were on this morning was awfully revealing, and I wish every member of Congress could see what we saw today. A special thanks to our staffers, Jeff Riley, who is our counsel; and Jaime Alisiga, who is our parliamentarian, along with the other staff members and all who have helped to work to put this tour together and this hearing together.
I am very concerned about the many barriers that Native Americans face when they seek to pursue homeownership. Whether it stems from Native American poverty or the heavy hand of bureaucracy at the Bureau of Indian Affairs when prospective homeowners seek BIA approvals, we cannot accept a process that produces so many fewer opportunities for Native Americans to own their homes and thereby build wealth than for others who live in America.
While I know that you sought the BIA's appearance at this hearing, Mr. Chairman, I'm disappointed that the Bureau of Indian Affairs is not represented on one of the panels today. This government agency, more than any other, needs to step up to the plate and work together with the tribes, HUD, RHS and the secondary market to formulate solutions to the housing problem on Native American lands.
While I am glad that we are discussing the significant housing challenges faced by Native Americans, I'm hopeful that we can all work together, the Congress, the administration, can work together to increase appropriations for assistive housing programs. And we all, I think, because of what we are learning, can take another look at any proposed budget cuts for the year 2005. I just think that the more we know, the less we can accept budget cuts.
I look forward to the insights of our witnesses, especially our tribal witnesses, as to how we can develop solutions that meet your needs for housing and homeownership opportunity while respecting your culture and your sovereignty.
Page 6 PREV PAGE TOP OF DOC
Mr. Chairman, when land was taken from Native American tribes, the United States gave its solemn promise to protect the rights of the tribes to govern themselves and to provide for the health, education, and well-being of tribes. That commitment, the trust responsibility, is not a handout but a contract, a contract that unfortunately has been broken time and time again by our own government.
I believe that an essential element of the federal government's trust responsibility is that it must take the steps necessary to make homeownership opportunities as available to the members of tribes as they are to the rest of America's population. With a Native American homeownership rate of only about 33 percent as compared to an overall homeownership rate approaching somewhere around 68 percent, it's clear that much work will need to be done.
The Native American population is one of the fastest growing groups in the United States. Unfortunately, it is also one of the poorest segments. According to the U.S. Census Current Population Survey, the poverty rate of Native Americans in the late 1990s was about 26 percent while the national average was 12 percent. By any calculation, the increases in population are creating housing needs which continue to far outpace the funding that we are providing.
While land and home are viewed as central to family life in the Navajo culture, the housing problems of the Navajo Nation are nonetheless particularly severe. The Navajo Nation is the largest reservation in the country. It covers over 16 million acres in three states. It is the size of West Virginia. There are 255,543 enrolled members of the tribe with about 180,000 living on tribal land. The median age, we understand, is about 22.5 years.
According to the 2000-2001 Comprehensive Economic Development Strategy Report from the Native Nation Office on Economic Development, 56.1 percent of Navajo people live below the poverty level, the per capital income is only about $6,212, and the unemployment rate is about 43.65 percent. Some 31 percent of the homes on the reservation lack complete plumbing, 60 percent lack telephone service, and about one-fifth of owner-occupied units on the reservation are mobile homes. The development of housing on the Navajo Nation is even more complicated than it is on other reservations, as 94 percent of Navajo land is tribal trust land, the most difficult type of land to develop.
Page 7 PREV PAGE TOP OF DOC
Mr. Chairman, strong communities are built one home at a time. To strengthen reservation communities, we must provide safe, decent, affordable housing for all families living in them. Today, approximately 40 percent of all reservation housing is inadequate. Twenty percent do not have plumbing.
Mr. Chairman, the unmet housing needs in Indian country are simply enormous. HUD at one point estimated that current NAHASDA funding levels would only meet five percent of Native Americans' needs for housing. Without going much further, when we talk about NAHASDA funding or some of the proposed cuts, because of what we know and what we are learning, I think we are going to have to all work together to review any proposed cuts and, again, get the administration together with the Congress of the United States and do the right thing, just do what we need to do.
In closing, let me say to Congressman Renzi that your guidance on the tour this morning was absolutely fascinating and certainly appreciated. You know your district and you certainly understand these concerns, and I'm very appreciative for the time that you took to put this meeting together and the statistics, this data, that was gathered for me by my staff. I want to thank you, and Congressman Matheson, I want to thank you for working together with us. Mr. Renzi as you address these very complicated and tremendous problems that you're confronted with.
Thank you very much, Mr. Chairman.
[The prepared statement of Hon. Maxine Waters can be found on page 84 in the appendix.]
Chairman NEY. Thank you.
I also want to note, I, too, am disappointed the BIA is not here, and we will talk at a follow-up hearing, also. Since this is the first-ever hearing, I would prefer they be here on Indian tribal land, but we will follow up with them, also, in Washington.
The gentleman from Arizona, Mr. Renzi.
Page 8 PREV PAGE TOP OF DOC
Mr. RENZI. Thank you very much.
Let me begin by thanking Chairman Ney, Ranking Member Waters, and our neighbor to the north, Congressman Matheson of Utah, for traveling this far, for taking the time. I also want to recognize the leaders of the Coconino County board of directors. Deb Hill is here. We have council delegates from the Navajo Nation, from the Apache Nation, from the Hopi Nation, our leaders, our chairmen, our presidents are here, which we will introduce them a little bit later. I thank all of you for finally coming together and helping me and working with us to pull off this field hearing which, as we have heard, is historic. It's long overdue.
I represent more Native Americans than anyone else in Congress. I've told President Shirley on many occasions it's hard for me to go home to Washington, to go home to my ranch, and call myself a congressman after I've been to Kaibito and seen the deplorable conditions up there. The first time I went up there, I saw six children living in a mud hut with their grandmother raising them, and they had dysentery. And, so, to be able to sit with myself and look at myself in my own mirror, I have to—and be a representative, I'm so very thankful for Chairman Ney who, when I went back to Washington after seeing that, on the floor at 2:00 o'clock in the morning, he committed that he would come out here and have this hearing this morning.
So, Chairman Ney, thank you for coming all the way out from Ohio and bringing a full-blown Congressional hearing to the Navajo Nation to address this issue. My district is over 60,000 square miles, larger than the State of Illinois. Our Speaker of the House is from Illinois, and I have a tendency to tell him my district is bigger than your State, I need more money, I need more help.
And it's my privilege to represent the Navajo. There are Hopi members within this district, the Zuni, the San Juan Paiute, the Tonto Apache, Yavapai Prescott tribe, the San Carlos and White Mountain Apache tribe. Strong, wonderful people who give and serve this nation and who deserve the very best, and they deserve our government to meet their treaty obligations. This is why we are here today.
Page 9 PREV PAGE TOP OF DOC
Home ownership in America is many times referred to as an American dream, but how much of a reality is that dream here on native—in Indian country? We are learning that homeownership has a beneficial effect. Obviously, it helps marriages; obviously, it helps reduce crimes and helps with law enforcement in communities. But have you ever heard that there are studies that now show that math achievement and reading recognition scores are seven percent higher among young children and graduation rates are 13 percent higher among families who own their own home? Who would have thought that the fruits of homeownership actually go all the way down to test scores.
In addition, families can build equity in their homes. It allows them to borrow against the equity to get their kids to go to college, to be able to borrow against their homes and form their own small businesses. I'm able to become a U.S. Congressman because I borrowed a second mortgage on a home in Sierra Vista, Arizona, built a little insurance agency and then was able to go to law school and then run for Congress. And yet, unfortunately, homeownership among Native American families is less than one-third. So one out of three Native American families actually own their own home.
And as we saw today, and as Ranking Member Waters pointed out, we saw children living in nothing more than wooden shacks without electricity, without modern sanitation and without pure water. We met a woman today whose water well is contaminated by oil. And so these are chronic problems where health officials are recognizing that these conditions are contributing to physical and mental defects in our children, and in particular in these areas.
In the first district of Arizona, we also have the problem with the Bennett Freeze. This is an area of 1.3 million acres in size which, due to conflicting claims, the federal government in 1966 imposed a ban on further construction. We have seriously never addressed the adverse conditions which are imposed by this wrong policy.
Now, I've got to give it to Chairman Taylor and the Honorable President Joe Shirley, because these two people are working together to seriously address the issue of the Bennett Freeze and we are coming very close to an agreement and a compact.
Page 10 PREV PAGE TOP OF DOC
Finally, it is my hope that this first hearing will not only shed light on the issue, but out of it will come direct objectives and missions. We will have results, not just words, to talk about. I am going to follow up with a workshop. I'm going to ask Chairwoman Kathy Kitcheyen of the San Carlos Apache to host it. We will have a workshop. We will bring in private industry, the banking, financing, the credit people will come in and begin to address the ideas of how this first generation of Native American people can break through the impediments to homeownership, whether it be putting more counselors on the Navajo or the Hopi or the Apache Nations, so that the young people can enjoy homeownership, so the application process itself doesn't become a wall or an impediment to homeownership. So I'm looking forward to following up and asking your leadership with that workshop.
Mr. Chairman, if I have your permission, I would like to introduce a guest that we have. With us today is Mr. Eddie Cody of the Navajo Nation. He is a recent recipient of USDA home repair funds. Mr. Cody needed an addition to his home and we were able to help him through the USDA 504 Home Ownership Repair Program.
One of the things that's so important, real quick, about these programs is the Navajo people, the Hopi people, the Apache people don't want to send their elders down to Phoenix to nursing homes. And having the ability to add on additions to their homes allows them to bring the elders in for respite care and elder care in their homes rather than shipping them off to a nursing home. With this kind of a program we are able to fund additions onto the homes and reach out to our elders in our community.
So, with that, I want to thank the people of northern Arizona, particularly those who have taken their time away from their families to come here today.
Mr. Chairman, I yield back. Thank you.
Is Mr. Cody with us in the audience? Mr. Cody, thank you.
[The prepared statement of Hon. Rick Renzi can be found on page 83 in the appendix.]
Page 11 PREV PAGE TOP OF DOC
Chairman NEY. Thank you.
Congressman Matheson from Utah, who borders the entire state of Arizona, and who spent time with Congressman Renzi today sharing their concern, and also some of the groups. Obviously, that border between the two states doesn't exist when it comes to Indian affairs.
Mr. MATHESON. Thank you very much, Mr. Chairman. Thanks for holding this hearing. I want to extend my thanks to you. I'm also really glad to join you and Ranking Member Waters and Congressman Renzi today.
This hearing is, as Congressman Renzi suggested, probably long overdue and I'm pleased we're here. Thank you for your leadership in making this happen. I really look forward to hearing testimony today from this distinguished group of witnesses.
I would especially like to, before I start with my statement, welcome my constituent, Mr. Mark Maryboy, delegate from Utah on the Navajo Nation Council. I believe we will hear from him on the third panel.
Many Native Americans continue to live in appalling housing conditions, and this is taking place at the same time while much of our nation is improving in this regard. Now, the Senate Committee on Indian Affairs has released a report that shows American Indian and Alaska Native populations live in housing that is often and justifiably compared to third world nations. One out of every five Indian homes lacks complete plumbing facilities and over 90,000 American Indians and Alaska Natives are homeless or underhoused.
I have had the opportunity to see firsthand the need for housing in Indian country when I visited the Utah portion of the Navajo Nation, which I represent in Congress, and also the tour we took this morning through parts of Arizona. I have met with families and individuals who have expressed their frustration with the process of building and owning a home on tribal lands. My constituents have raised a number of challenges to homeownership, including duplicative tribal and federal bureaucracy of obtaining homesite lease, trust status of tribal lands, lack of basic electrical and water delivery systems, lack of roads, lack of federal funding, and the difficulties these individuals face in trying to obtain conventional mortgages.
Page 12 PREV PAGE TOP OF DOC
During my time on the Navajo Nation, I have had the opportunity to become acquainted with one particular grassroots non-profit organization, Indigenous Community Enterprises. I have seen their approach to addressing the housing needs of the often-forgotten Navajo elders. Utilizing a NAHASDA subgrant and local resources, including, in the case of one I visited in Utah, the Monument Valley High School vocational students and Utah Navajo Trust Fund financial support, ICE constructed an elder hogan home that will be traditionally blessed this Friday, May 7th. The ICE elder hogan home incorporates the traditional octagon hogan in its design. The design respects the traditional space but adds the basic amenities of a modern kitchen and bathroom.
ICE employs a community-based approach of personal responsibility and capacity building to build hogan homes. Collaborating with local high schools, Navajo Nation entities, banks and community and family members, ICE seeks to address the underlying problems to homeownership on the Navajo reservation by not only construction of a hogan home but by offering financial literacy, Individual Development Account savings programs, homeownership skills and credit counseling. Additionally, ICE uses small diameter timber from the regional forest thinning and is moving towards using straw bale products that can be manufactured from the Navajo Agriculture Products Industry.
Innovative ways to provide homes, the use of local resources, and ensuring that individuals have the necessary financial knowledge and skills can make homeownership a reality in Indian country. We can no longer look toward any government to simply provide homes. It will require innovative, collaborative efforts such as this to address the housing needs that I witnessed on the Navajo Nation. It will also require a deeper understanding of all parties involved of the true obstacles to adequate housing, be they a lack of infrastructure, supply, mortgage products, or incentives to build.
Again, Mr. Chairman, thank you for holding this important hearing today. I look forward to hearing from each panel to better my understanding of the issues that the federal government, tribal governments, housing entities and financial institutions face in addressing the housing shortage in Indian country. I look forward to hearing their recommendations for improving housing opportunities for Native Americans and I look forward to working with my colleagues to implement any necessary legislative solutions. Thank you very much.
Page 13 PREV PAGE TOP OF DOC
[The prepared statement of Hon. Jim Matheson can be found on page 80 in the appendix.]
Chairman NEY. Thank you. I want to thank all the members for their testimony. And as far as the panel of witnesses, without objection, their written statements will be made part of the record and their five minutes will begin.
Let me introduce the panel and then we will get right to the testimony. First member of the panel is Kathy Kitcheyen, and she is the chairwoman of the San Carlos Apache. The San Carlos Apache Indian reservation encompasses more than 1.8 million acres in southeastern Arizona. Welcome.
Dallas Massey, Sr., the tribal chairman of the White Mountain Apache Tribe. Its 12,000 members reside on 1.6 million acres of its ancestral homeland on the Fort Apache Indian reservation about 200 miles northeast of Phoenix. Welcome to you.
And Joe Shirley, Jr. is the sixth President of the Navajo Nation. The nation has approximately 225,000 members and a land base of 7.5 million acres across New Mexico, Arizona and Utah. Welcome, President Shirley.
And Chief Chadwick Smith is the principal Chief of the Cherokee Nation of Oklahoma, based in Tahlequah. Am I close.
Mr. SMITH. Close. Tahlequah.
Chairman NEY. Tahlequah, Oklahoma. Welcome, Chief.
And Wayne Taylor, Jr. Is the chairman of the Hopi Tribe. The Hopi reservation covers 1.5 million acres in northeastern Arizona and is bound on all sides by the Navajo reservation. Welcome, Chairman Taylor.
We will start with Chairwoman Kitcheyen.
STATEMENT OF KATHLEEN KITCHEYEN, CHAIRWOMAN, SAN CARLOS APACHE
Page 14 PREV PAGE TOP OF DOC
Ms. KITCHEYEN. Good afternoon, Chairman Ney, Ranking Member Waters. You better reset that because I think I lost 30 seconds.
Chairman NEY. That's right. You speak up.
Ms. KITCHEYEN. Good afternoon, Mr. Ney, Chairman; Miss Waters, Ranking Member; Mr. Matheson from Utah, and also our very own Rick Renzi, who has a very passion about his work. And we thank you for coming and being able to organize this, Mr. Renzi. Thank you very much.
As you've just heard, my name is Kathy Kitcheyen. I'm the chairwoman of the San Carlos Apache Tribe based in San Carlos, Arizona. I am very honored to be here to testify today.
As you've already mentioned, it's an historic occasion. It's been a long time coming. We have been dealing with the United States government for over 500 years and never have we seen people of your caliber come out to our part of the country.
So I thank you very much for your compassion, for your humility, and for your courage. Thank you. Today, I am joined by Robert Olivar, who is on the council and is the chairman of our housing authority. And also there is a delegation, Ronald Boni, who is executive director of housing; Opal Kees, staff person; Chuck Hills, staff person; and also Debbie Ho as well.
Also in the—well, before I begin, again, I would like to thank you for addressing the needs of housing in Indian country. What you saw today is probably what you see on other Indian reservations as well. We appreciate the dedication that you have to this serious issue. I'm sure it's not easy being far away from Washington D.C. And all the Starbucks.
To better understand the housing needs of my tribe, it is helpful to know our history. The aboriginal territory of the Apache Nation included the western part of Texas, Arizona, New Mexico, and the country of Mexico as well. Pursuant to the Treaty of Santa Fe of 1852, lands were set aside for a permanent Apache tribal homeland and the United States promised to provide for the humane needs of the Apache people.
Page 15 PREV PAGE TOP OF DOC
The San Carlos reservation was established in 1871. Through the concentration policies of the United States, various bands of the Apaches were forcibly moved to the San Carlos reservation. Throughout history, the United States diminished the size of the reservation several times due to the discovery of silver, copper, coal, and water. The reservation now spans three Arizona counties: Gila, Graham and Pinal. The reservation currently has a land base of 1.8 million acres. It's mostly rural and lacks basic infrastructure in many parts. The total population is 12,532 members.
A majority of our members live on the reservation, 84 percent of them. While we have worked hard to develop our reservation economy, there is still a high unemployment rate of 76 percent. We suffer from a poverty level of 77 percent. The tribe has designated the housing authority to operate and administer the tribe's housing program. We have two critical housing needs, a severe housing shortage and severely inadequate utility infrastructure. These inadequacies create unsafe and unsanitary conditions.
This situation is simply unacceptable in this great country of ours. Let me be clear that the San Carlos Apache Tribe supports our troops in Iraq and other parts of the world. The Apaches have many decorated war veterans that have served with distinction. In fact, the San Carlos Housing Authority has an employee named Percy Via, an army reservist, who has worked for them for 20 years. He was called to duty and was part of the first wave of army soldiers to invade Iraq. He just returned home three weeks ago, and we are very proud of him.
However, I wonder about some of the priorities of the United States when Indian communities, my community, the San Carlos Apache reservation, was never built the way it should have been, when our needs were never addressed the way it should have been; why we have overcrowded conditions when there are people, disabled people, living without the proper ramp, without proper facilities in the bathroom.
When I hear about the billions of dollars the United States is spending to rebuild Iraq, homes and infrastructures for them, I wonder why the United States will help them but put the issues of the first Americans aside. I cannot stress enough the dire housing shortage on the reservation. There are approximately 2,400 families on the reservation in need of homes. Thirty-nine percent of families live in substandard housing and 40 percent of families live in overcrowded conditions.
Page 16 PREV PAGE TOP OF DOC
We have calculated that it would take building 125 homes a year for ten years to meet the housing needs of tribal members. Also, 94 percent of our families are considered low income. Mr. Olivar, the chairman of our housing board, recently stated that he receives at least six visits a day from families who have no place to go and are in desperate need of housing. It is heartbreaking to tell these families that the waiting list is too long and that there are no homes for them. I know other council members meet with families with the same plights as often as Mr. Olivar. I have a couple pictures over here to my right that depict a couple of the homes on the reservation, and there are many more like them.
One area that needs improvement is the environmental review process required for HUD's Indian Housing Block Grants. The tribe is frustrated with the long amount of time that it takes for HUD to approve these environmental reviews. The tribe submitted environmental reviews for two of its housing projects over a year ago and there has been no action taken by HUD. As discussed above, we have tribal members who are homeless or in need of serious rehabilitation. These delays, therefore, take a huge and sometimes irreversible toll on our people. We recommend that HUD be given more resources to handle the huge loads and we also recommend that HUD streamline and expedite the process.
And tied to our housing needs are our utility infrastructure. The tribe's utility infrastructure is sorely inadequate. Without improved infrastructure, it will be difficult to provide decent housing. Specifically, our sewage treatment systems are in such bad shape that they are causing a health risk to nearby communities as well. The hydraulic capacity of our existing sewage treatment facilities have been exceeded by approximately 16 percent. Due to the lack of funds, the existing sewer ponds are filling with too much sludge and the berms have been deteriorated.
In an attempt to address our sewage system problems, the tribe did seek funding from USDA's Rural Housing Service a few years ago. However, the Rural Housing Service did not have enough funding to allow us to fix our sewage system problems.
Page 17 PREV PAGE TOP OF DOC
The tribe's current water storage facilities are also inadequate. The storage tanks are too small and do not meet the tribe's demand by 24 percent. In order to provide and build more homes, adequate storage and distribution systems need to be installed. Unfortunately, the tribe does not have the funding to upgrade or build the required systems to meet demands. We would certainly appreciate your assistance on these matters.
As a final point, I was in attendance at the signing of an executive order by President Bush related to Indian education of the No Child Left Behind Act last week. Rod Page, Secretary of Education, and Gale Norton, Secretary of Interior, are to spearhead the interagency Indian Education Groups.
The simple fact is that if our children are to be successful, they need adequate housing. And with that, I rest my case. Thank you for the opportunity to testify, and please come again.
Chairman NEY. Thank you very much. I appreciate your testimony.
[The prepared statement of Kathleen Kitchen can be found on page 115 in the appendix.]
Chairman NEY. And next, I introduced him as Chairman Massey, but actually Vice Chairman, Johnny Winfield, filling in for Chairman Massey.
STATEMENT OF JOHNNY WINFIELD, VICE CHAIRMAN, WHITE MOUNTAIN APACHE TRIBE; ACCOMPANIED BY ANEVA YAZZIE, MANAGEMENT CONSULTANT, WHITE MOUNTAIN APACHE HOUSING AUTHORITY
Mr. WINFIELD. Good afternoon. My name is Johnny Winfield. I represent the White Mountain Apache Tribe as the vice chairman. I would like to welcome each and every one of you, the Subcommittee on Housing and Community Development, to the Navajo Nation within the State of Arizona within Indian country.
I'm here on behalf of the White Mountain tribal chairman, Dallas Massey, who is unable to make it due to other commitment, so I'm going to follow through with what he brought to my attention.
Page 18 PREV PAGE TOP OF DOC
We are knowledgeable of new housing legislation, NAHASDA, that was enacted in 1996. Under that new federal housing program for Native Americans, we had designated our housing authority, the White Mountain Apache Tribal Authority, as a Tribal Designated Housing Entity and we have been very successful in carrying out our effort of housing opportunity for our tribal members. I believe we are at the forefront of tribes across the country to take full advantage of leveraging opportunity with willing financial partners that have opened under this new Indian housing law.
We have accomplished a lot of first ever initiatives, such as:
One, issuing a tax exempt bond in the amount of $25 million to build 250 homes, which has increased to 317 due to a cost savings measure in our construction method. This bond issuance was only possible through the collateralization of HUD's Section 184 loan program on each of the construction mortgage loans executed with our lending institution, Bank One. We call this lending purchase mortgage-based homeownership program Apache Dawn.
Two, since the creation of this housing authority back in 1963, for the first time under the Apache Dawn, we used our own tribal resource for material, Fort Apache Timber Company, Fort Apache Timber Company Home Center, White Mountain Apache Tribe Public Works and contractors utilizing our tribal employees in significant numbers for the construction of homes.
Item three, we were also the first tribe in Arizona to receive a low interest loan to address our infrastructure needs from the Arizona Water Infrastructure Financial Authority, WIFA, in the amount of $5 million. This was a true tri-governmental relationship between our tribes, state and federal agencies. WIFA had to qualify as an approved lender under HUD's Title VI Loan Guarantee Program in order to minimize this risk and make the loan possible for our tribe.
Since the creation of the housing department under the State of Arizona by our own good friend, Janet Napolitano, who is the first governor who has shown a true concern and is proactive in addressing our tribal housing situation in the State of Arizona, we were the first tribe to partner with their office in addressing our badly needed rehab needs for our housing units through both their tax credit and state housing fund programs. We are fortunate to have a very strong state government relationship in all our housing endeavors.
Page 19 PREV PAGE TOP OF DOC
In addition to these first ever initiatives, the White Mountain Apache Housing Authority has aggressively applied for HUD and other outside grant sources that have enabled a total of over $80 million to be infused into our tribal communities since 1998. This is—this has proved that the new Indian housing law can work for tribes with a capable and committed team on the housing staff, expert consultants combined with strong tribal and community support.
We have also received strong support from both our local and national HUD office. As stated above, we have had a very successful relationship with Phoenix, Denver, and headquarter administration of the Native American Housing Program. The new Indian housing law allows the opportunity to work with other funding agencies to address rehab and/or new construction needs, including costly offsite infrastructure systems.
In working with other agencies, we have encountered several obstacles in our attempt to increase the assistance needed for our tribal members. This includes:
One, partnership with the Federal Home Loan Bank's Affordable Housing Program. We have encountered several program differences for delivery assistance to Native American communities. This includes the unique need to address the trust land issue in the execution of regulatory agreements, the low income threshold requirement under the NAHASDA, unique BIA land issues, and risk issues for future banking relationships.
In partner with the U.S. Department of Health and Human Service's Indian Health Service technical arm, we have encountered one major regulatory prohibition that hinders assistance for tribal members. The tribes are prohibited from obtaining assistance for homes if the homes are receiving assistance from HUD. Since the resources for funding are both federal assistance, IHS statute and program regulation restrictions should be removed to allow its use in a coordinating manner at the local level or reallocate such funds to a national level from IHS to HUD to address infrastructure needs from one federal funding source.
Page 20 PREV PAGE TOP OF DOC
Even through this is a sensitive issue to those tribes that are not obligated to their funds in a timely fashion and possible to be subject to recapture the funds and returned to the U.S. Treasury; rather, a mechanized need to be put in place to reallocate those funds to tribes that have proven track record of effective address of their homes need to be timely manner. While this may not be uniformly addressed, each tribe's respective needs it will be addressed in the overall backlog housing needs for the tribes in aggregate from the Congressional point of view and all funding would still be directed at the address of the vast problem rather than returning to the general fund back to the Treasury, not addressing the housing problem.
A means of stable employment is necessary for tribal members in order to make housing payables. This leads to the need for the economic development for sustaining tribal communities and to become truly self-determined. Therefore, the program regulations should be able to allow economic development as an eligible activity as it relates to affordable homes.
This should not be considered an exhaustive list but are those that we have seen as obstacles and as experienced by the White Mountain Apache Tribal Housing Authority that needs immediate attention by responsible federal officials for the sake of all tribes. We stand ready to address and work cooperatively towards working solutions to enable all tribes to better address and solve their housing need.
We have used the USDA Agriculture Rural Development Program to receive combination grant and loan funding to address our infrastructure needs. These funds are supplemental to NAHASDA and WIFA funds as described above to provide the construction of regional water and wastewater treatment facility at Hondah. This is greatly increasing in capacity, accommodating the planned expanding of our homes at Hondah home sites and Apache Dawn home funding under NAHASDA. The White Mountain Apache Tribal Housing Authority also plans to utilize the USDA's Rural Housing Service, rural development housing service in the near future to expand the home assistance serving our tribe.
Page 21 PREV PAGE TOP OF DOC
All of our land is trust land. With the assistance of the federal loan guaranteed programs offered under HUD Section 184, Title VI provide NAHASDA, we are able to bridge the housing need for both subsidized and mortgage-based programs with approval of BIA land leases for two consecutive period of 25 years for our tribal members. The maximum lease period of 50 years specified in the NAHASDA statute needs to be changed to allow for even longer period of time.
Steps that can be taken to increase private market initiative is to maintain and to increase the level of federal loan authority under the two HUD loan grant guarantee programs that have worked successfully for our tribe, namely the Section 184, Title VI program. Eligibility criteria should also be expanded to fill the pocket of needs of those families that are not low income which is a growing segment of the tribal population and cannot secure mortgage financing on trust land without some form of many federal loan guarantee. Education——
Chairman NEY. I'm sorry. Not to interrupt you, but time has expired.
Mr. WINFIELD. Thank you.
Chairman NEY. Wrap it up.
Mr. WINFIELD. Wrap it up?
Chairman NEY. Yes.
Mr. WINFIELD. Education about these programs should also continue to both tribes and the private financial sector on how these programs work. Heavy education should also be continued for Native American on benefits of true homeownership as well as financial literate education. And this is the statement that was brought to my attention from the tribal chairman. Thank you very much.
Chairman NEY. Thank you. We will have the rest of it in the record.
Page 22 PREV PAGE TOP OF DOC
[The prepared statement of Johnny Winfield can be found on page 199 in the appendix.]
Chairman NEY. Again, I'm just trying to hold it to five minutes so we can get some questions in. Thank you. President Shirley.
STATEMENT OF JOE SHIRLEY, JR., PRESIDENT, NAVAJO NATION ACCOMPANIED BY CHESTER CARL, CHIEF EXECUTIVE OFFICER, NAVAJO HOUSING AUTHORITY
Mr. SHIRLEY. Thank you, Mr. Chairman, members of the committee.
I feel very honored to share your presence with us here on Navajo land and I want to welcome you. And thank you, Congressman Renzi, for doing everything you could to make this hearing possible. You have done much and I'm looking forward to continue to work with you.
Mr. RENZI. Thank you, Mr. President.
Mr. SHIRLEY. With me here today is Chester Carl, who will help answer questions maybe afterwards.
Gentlemen, Ms. Waters, I'm Joe Shirley, Jr., President of the Navajo Nation. There are a myriad of challenges facing us related to housing, related to Navajos, sovereign Native Americans, but I want to zero in on a particular issue at this time because of the limited time and will share the rest with you in written testimony.
The Navajo Nation and the Navajo Housing Authority are deeply concerned that a recent HUD decision will reduce Indian Housing Block Grants for the Navajo Housing Authority by over $5 million. HUD's policy determination, made without consulting with Indian tribes as mandated by federal law, subverts the letter, intent and spirit of NAHASDA and will prevent the Navajo Nation and many other tribal governments on Indian reservations throughout the country from serving the critical housing needs of our people.
These drastic reductions are caused by HUD's decision to use for the first time the so-called multi-race census data in the Indian Housing Block Grant formula. As you know, the 2000 census allowed those responding to questions on race and ethnicity to check one or more of the listed race categories. In 1990, when only a single race category could be selected, almost two million people checked the American Indian and Alaskan Native category. Yet, in 2000, over four million identified themselves either as American Indian and Alaskan Native alone or as American Indian and Alaskan Native in combination with one or more other races. This amounts to an incredible 110 percent American Indian and Alaskan Native population growth rate compared to the U.S. Population growth rate of only 13 percent.
Page 23 PREV PAGE TOP OF DOC
In 2000, those who identified themselves as American Indian and Alaskan Native alone was 2.5 million, a figure much more realistic and closer to the population growth rate nationally. Moreover, studies have shown that a substantial majority of those who indicated they are American Indian and Alaskan Native and another race would have selected a non-American Indian and Alaskan Native race if they had been asked to designate only one category. Yet, despite the fact that American Indian and Alaskan Native alone data more accurately reflects the true Indian population under the NAHASDA definition of Indian as any person who is a member of an Indian tribe, HUD has nevertheless mandated the use of the multi-race data in the Indian Housing Block Grants formula.
When the multi-race data is plugged into that formula, large sums of housing funds are shifted away from areas with populations that self-identify as American Indian and Alaskan Native alone, which tend to be reservation lands, to areas of populations that self-identified as American Indian and Alaskan Native in combination with other races, which tend to be more urbanized, non-reservation areas.
Although Congress intended NAHASDA to help tribes and their members improve their housing ambitions and socioeconomic status, HUD's decision disregards the bedrock principle of self-determination and self-governance of the tribe's rights to determine its members.
HUD's own preliminary estimates using multi-race data reveal that with a reduction of over $5 million, the Navajo Nation will suffer the largest single cuts in funding, vital funds that will be taken away from Navajo families desperately in need of basic housing.
Other tribes located right here in Arizona will also face severe reductions. For example, the Tohono O'Odham tribe will lose upwards of $743 million, an 11 percent reduction. The Hopi tribe will lose over $613 million, a 17 percent reduction. The Salt River Pima will lose over $738 million, a 24 percent reduction. And the Chochiti will lose $111,820, a 35 percent reduction.
Page 24 PREV PAGE TOP OF DOC
Congress must not allow this untenable and unfair result to stand. We respectfully request that HUD use tribal enrollment figures as the best indication of who are Indian under, and entitled to the benefits of, NAHASDA or, in the alternative, use the 2000 Census American Indian and Alaskan Native alone count as most compliant within the NAHASDA definition of Indian and most reflective of NAHASDA's intents and purposes.
I might just add also that we are trying our best, Chairman Ney, to defrost the Bennett Freeze. I think you've seen a couple houses in that area, and it's very undeveloped. We had to go through a lot of red tape and bureaucracy to get in any infrastructure. Hopefully, in the near future, we will overcome that. And if we do that, we will need all the help we can get putting in infrastructure and housing and the like. Thank you very much.
Chairman NEY. Thank you, President Shirley.
[The prepared statement of Joe Shirley Jr. can be found on page 168 in the appendix.]
Chairman NEY. We will move on to Chief Smith.
STATEMENT OF CHADWICK SMITH, PRINCIPAL CHIEF, CHEROKEE NATION OF OKLAHOMA
Mr. SMITH. Good afternoon, Chairman, and honorable members of the committee. My name is Chad Smith, and I am the principal chief of the Cherokee Nation. We are located in eastern Oklahoma.
One of the highlights of being principal chief is being able to visit a remote location hidden in the hills of eastern Oklahoma. Even before you are able to see what is happening, you can hear hammering, sawing and humming of generators, all interspersed with the sound of the Cherokee language. You hear the laughter of children playing in the nearby woods. These are sounds of a house being built in a Cherokee community by a Cherokee community.
This is a pilot project. Houses are being built with materials purchased by Cherokee Nation funds using NAHASDA. Community members provide the labor. Instruction and supervision is provided by the Cherokee Nation through USDA funds as well as tribal funds. A flexible, stable funding source such as NAHASDA allows the Cherokee Nation to determine what works best for our members. It is very important to put our common members in a situation where they can rebuild their communities, acquire new capacities and expand their capabilities to help themselves.
Page 25 PREV PAGE TOP OF DOC
The leadership of the Cherokee Nation can, quote, make ourselves useful, by thinking strategically about how to use our resources in a manner that enhances opportunities for tribal citizens to help themselves. By thinking in a broader context, the Cherokee Nation seeks to build people, not just physical structures.
Let me share with you one example. One of our self-help participants is a full blood Cherokee in his mid 40s who has caught chickens at a processing plant all of his life. This is back-breaking work that is demanding and often physically debilitating through the years. This man often puts eight to ten hours of work in each day catching chickens, then he helps build houses in Cherokee communities for four to six hours on the same day. He just learned how to use a tape measure and thinks he may want to build houses for a living. He wants to volunteer to assist and to teach other Cherokees what he has learned.
The Cherokee Nation would like to see more instances of this to make our limited funding go further and create an epidemic of this type of excitement and activity and self-help.
The Cherokee Nation has used NAHASDA in many other strategic ways to promote capacity building and housing opportunities. We fund Individual Development Accounts, or IDAs, that require matching the private savings of individuals dollar for dollar. We also provide materials only projects for low income individuals who need to rehabilitate their privately-owned house. We have trained and certified staff to eliminate lead-based hazards, lead-based paint hazards in the housing of low income Indians. We are utilizing a Rural Housing and Economic Development grant to establish a structural insulated panel, or SIT panel, manufacturing facility. All these initiatives and others will allow the Cherokee Nation to house more of the neediest.
The Cherokee Nation has leveraged several resources, such as the Low Income Housing Tax Credit, to build several projects and we are the single largest user of the loan guarantees under Title VI of NAHASDA. We plan to aggressively market not only Section 184 loan guarantees, but also USDA's 502 program to our citizens.
Page 26 PREV PAGE TOP OF DOC
There are some issues that, if resolved, would better enable the Cherokee Nation to strategically address the housing needs of our members. These issues include improving or coordinating processes to allocate Indian Health Service Sanitation Facilities Construction funding; standardizing the environmental, or NEPA, process across federal agencies, and streamlining the residential leasing procedures through the Bureau of Indian Affairs. Stable, consistent funding and processes would allow us to more strategically use the very limited resources available.
Another example of more effective utilization of resources is the Indian Community Block Grant. We could better plan housing, infrastructure development and economic opportunities if we received funding through an allocation formula like large cities do under the public CDBG or, for that matter, NAHASDA.
I would like to also comment on NAHASDA formal allocation for funding and the use of the U.S. Census. The Cherokee Nation citizens and other Indians in our area are undercounted by whatever census classification or count, whether it be by single race or multiple race. However, Census information at this point is the only available information collected systematically in which we have confidence and the use of which has been determined through the negotiated rulemaking between tribes and the Department of Housing and Urban Development. The use of census information should be used as long as it approximates tribal citizenship. We believe that any other use of Census classifications, such as a restriction to only using a single race, becomes purely a race-based policy rather than a proxy or an index for citizenship in federally recognized tribes when the effect is to artificially underestimate the amounts of tribal citizens in an area. The use of the multiple-race classification from the U.S. Census results in a more accurate estimate of the tribal citizens in our area, even though that number itself is undercounted.
We support any system—I want to reiterate this—we support any system that is verifiable and reliable that best reflects the number of citizens of federally recognized tribes and Alaska Natives for specific formula areas.
Page 27 PREV PAGE TOP OF DOC
In closing, I would like to express our appreciation for the contribution of Congress, the attention of this committee. What you have done for the Cherokee Nation and other Indian tribes and your support of Indian Nation programs and self-government and its self-determination are very valuable for our continued existence and our efforts to regain the dignity and status that we once historically held. Thank you very much.
Chairman NEY. Thank you, Chief.
[The prepared statement of Chadwick Smith can be found on page 174 in the appendix.]
Chairman NEY. And Chairman Taylor.
STATEMENT OF WAYNE TAYLOR, JR., CHAIRMAN, HOPI TRIBE
Mr. TAYLOR. Chairman Ney, honorable members of the subcommittee, welcome, and thank you so much for coming to visit our homeland. My name is Wayne Taylor, Jr., and I am Chairman of the Hopi Tribe.
My remarks today focus on the need to increase the opportunities for Hopi people to live in quality and affordable housing and to improve our participation under NAHASDA. In addition, I will offer my thoughts on some of the critical legislative and policy issues related to housing that require the attention of our Congressional delegation and Congress generally.
By way of background, the Hopi people and their ancestors have lived in northern Arizona and the southwest in general for many thousands of years. Our ancestors' once thriving but now abandoned villages can be found throughout portions of Arizona, New Mexico, Colorado and Utah. In 1882, the United States set aside a small portion of our former ancestral home as a reservation intended as a permanent home and abiding place for Hopi. The Hopi village of Oraibi was a bustling community many centuries before the coming of the European explorers and today is recognized as the oldest continuously inhabited community in North America.
Page 28 PREV PAGE TOP OF DOC
Our reservation, some 1.6 million acres of land, is situated in the middle of the Arizona portion of the Navajo Reservation. The 12 villages of the Hopi reservation are within a two-hour drive of the non-Indian border towns of Flagstaff, Winslow and Holbrook. We are cross-town neighbors to the Navajo community of Tuba City. According to the most recent population data, the Hopi tribe has an on-reservation population of 8,000 tribal members with another 4,000 members living off the reservation. The average household income for families in the Hopi communities is $26,553, which is almost six thousand, almost seven thousand less than the income for neighboring non-Indian communities in Coconino and Navajo counties.
The Hopi have a long history of housing development. As settled village dwellers, the Hopi built and maintained community development projects throughout thousands of years of their history preceding the founding of the United States. Hopi communities were designed and constructed not simply as shelters from the elements, but rather as places of safety and social cohesion. The Hopi village was a place where individual families could live comfortably, practice their agrarian economy, attend to their religious obligations and build a society that took care of their community members and offered them a clear direction toward future security and prosperity.
Anyone visiting the Hopi villages today will see Hopi homes built by Hopi hands that have been passed down through family and clan inheritance for many hundreds of years. Generations of Hopi people have literally been born, raised, and passed on in Hopi housing built by their ancestors.
Unfortunately, our ability to keep pace with the need of new housing through modern housing programs has not come close to matching the ingenuity and adaptability of our ancestors. Hopi people simply do not have sufficient quality and affordable housing to meet existing and projected needs. Housing is currently one of the greatest challenges facing the Hopi people. Housing development faces a number of challenges. Finding suitable locations for new housing can be extremely difficult because of our system of village and clan land holdings that restrict the building of new homes in close proximity to the historic villages and reserves much of the land for agriculture and religious practices. Of course, this is a matter within the political control of the Hopi Tribe and their villages and will have to be worked out according to those political processes.
Page 29 PREV PAGE TOP OF DOC
Our solution is to move new housing into areas not subject to such restrictions. However, in such locations, we face the difficulty of developing basic infrastructure, including water, sewer, electricity and roads and the lack of funds for construction activity. As our Hopi population grows and the demand for housing increases, we fear these problems will only get worse.
The statistics related to affordable housing for the Hopi Tribe are disturbing and discouraging. According to the recent surveys conducted by the Hopi Tribal Housing Authority, there are 2,485 families living on the Hopi Reservation, of which 2,043 are low income; 1,215 Hopi families live in substandard housing units, and nearly 691 families live in overcrowded conditions, usually sharing the same household with other family members.
The same survey shows that 1,116 owner-occupied units and 137 renter-occupied units under the HUD housing program, for total units of 1,253. The statistics for these 1,253 units are startling but not surprising. Of the 1,253 units, 436 are in standard condition; 337 require minor rehabilitation; 439 require substantial rehabilitation, 29 are dilapidated and require replacement; and ten are of unknown structural condition. Financial assistance is badly needed to repair and rehabilitate 773 units and to rebuild 29 new units.
The above statistics apply only to the Housing Authority Indian Housing Plan for 2004. How am I doing on time?
Mr. RENZI. Wrap it up.
Mr. TAYLOR. Okay. What are we doing about the current situation? A number of years ago, the Hopi Tribal Council approved a comprehensive values plan, and within this plan designed five new community sites to be located on the Hopi partition lands. One such site is the Tawaovi community. The new community of Tawaovi is located 15 miles north of Second Mesa along BIA Route 4, also know as Turquoise Trail. The Tawaovi community provides for mixed-use housing, commercial and industrial development, and other government facilities. We are working with the local housing authority to plan new housing for these communities. We need Congressional support to make the plans a reality.
Page 30 PREV PAGE TOP OF DOC
I have some recommended legislative and policy matters that we would like to have your subcommittee in Congress assist us with. They have been generally addressed already, so I will leave that as part of my written record.
Chairman NEY. It will be accepted without objection.
Mr. TAYLOR. Thank you.
Chairman NEY. Thank you, Chairman.
[The prepared statement of Wayne Taylor Jr., can be found on page 193 in the appendix.]
Chairman NEY. I want to thank all of the panelists.
Let me ask our ranking member, Ms. Waters, I'd like to ask a question about something we saw today. It's a generic question on behalf of us.
I saw a hogan, and there was a power line. I could visibly see that power line, and the line was there, but it can't be connected. And it's due to a——
Mr. RENZI. Arizona Public Service.
Chairman NEY. Arizona Public Service, and then I think the Bennett Freeze. So the question I want to ask is, in my mind, what benefit is it when you can stand and see that power line and not be hooked up? It's not a matter of money, in my opinion. Let's say it costs five hundred dollars to hook it up. We say here is the five hundred, but it can't be hooked up because of the Bennett Freeze? Is that correct? Anybody like to answer that?
Mr. TAYLOR. Mr. Chairman, Wayne Taylor, Hopi Tribe Chairman.
What we are dealing with in certain parts of this area here are what is called the Bennett Freeze areas. This is currently in litigation and has been the subject of many court battles. It has been appealed to the Ninth Circuit and has been remanded now to the lower district court in Phoenix and we are awaiting some kind of a decision by the judge in that case. Unfortunately, that has been there in the courts for quite a long period of time.
Page 31 PREV PAGE TOP OF DOC
I would like to commend the leadership for the Navajo Nation. Starting with President Kelsey Begay, we began to have negotiations to try to settle this land issue so that we can unfreeze the so-called Bennett Freeze. When President Joe Shirley became the next President, we continued these mediations, and I am happy to report that we have now reached an agreement in principle on a compact that we will now be taking to Washington D.C. Where we hope that the Department of Interior would also sign off on this particular compact.
We then will have a product that we can take to our respective tribal councils for ratification. This will address the unfortunate delays in getting people to get serviced.
Chairman NEY. So does the Bennett Freeze prevent that power line from being hooked up today, or is it an arrangement you have to make between the two nations or between the two tribes?
Mr. TAYLOR. What happens is any kind of development has to get—of course, it begins with the Navajo Nation. They go through their review process. Once that's concluded, then it goes to the Hopi Tribe because it's those lands that we have litigation over so we have to concur on these developments. And the development has to—the permit for these developments have to come through the Hopi Tribe. We have to concur before development can begin.
And there is a process in place for that, and I would say that 98 percent of those requests that come to the Hopi Tribe are approved. It's just that it's a lengthy process.
Chairman NEY. One thing that confused me. We reviewed the Bennett Freeze, which in 1961, Bennett was in Congress. But, for example, this was a unit that—ICE did a real good job of building this, you know, and helping the family. But if we are talking about development, that was built so—the actual home was built, so it's hard for me to understand why the line couldn't be hooked up because the actual home was built. Is there also a problem with Arizona Public, or power supplies? Is that another side? Let me try to make it more clear. I'm probably not making it clear enough.
Page 32 PREV PAGE TOP OF DOC
If it's a matter of development, why could the actual home be built but why couldn't the line come 20 feet into the home? If it's a matter of development of the Bennett Freeze, then the home shouldn't have been built. I'm just trying to rationalize it. I'm not blaming anybody, I'm just trying to rationalize it in my mind.
Mr. SHIRLEY. Chairman, members of the committee. One of the things that also is going on besides what Chairman Taylor has alluded to, the bureaucracy in getting power to homes because of the Bennett Freeze, there is also jurisdiction regarding power companies. We have our own.
The Navajo Nation has its——
Chairman NEY. The jurisdiction of what?
Mr. SHIRLEY. Power companies.
Chairman NEY. Power companies?
Mr. SHIRLEY. Yes. Arizona Public Service is an entity that's outside Navajo land. The Navajo Tribal Utility Authority is the tribe's own power source. It hooks up electricity, power, water, sewer to homes. So, because of the Bennett Freeze, we have to also negotiate on the cost sometimes. And sometimes APS could come in and sometimes NTUA could come in for whatever reason. So that's one of the reasons why.
Chairman NEY. Thank you. My time is up. I will yield to our ranking member.
Ms. WATERS. Thank you very much, Mr. Chairman.
I would like to thank our panelists for being here today. I'm particularly pleased to see and meet the leadership of not only the Navajo, but the Hopi.
And I am looking for some guidance. I need you to tell this panel what your priority suggestions would be for helping to remove some of the barriers, whether that is with lending agencies, Congress cutbacks, administration cutbacks, or with tribal court cases or the Bennett Freeze that's been talked about.
Page 33 PREV PAGE TOP OF DOC
Now, as I understand—let me just backtrack a little bit. As I understand, it appears that the courts—the Bennett Freeze settlement is now in the hands of the court.
Mr. TAYLOR. Correct.
Ms. WATERS. But you also indicated that the tribes were getting together in addition to what the court is doing.
Should you reach an agreement or settlement prior to the court finishing its work, would that take precedence over the courts and then the court would no longer have to be involved in this decision? Mr. Taylor
Mr. SHIRLEY. It is my understanding, Miss Waters, the Hopi Nation, working with the Navajo Nation, is trying to come to an agreement where we are going to put an end to the litigation. And once we reach agreement, hopefully, for everybody, that will happen. And then from there, infrastructure and housing will start going into Bennett Freeze.
Ms. WATERS. So you're saying that a settlement between the tribes would supersede the court work that's being done now so you may not have to wait for another year or six months on a court decision? Is that correct?
Mr. TAYLOR. Congresswoman Waters, the case is in the lower district court, as I mentioned, and we have been waiting for the judge to make some kind of a ruling on this particular case, but that, unfortunately, has not been forthcoming for quite a long time.
So that was what prompted the two tribes to begin to talk. And what we have done is we have asked the courts to assist us in this effort, and they have assigned one of the judges from the Ninth Circuit court and so that judge is helping to mediate between the two parties.
So once the—all the parties have signed on to the agreement, then that will end this case.
Page 34 PREV PAGE TOP OF DOC
Ms. WATERS. That's great and that's very encouraging. We visited a location today where an elderly woman was living in a very substandard housing situation because her home had burned down and she could not replace it because of the dispute. So this would be wonderful if the tribes can reach an agreement, and we would certainly encourage, encourage, encourage you to do that. And I suppose once that's done, that would help to move the issues of housing development in some very profound ways.
If I have time, Mr. Chairman, the next thing I want to know is what can we do, what do you suggest that we do with the financial services community? What would you say to banks and financial institutions about providing loans and mortgages to families when they say that they can't do it or it's very difficult for them to do it because there's a lack of ownership by individual families to own trust land and there is not a lot of income by Indian families for collateral? Do you have any suggestions or any ideas about what we can do? What could we say to those financial institutions?
Mr. SHIRLEY. Chairman and Ms. Waters, let me defer that question to my technical person, who is also the chief executive officer of the Navajo Housing Authority, Chester Carl, to help me answer that question.
Ms. WATERS. Yes. Please identify yourself for the record.
Mr. CARL. Thank you very much, Congresswoman Waters and Chairman Ney, and, of course, Congressman Renzi and Congressman Matheson. Thank you for the opportunity to ask these questions.
One of the barriers that we see is related to possibly the enforcement of the Community Reinvestment Act. Currently, on the Navajo Nation, we only have five banking facilities, while on the streets of Washington D.C., you'll find five banks in one block. And because of the lack of investments, Navajo opportunities of every American dream to establish homeownership is not possible.
Page 35 PREV PAGE TOP OF DOC
So, because of those challenges that we face, a lot of times banks are able to post an acceptable score in using other neighboring communities on how they invest their money in Indian country. So as a committee empowered with that authority, we would like for you to look at how community reinvestment works in Indian country.
The second part of that is there's been a lot of discussion on Section 184. When Section 184 was implemented, it was a dream to allow opportunities to Native Americans who were not at the acceptable level for conventional loan programming. Somewhere along the way through the bureaucratic process, it became where you almost had to be goldplated in order to get a loan through the Section 184 program. When we started the program, the approval was done at the field offices of the Native American program, and eventually that got centralized to the national office and it became problematic, so it hasn't been at a level where it should be. So the recommendation would be possibly move it back down to the field offices because we work with those offices hand-in-hand and one-on-one, and we will try to work with those programs as well.
The third part of that is the BIA. You noted that the BIA is not at the table. Part of that is a recommendation for procedures, and there is a commission that's been established called the Land Title Commission by Congress, and if we could fast track that and have that commission go into effect so we can start to get some of these issues resolved, then, through sovereign rights of tribes, to establish a title plan with the tribe and BIA for those functions.
Ms. WATERS. Thank you very much. Those are very concrete recommendations and I'm sure that our members of Congress representing the area can move on those kinds of recommendations to remove some of these barriers. And of course, if they don't, their friends will nudge them. All right. Thank you.
Chairman NEY. Thank you. Gentleman from Arizona, Mr. Renzi.
Mr. RENZI. Thank you, Mr. Chairman.
Chairman Kitcheyen, in your testimony, you spoke about infrastructure needs. You also mentioned the fact that if we build 125 homes a year for the next ten years, we would only begin to meet the current housing need.
Page 36 PREV PAGE TOP OF DOC
What is the number one impediment at San Carlos Apache that doesn't allow the, this generation to purchase homes? What is the number one impediment you're finding?
Ms. KITCHEYEN. Currently, the number one barrier is the fact that over a year ago, the tribe submitted to HUD environmental reviews. And because they are so slow in doing their job, we are two years behind in spending our dollars.
Mr. RENZI. Tell me a little bit about that submittal, please. It was to the HUD for environmental review.
Ms. KITCHEYEN. Okay. There's two projects, Congressman, that we did. And I'm not sure how many homes we're talking about, but I'm sure that, I think it is about two housing units, so that would be four, and they are behind, like I said. And right now that's the current barrier. We need to use those dollars, and we just don't, you know, we waited—and what we would need is for the government to give more leverage to the southwest office in Phoenix so they can have the additional support to speed up that process.
Mr. RENZI. Thank you. We have officials here on the second panel who will be testifying. He is the Under Secretary for Public and Indian Housing, and I want to be sure that Michael, when he does come up, heard your words, particularly the fact that you have two projects that are ready to go, we just need a little bit of help.
President Shirley, you also spoke and devoted much of your testimony towards, also, a need at HUD. What would you like to see—and, again, forgive me for asking you to repeat, but just encapsulate as it relates to the census issue. What would you like to see the solution being? You can speak directly to the HUD people who are here listening to your voice right now.
Mr. SHIRLEY. My testimony surrounds the multi-race, the use of the multi-race data, and we feel that it's outside of federal law. I guess what I would like to see is getting back to federal law where you work with tribal members to get who is a member of tribes, who is supposed to be benefitting from the allocations for housing from the federal government. That would be my recommendation.
Page 37 PREV PAGE TOP OF DOC
Mr. RENZI. I also want to call attention and thank you for your leadership, along with Chairman Taylor, on the Bennett Freeze issue. I know no one together has worked as tireless as you two guys have to come up with what is on the verge, I believe, of a beautiful compromise.
Finally—yes. That deserves some recognition. It really does.
President Shirley, you have been looking for creative ways to build your own payroll. Monies are being spent on surrounding communities. Can you quickly help us understand what we need to do in order for that dollar to stay on Navajo lands so that it will be recycled and how that would affect your people.
Mr. SHIRLEY. We need economic growth returned. And right now, the Navajo Nation has as one of its initiatives to develop a small business sector of Navajo Nation economy, and that would involve bringing in big boxes like Wal-Mart and Super Target to create jobs, create additional revenues. If we can create jobs here, that's revenues that will flow within the Navajo land and out of the border towns.
Mr. RENZI. By creating the jobs, you are going to have the ability to borrow and have the credit and ability to lend.
Finally, as far as the White Mountain Apache are involved, sir, thank you for coming and filling in for Chairman Massey. We were able to accomplish together a project that both the governor's office, the State, as well as the federal government, this facility called Apache Dawn. It was one of the first areas where we were able to lend money, to get the Home Loan Bank out of San Francisco, through an Arizona bank, to lend money to you all.
And I think the issue came down to—obviously, traditional lenders won't lend because of the sovereign land. They won't attach collateral to sovereign land. This is one of the big issues as it relates to the traditional lending arms of a commercial facility looking at attaching to sovereign land. They don't do it.
Page 38 PREV PAGE TOP OF DOC
Can you quickly tell the people here how you were able to overcome that obstacle and how this model has become a model for, I believe, many of the Native American people around the nation?
Mr. WINFIELD. One of the things I would like to express to the committee here is that I think White Mountain Apache Tribe has been really looking forward for some great opportunity, and I think that they came when the national President expressed about these kind of projects, and we got into the picture and we entered, got ourself into it to the point where we decided to go after some of these projects. So I have a young lady from the housing program with me so I will let her express, explain this thing. I would like to call Miss Yazzie to come over.
Mr. RENZI. State your name for the record, please.
Ms. YAZZIE. My name is Aneva Yazzie. I'm a management consultant to the White Mountain Apache Housing Authority.
In response to your question, Congressman, what we have utilized in order to make this whole transaction possible was to take advantage of HUD's federal loan guarantee programs offer under the Section 184 program, as well as HUD's Title VI loan guarantee program to overcome—to minimize financial institutions' risk on reservation land for the White Mountain Apache Tribe.
So in that regard, we were able to put in the underwriting with the various bankers, Bank One, Countrywide Home Loans for the Apache Dawn program, and then the WIFA state agency as well is a qualified lender.
Mr. RENZI. So to get those financial organizations to lend money to the Apache Nation, and they can't collateralize the land, did we post a bond to collateralize? What collateral did you all provide to make them comfortable with lending the half million dollars you got in order to finish the infrastructure?
Page 39 PREV PAGE TOP OF DOC
Ms. YAZZIE. What collateralized under that bond underwriting process was the Section 184 loan program. Let me explain that process real quickly and as simply as I can.
What we have done is we have utilized HUD's 184 loan program to get the construction loan for each home that was built with Bank One. I'll name the financial institution that we partnered with. Bank One then, in turn, sold the mortgage loan to a loan servicer, Countrywide Home Loans. Countrywide Home Loans then, in turn, pooled those loans into a Ginnie Mae security. The Ginnie Mae security then was sold to the bond trustee. In this case, the bonds were sold, which they held the notes to pay the investors.
Mr. RENZI. So that creative financial instrument was then able to allow and effectuate how many homes at Apache Dawn?
Ms. YAZZIE. We initially planned 250, but we are building now 317 homes for $25 million.
Mr. RENZI. 317 homes, new homes, as a result of this creative financing.
Mr. Chairman, I see my time is up. I want to thank you very much. Chairman Taylor, I didn't get a chance to ask my question of you, but we'll talk later.
Thank you, Mr. Chairman.
Chairman NEY. Thank you. The gentleman from Utah.
Mr. MATHESON. Thank you, Mr. Chairman.
I have to say this panel, in reviewing their testimony, has offered a number of specific recommendations. I'm very impressed with the quality of the testimony. I think it gives the committee a lot to cue on and consider. I've sat in on a lot of congressional hearings in my short career, and this is very impressive in terms of your testimony. I appreciate that.
Page 40 PREV PAGE TOP OF DOC
A couple things I wanted to ask about. First of all, there are a number of impediments. There is no simple answer to these issues. We have talked about the problem with the trust and tribal lands, the lack of infrastructure in terms of water, electric, roads. We have talked about working with federal bureaucracies. I understand that there are a number of challenges here, but there is another one we haven't talked about too much, and that's the overall funding level. And, as you know, there is a concern about the budget, consideration going on in Congress right now what the funding levels are going to be and if they are going to be cut or not.
I hear it's going to take, from Mr. Taylor's testimony, 123 years to meet current demands. And I assume that's because right now, based on the funding stream coming to you, that's what it equates to, 123 years to meet your current demand.
Mr. TAYLOR. That's correct, Mr. Congressman.
Mr. MATHESON. He said yes. I'll answer for him.
What I hear from the San Carlos Apache is that you have to build 125 homes a year for ten years? Is that a rate that you are achieving right now with the funding stream you've got.
Ms. KITCHEYEN. No, sir.
Mr. MATHESON. What rate——
Ms. KITCHEYEN. It's not what we're achieving right now. Currently, we have 2,400 families on the reservation that need homes, and 39 percent of families live in substandard housing. And we also have 40 percent of families that live in overcrowded conditions. Ninety-four percent of 3,067 total families are considered low income under NAHASDA.
So what we need is more money committed to build homes on the Indian reservations.
Mr. MATHESON. I don't want to oversimplify. I said at the start of my comments you can't oversimplify. And just more funding is not the only solution here, but I think we need to put that issue out as one of the variables we ought to be talking about. We ought to talk about the fact that the budget considerations in Congress right now, I do not think are adequate. This majority would probably agree with that comment.
Page 41 PREV PAGE TOP OF DOC
I wanted to switch to Chief Smith. You mentioned in your testimony how the Cherokee Nation is the largest user of the loan guarantees under Title VI of NAHASDA, and you're actually looking to expand it because relatively few tribes outside the Cherokee Nation have been taking advantage of this program.
What is it that has allowed you to take advantage of this program in such a successful way.
Mr. SMITH. Probably the necessity of the moment. The funding by the government is very marginal. We have to be very creative and aggressive. We have had the cooperation of the local banks and HUD and other agencies. We borrowed $50 million. We anticipate it's going to build 550, 600 houses. We have already got 400 on the ground.
Mr. MATHESON. I would just suggest it sounds to me there may very well be a lessen to be learned in terms of your relationship, you said with your local banks and whatnot, that other tribes could benefit from as well in terms of this program. I think that's another piece of information not just for us, but for the other folks on the panel. That's a good lesson we could take some advice in.
One more question I have on the trust status of lands and its impediments to moving forward. I read in one of my pieces of material that I was provided to prepare for this meeting that under the current backlog with BIA title searches, that there is a 113-year backlog.
How are you ever going to make progress on your housing shortages with that kind of backlog? Maybe there is no answer to that, quite frankly, but tell me if that's a significant issue in trying to make progress in the housing. And I'm asking no one in particular, but how is that affecting you when you have BIA that slow in doing the title searches?
Mr. SHIRLEY. Right now, that's—you're right, Congressman Matheson, that the BIA just hasn't been there for tribes. In our case, the Navajo Nation, right now we are trying to go through a reorganization, trying to just get at that. They should have gotten that fixed decades ago. And right now it's a big hinderance because of the lack of their progress, or the lack of being there for tribes. And all I can say is that because of them, my gosh, on Navajo land not only are we behind on improving housing, but we are behind by $435 million.
Page 42 PREV PAGE TOP OF DOC
Mr. MATHESON. I know my time is up, but one last question.
In terms of this trust land status and how it's been an impediment to you making progress on the Navajo Nation in terms of housing—and I know this hearing isn't specifically about housing, but is that also affecting you in terms of moving forward, in terms of commercial development and economic development within the Navajo Nation as well?
Mr. SHIRLEY. Yes, it has. In terms of leasing, same with Congressman Renzi addressing collateral and borrowing money, we can't put up the land as collateral to borrow money. That has been one of the biggest impediments.
And, also, because of trust land status, the BIA has to have a hand in every business that is leased. And right now, we are trying to lock up on the loans to get away from that. If we could do our own leasing, I think that would go a long way towards putting economic development on the fast track.
Mr. WINFIELD. I would like to express a few items that were brought up about the need of housing.
Today in the United States there is 500 Indian tribes that the unmet needs are so great that what you brought up, 113 years possibly to catch up. I am involved in the National Budget Tribal Committee with the western region. There is 12 Indian tribes throughout the United States that have been putting the 2006 budget together. And the last two, three weeks ago, we were back in D.C. And sat with the committee and the Department of Interior to start on a financial budget for 2006.
Just to let the public be aware, United States BIA tribal prioritized budget allocation for 2006, we are going to see $253 million budget cut for Indian tribes throughout the United States. For 2005, we experience over $50 million budget cut already. So, through the President of the United States, we have experienced for 2005-2006 a big, major budget cut for Indian country. And we are trying to request for top priorities on the allocation, and on the list, housing is one of them that is a main need. But we are continually seeing ourself being involved in budget cut from Department of Interior.
Page 43 PREV PAGE TOP OF DOC
We don't know how we're going to see ourselves in another so many years, 2007, how our budget will look, but 2006, it hurts to see $253 million budget cut for United States Indian tribes, twelve region, 500 Indian tribes. You are involved in the committee is great for housing. That's the greatest thing. We even put the Housing Improvement Project, they call it HIP, into our top priorities, and that has hit a major cutback already, too, from the BIA.
So talking about HUD here, HIP is getting major cuts and we're hurting. Indian tribes is hurting. Your visit to Navajo Nation, if you visit the whole 500 Indian tribes, you would come to a similar housing need for Indian people. So, you know, I hope that this meeting will come to something very special and major so that one day we can see improvement in Indian country because of great equal housing.
Like the San Carlos Chairwoman said, 2,000 plus need; White Mountain is about, somewhere close, near the same number for our people. Thank you.
Mr. MATHESON. I appreciate that.
Ms. KITCHEYEN. Chairman Ney, if I may, please. I forgot to include this as part of the formal testimony. I'd like to enter it at this time, please.
Chairman NEY. Without objection.
Ms. KITCHEYEN. Thank you.
Chairman NEY. Let me just note in closing this panel that we need to—and, unfortunately, the BIA is not here today. Another thing we need to do between now and then.
I wanted to state that this brings up some issues, and although all of us value housing, these new bits and pieces of things work more correctly when you start to look at other areas where housing is done. For example, in my area, how housing is done now, there's the trust, the deed, a variety of factors.
But it also seems that if monies go through HUD, some monies go through BIA, some monies through veterans, they are going to come to a log jam at every point involved in the BIA. And what is going to happen is, if you want to talk about budgeting, is people in Washington that deal with budgets are going to look at and it say, well, the money was given to the Indian community but they didn't use all of it so, therefore, the money is coming back that wasn't used.
Page 44 PREV PAGE TOP OF DOC
And you can understand that. That's part of the process of thinking. I'm not saying it's always correct, but that's part of the process of thinking.
I think also, I'd like to know as the monies come out where they go, what holds it up. So, obviously, if there is a 113-year log jam, we have a problem with—magically, today, if there was enough money to build homes—getting titles. So I think we need to look at that.
I want to thank the great panel. You have provided a lot of information. You have done a lot of good today. After listening, I understand, and I'm also a little confused, which is not bad. It makes us ask more questions. So I want to thank the panel.
We will move on to the second panel.
[recess.]
Chairman NEY. The hearing will come to order if it could, please. We will now continue with panel two. Please take a seat and we will go on with panel two.
The first person to testify for panel two is Gilbert Gonzalez, Jr. Gilbert Gonzalez, Jr. is the Acting Under Secretary for Rural Development, the U.S. Department of Agriculture. He oversees three agencies—if we can come to order, please, so we can hear the second panel, which is important. Can we come to order. Okay, you're being tougher than Congress is. If we can please come to order.
Mr. Gonzalez oversees three agencies, the Rural Business Cooperative Service, the Rural Utilities Service and the Rural Housing Service that together provides $14 million annually in grants, loans, and technical assistance to rural residents, communities and businesses.
Mr. Gonzalez has been active in banking, housing and economic development efforts in the State of Texas. He was the founding President of the Community Development Loan Fund, a for-profit loan and development corporation, a collaborative effort between the city of San Antonio and 21 banks. The corporation served the credit needs of small minority-owned and women-owned businesses in San Antonio.
Page 45 PREV PAGE TOP OF DOC
Michael Liu is the Assistant Secretary for Public and Indian Housing at the U.S. Department of Housing and Urban Development. He oversees the administration of all public housing, Section 8 rental systems, and Native American programs. Programs are comprised of over 60 percent of the housing budget, over $30 billion.
Prior to his assuming his position at HUD, Mr. Liu served as a managing committee member for the Federal Home Loan Bank of Chicago.
We want to thank both gentleman for coming the distance here to Arizona and we will start with Mr. Gonzalez. Thank you.
STATEMENT OF GILBERT G. GONZALEZ, JR., ACTING UNDERSECRETARY FOR RURAL DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY ED BROWNING, STATE DIRECTOR FOR ARIZONA
Mr. GONZALEZ. Thank you, Chairman Ney, members of the Committee, for the opportunity to discuss how USDA Rural Development is working to support housing opportunities for Native Americans.
But before I proceed, I would like to introduce our State director for Arizona, Eddie Browning, and some of our Native American and housing specialists.
It is personally gratifying for me to lead a team of professionals who work every day with families and communities of various Native American nations and other rural areas and to see and hear how Rural Development programs are impacting the lives of people living in rural areas.
Mr. Chairman, the housing programs authorized by this subcommittee are changing lives and are bringing new hope where it didn't exist before. Rural Development is proud to be part of this effort to increase housing opportunities for Native American families. We are also proud of our commitments, to assist families and communities with overall economic and community development needs.
Page 46 PREV PAGE TOP OF DOC
Rural Development is essentially a large bank with an $86 billion loan portfolio. Our mission is to increase economic opportunity and to improve the quality of life for all rural communities. Our vision is to be a catalyst and to help rural communities to diversify their economics and to increase the flow of capital for homeownership, for entrepreneurship and for infrastructure.
Homeownership is the oldest form of building equity. Rural Development has seen a 20 percent increase in single family housing direct loans to Native Americans over the last three years. In our single family housing guarantee program, we have seen nearly a 50 percent increase.
Supporting existing housing: For example, the families in Le Chee have received repairs and renovations that have brought new ''luxuries'' that we take for granted, such as indoor plumbing, electricity, et cetera.
Other housing opportunities: The White Mountain Apache multi-family housing complex was dedicated last Thursday. It has 22 units that will provide decent, safe, and affordable housing. Displayed to my right is the multi-family project that I am describing. And, obviously, there is a celebration with the Crown Dancers, celebrating the grand opening of that multi-family project.
Entrepreneurship is the economic engine of the U.S. economy.
Rural Development invested $31 million in grants and low interest loans for local revolving loan funds for individual business startups and expansions, and 16 business loan guarantees.
The third leg of economic development for rural areas is infrastructure, and I want to cite one example of what we are doing in rural America. Our broadband program and other technologies are bringing and providing rural communities the ability to compete domestically and globally.
Page 47 PREV PAGE TOP OF DOC
An example of this is our distance learning and telemedicine program and our broadband program. Both bringing economic opportunity and quality of life for those in rural communities. The Wellpinit School District on the Spokane Indian reservation, which serves 450 students K through 12, is one of the examples where we provided assistance. Several years ago, the school district was concerned with dropout rates of the students. Becoming aware that they lacked access to a variety of classes their students needed, they decided they needed to create global classrooms where students have access to educational opportunities worldwide in a job corps training center. They applied for and received a distance learning telemedicine grant from Rural Development to help create these classrooms and training facilities.
Since then, they have received a second distance learning telemedicine grant. This past year, the school district had a 100 percent graduation rate, and all 13 graduates went on to attend college. As a group, they received nearly a half million dollars in scholarships.
Secretary Venaman announced in May 2003 $20 million in grants to support additional advances in technology and broadband. Of that, eight million is going to support Native American ventures, three here in Arizona, for over $760,000.
Coming from the private sector myself and coming to the government, there definitely is a lack of coordination. Successful economic development requires working together, cooperation, coordination with federal and private sector partners, and more importantly with educational partners.
Many who are present here today, Fannie Mae, the banks like Wells Fargo, credit unions and others, Rural Development in the past two and a half years has partnered with HUD, the Small Business Administration, Treasury, CDFI program, Congress, its EDA program and HHS, just to name a few. Banking partners in my, in my experience are capital providers who will bring economic opportunity to rural communities.
Page 48 PREV PAGE TOP OF DOC
Since the beginning of the Bush Administration, we have utilized in Rural Development 40 plus programs administered by Rural Development to invest over $37 billion to support local economic and community development efforts, investments that will improve overall living and economic conditions in rural communities, including communities in the nations represented here today.
Our philosophy is that it's all about local ownership and local control, and when local leaders drive these opportunities, businesses flourish, more families become homeowners, access to health and educational services are improved, and the community as a whole begins to reap the benefits. The Bush Administration has been working hard with American Indian, Alaskan Native tribes, tribal communities, tribal organizations and individuals to provide a greater understanding of the investment opportunities available and assist with guidance on how to access Rural Development financing.
Since the beginning of the Bush Administration, Rural Development has doubled the investments made to Native American communities. In fact, Rural Development has provided nearly a quarter of a billion towards this effort; every year, setting new records and providing financial assistance for housing, community facilities, economic development, and infrastructure.
To my far right is a second set of graphs that shows in 2001, Rural Development provided $177 million in Native American communities. In 2002, we provided $191 million in Native American Communities. In 2003, Rural Development invested about $234 million in rural investments in Native American communities.
Mr. Chairman, your hearing today provides us with an opportunity to share with you and members of the subcommittee ways in which we are administering Rural Development programs to maximize federal resources with other federal, tribal, state and local government and private sector partners, as well as individual investments to supplement the resources provided through Rural Development. This becomes particularly important as we seek to reach more communities and individuals.
Page 49 PREV PAGE TOP OF DOC
I believe we are making progress, but I also believe we must continue to find new ways to do more. I have shared in my written testimony many of the successful efforts we have undertaken over the past three years, particularly in support of Native American families and their communities.
Mr. Chairman, I am happy to answer any questions you may have at this time.
Chairman NEY. Thank you, Mr. Gonzalez.
[The prepared statement of Gilbert G. Gonzalez Jr. can be found on page 86 in the appendix.]
Chairman NEY. Mr. Liu, to you.
STATEMENT OF HON. MICHAEL LIU, ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. LIU. Mr. Chairman, members of the committee, thank you for inviting me to this very important hearing on improving housing for Native Americans. My name is Michael Liu, and I am the Assistant Secretary for Public and Indian Housing, responsible for the management, operation and oversight of HUD's Native American programs. These programs are available to 562 federally recognized Indian tribes. We serve these tribes directly or through their tribally designated housing entities by providing grants and loan guarantees designed to support affordable housing and community and economic development functions.
Tribes are improving housing conditions for their members. This momentum needs to be sustained as we continue to collaborate to create a better living environment for these families.
At the outset, let me reaffirm the Department of Housing and Urban Development's support for the principle of government-to-government relations with federally recognized Indian tribes. HUD is committed to honoring this fundamental precept in our work with American Indians and Alaskan Natives.
Page 50 PREV PAGE TOP OF DOC
Over the seven years that funding has been made available under the Native American Housing Assistance and Self-Determination Act, NAHASDA, over $4.4 billion has been appropriated through HUD to try to get tribally designated housing entities to provide decent, safe and affordable housing throughout Indian country. During this same period, HUD's Indian CDBG program helped address the economic development, infrastructure and community development needs of federally recognized tribes with $485 million in funding.
The Section 184 loan guarantee program, which made its first loan in FY '97 has guaranteed over 1,500 loans worth more than $151 million. The program provides the answer for many families, tribes, and TDHEs who want to obtain home mortgages on trusts or restricted lands, as well as fee lands where there is a service area or area of operation that has been assigned to the tribes. These are places where private market lenders never did business before.
The Title VI program allows the tribe to jump start and enhance its housing programs with federally guaranteed loans. Loan guarantees amounting to $77 million are in place under the Title VI program. I encourage you to review my written testimony which begins by briefly outlining our programs, going over the numbers in the FY '05 budget request, and then discusses an issue that I want to focus in on today: The large credit authority balances and our loan funds and how we are working aggressively with tribes and lenders to get much needed capital into Native American communities for homeownership.
We have two loan guarantee programs that I touched on a moment ago. I would like you to consider them when you think about homeownership. The Section 184 Indian Housing Loan Guarantee Program certainly is in line with one of the administration's highest priorities, and that is creating more homeownership for America. While 70 percent of all American households own their own homes, the number is significantly less for Native Americans, especially for those on the rural trust lands that constitute most Indian reservations.
Section 184 provides a 100 percent guarantee for loans to income eligible and creditworthy Native American families, Indian tribes, or their tribally designated housing entities. Borrowers can purchase, construct, or acquire single-family homes on Indian trust or restricted lands, land within the service area of an IHBG grant recipient, and in other designated Indian areas.
Page 51 PREV PAGE TOP OF DOC
The reluctance of banks and lenders to engage in mortgage lending on trust land prompted creation of the program. It has made homeownership a reality for many Native American families. The 100 percent guarantee, combined with lower closing costs, is attractive to both lenders and borrowers, and if used on trust lands, tribes must have a functioning tribal court system or enter into an agreement with another ajudicatory entity and enact ordinances covering foreclosure, eviction, and related matters.
A direct result of the program is it provides an opportunity for lower and moderate income families living on reservations to move from subsidized housing units and thus freeing up that housing for use by low income families.
The GAO, in 1997, pointed out that from 1992 to 1996, only 92 conventional home mortgage loans were closed on tribal lands. Half of those were on a reservation where the tribe owned the bank. As I mentioned earlier, working with now nearly over 200 lenders, including Wells Fargo, Bank One, US Bank and Washington Mutual, among many others, including small banks, HUD has assisted over 1,500 families with their housing needs by guaranteeing mortgages where others would not.
Section 184 loans have been sold to 18 entities, including two Federal Home Loan banks, Fannie Mae, Freddie Mac, Countrywide, M and T Mortgage, and the Alaska, New Mexico, North and South Dakota state housing finance agencies. Both the Navajo Nation and the White Mountain Apache tribe are active 184 borrowers. They have developed several projects using 184, including Carigan Estates in St. Michaels, which is near Window Rock, and the Apache Dawn project which you have heard about this afternoon.
On the Title VI guarantee program, we are focusing on developing and strengthening reservation economies on a larger scale than just purely housing. Through this experience, we realize that tribes need more access to banks and other financial institutions.
One of the best ways to gain access and foster this relationship is to look at leveraging public funds with private investments and gain greater economic benefit. The Title VI program is available to Indian Housing Block Grant recipients in need of additional funds to engage in affordable housing. A private lender investor provides the loan and the government guarantee ensures repayment in the event of default. If there is a default, the government will seek repayment through the borrower's IHBG funds.
Page 52 PREV PAGE TOP OF DOC
Title VI projects are usually larger, more sophisticated endeavors, using a variety of funding sources, but that is not a program requirement.
Loan guarantee funds and the balances and initiatives. I have directed the Office of Native American Programs to focus attention on how to improve participation in both the 184 and Title VI programs. ONAP will accelerate its outreach to lenders, tribes and TDHEs and more aggressively market the programs. We have significantly increased our loan guarantee training sessions and included segments about them in other trainings and other public events whenever possible. At every available forum, I am educating the public about the programs and inviting whoever is interested to come and talk to HUD about how the program works and how to improve the program to make it more user friendly.
But those millions of dollars will not be available for an unlimited time. I'd like to address just for a moment now the proposed cancellation of these loan programs.
The Department proposes to cancel unused credit subsidy totalling approximately $54 million which has accumulated in the——
Chairman NEY. I'm sorry. What was the amount?
Mr. LIU. $54 million in credit subsidy which has accumulated over the past five years.
These proposed cancellations will enable us to preserve full funding in our '05 budget at the '04 request levels for all Native American programs. The rescissions will not occur until the end of fiscal year '05. Any unused credit subsidy that has been committed by that time will not be rescinded. We ask all here who are interested, we want to use them so that we don't lose them.
In conclusion, sir, HUD respects and supports the progress being made by tribes and their TDHEs in providing affordable housing to Native American communities.
This concludes my remarks, and I stand happy to respond to any questions from you or your members. Thank you.
Page 53 PREV PAGE TOP OF DOC
[The prepared statement of Hon. Michael Liu can be found on page 139 in the appendix.]
Chairman NEY. I want to thank both gentlemen for your testimony.
Let me just point out a couple of things. Of course, much of the Native American land is held in trust—before I do, let me ask one question of Mr. Gonzalez.
When you are assisting with housing, or programs on Indian land, do you also at the end of the day have to have the BIA involved the same way as HUD would?
Mr. GONZALEZ. I've got some of our technical staff, but I would say in perfecting our liens and deeds of trust, the BIA does play a role in terms of title processing.
Chairman NEY. There are issues about the trust, the trust status, the type of economic activity sometimes that can be allowed on Native American lands according to some reports, so I wonder how that affects either one of your abilities.
Also, the inspector general report states several things. It says when projects are assisted by multiple programs, there are conflicting admission requirements. So if you're one department, the veterans perhaps have some money for housing, USDA, HUD, BIA. So this report says when they are, again, assisted by multiple programs, there is conflicting admission requirements. So one would require, you know, more for admission than another.
Also, it goes into the TDHEs. Now, as far as the TDHEs, it says something about some of their unfamiliarity with the NAHASDA requirements. So the nature of my question, I guess, is this—and, of course, that's no different than the public housing authorities that will run into some problems. And HUD has to work—you know how the system works with the housing authorities.
With regards to the BIA and this backlog, and obviously you issue X amount of millions of dollars which has not been spent so therefore, eventually, we all know what's going to happen. It's going to be taken. Having said all that, is there something that Congress needs to do to sit down with all the parties involved, whether it's the veterans, whether it's the USDA, HUD, and BIA, or can this be done by internal rulemaking authority, or can Congress sit down and somehow be able to work with you all to make this work for the better?
Page 54 PREV PAGE TOP OF DOC
And I'm aiming at what's been testified to as a backlog by BIA. Does something need to be done, or will it work out, or—any opinions?
Mr. GONZALEZ. Let me just make some observations, Mr. Chairman. The President's Initiative on the blueprint for the American dream is truly designed to increase minority homeownership by 5.5 million by the end of this decade. I think what that did is collectively bring the agencies together, USDA, HUD, and housing programs like the VA and any other agency, FDIC, to provide that counseling and actually bring these agencies together to try to address what are some of the barriers and obstacles to homeownership.
And I'd say at this point that we are seeing some tangible results there. I think in this case, I think what we need to do is actually work with BIA, work with David Anderson, and try to remove some of these barriers to homeownership on the Native American lands.
Mr. LIU. I certainly can't speak on behalf or for the bureau. I will echo some of the comments of Mr. Gonzalez in regards to this I think we are having some success in certain regional offices with BIA where we have seen some best practices from other parts of the country and applied them. For instance, in our office in Ashland BIA.
But I think from HUD's perspective, we certainly would welcome involvement from Congress and working with us and working wit