The Native American Housing Assistance and Self-Determination Act (NAHASDA): Issues and Reauthorization Legislation in the 114th Congress
Released: 2017-01-23T00:00:00

Introduction

In 1996, Congress enacted the Native American Housing Assistance and Self-Determination Act (NAHASDA; P.L. 104-330 ). The law represented a major reorganization of federal housing assistance for Native Americans, consolidating most of the federal housing funding that previously had been provided to tribes into a single block grant. NAHASDA recognizes the rights of tribal self-governance and self-determination, and is intended to give tribes more control over affordable housing decisions and provide flexibility to tribes to address their specific housing needs.

The centerpiece of NAHASDA is the Native American Housing Block Grant (NAHBG), the primary program that provides housing assistance to Native American tribes. Through the NAHBG, the Department of Housing and Urban Development (HUD) provides formula funding to federally recognized tribes and Alaska Native villages or to their tribally designated housing entities (TDHEs). These recipients of NAHBG funds can use them for a variety of affordable housing activities that address the housing needs of low-income Native Americans living in the respective tribes' formula areas.

NAHASDA also authorizes a loan guarantee program to help tribes access private funding for housing development activities (the Title VI loan guarantee program) and funding for training and technical assistance. Additionally, a 2000 amendment to NAHASDA authorized the Native Hawaiian Housing Block Grant (NHHBG) program, through which HUD provides funds to Hawaii's Department of Hawaiian Home Lands. NHHBG funds are used to provide housing for low-income Native Hawaiians eligible to live on the Hawaiian Home Lands.

Tribes are largely supportive of NAHASDA and the Native American Housing Block Grant. Nevertheless, tribes have also advocated for a number of changes to program requirements that they argue could enhance their ability to improve housing conditions in tribal areas. Many of the changes that have been proposed by tribes have to do with streamlining program requirements, particularly when NAHASDA funds are used with other sources of federal funds; providing more flexibility for tribes to make their own decisions about housing programs; and requiring HUD to be more responsive to requests for approvals or waivers of certain requirements. In some cases, goals such as increasing tribal flexibility and self-determination may need to be balanced against the goal of providing sufficient protections and oversight to ensure that program funds are being used appropriately.

Congress has expressed interest in certain issues related to NAHASDA beyond those raised by tribes. One such issue has been concern about some tribes' accumulated balances of unspent NAHASDA funds. Additionally, some Members of Congress have opposed reauthorization of the Native Hawaiian Housing Block Grant out of concerns that it could be construed to provide benefits based on race. Others have debated whether NAHASDA funding should be provided to the Cherokee Nation in light of an ongoing legal dispute involving whether the Cherokee Freedmen, descendants of former Cherokee slaves and free blacks who resided with the Cherokee at the time of the Civil War, are entitled to membership in the tribe. The latter two issues were debated when NAHASDA was last reauthorized in 2008 and continue to be of interest to Congress.

The authorization for most NAHASDA programs expired at the end of FY2013, although Congress has generally continued to provide funding for NAHASDA programs. The reauthorization process has presented an opportunity for Congress to consider changes to the law and the programs that it authorizes as well as other housing issues affecting Native Americans. The 114 th Congress considered NAHASDA reauthorization legislation, with different bills being offered in the House and the Senate. However, no NAHASDA reauthorization legislation was enacted by the end of the 114 th Congress.

This report briefly describes selected policy issues related to NAHASDA that have been raised by tribes or Congress in recent years. It then provides a table that compares the provisions of the NAHASDA reauthorization bills that were considered by the House and the Senate in the 114 th Congress with each other and with existing law. For more information on NAHASDA in general, see CRS Report R43307, The Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA): Background and Funding , by [author name scrubbed].

Selected Current Issues

This section discusses some of the more prominent NAHASDA-related issues that have been raised by tribes or debated by Congress in recent years. Among the issues raised by tribes, it generally focuses on proposed changes to NAHBG program requirements. It does not address issues that tribes have raised related to overall program funding levels or proposed changes related to the NAHBG funding formula.

Tribes are not a monolithic group—their sizes, histories, and cultures, and the geography of where they live, vary greatly—and tribes do not always agree about potential changes to NAHASDA. When this report discusses changes that have been advocated by tribes, it generally means that the changes have been repeatedly raised by some tribes or championed by the National American Indian Housing Council (NAIHC), a group that advocates for the housing interests of Native Americans.

NAHBG Program Requirements

The NAHBG provides formula funding to tribes to carry out affordable housing activities that benefit low-income Native American households living in tribal areas. NAHBG funds are subject to a number of requirements that are meant to ensure that the program meets its intended purpose, including requirements intended to ensure that NAHBG-assisted housing is and remains affordable to low-income households. In addition, NAHBG funds are subject to a variety of requirements that are common across many federal programs, such as requirements to carry out environmental reviews and to pay prevailing wages to workers on NAHBG-assisted projects.

Many of the changes to NAHBG requirements advocated by tribes have to do with streamlining certain cross-cutting federal requirements when multiple sources of federal funds are used in a project, providing tribes additional flexibility to set their own requirements, or requiring HUD to respond to requests for approvals or waivers in a timely manner. In some cases, goals such as increasing tribal flexibility and self-determination may create a tension with federal oversight goals.

Environmental Review Requirements

NAHBG-funded activities are subject to certain requirements that are common across federal programs. One example is environmental review requirements under the National Environmental Policy Act (NEPA). Sometimes, a project that uses NAHASDA funds might also use funding from another federal agency, such as the U.S. Department of Agriculture (USDA) or the Department of the Interior's Bureau of Indian Affairs (BIA). Other agencies might have somewhat different rules for complying with overarching federal requirements such as environmental reviews required by NEPA.

Some tribes have argued that the different requirements under different federal programs make it more difficult to combine funding from multiple sources to use for affordable housing activities. They argue that these duplicative or conflicting requirements are burdensome and costly, making it more complicated to combine funding sources and reducing the amount of funds available for housing. Some tribes have suggested that meeting NAHASDA's standards for certain cross-cutting requirements, such as environmental reviews, should be sufficient to satisfy other federal agencies' requirements when multiple funding sources are used in a NAHBG-assisted project.

Congress has made some efforts to address overlapping environmental review requirements in Native American housing. The explanatory statement accompanying the Consolidated and Further Continuing Appropriations Act, 2015 ( P.L. 113-235 ) included provisions related to the issue of multiple environmental reviews, directing HUD to work with the Council on Environmental Quality and other federal agencies "to develop a coordinated environmental review process to simplify tribal housing development and related infrastructure needs." The explanatory statement directed HUD and the other agencies to consult with tribes and TDHEs and to report their conclusions, recommendations, and any necessary statutory changes to the appropriations committees by May 1, 2015. HUD provided an interim report on its progress to the appropriations committees on May 6, 2015, and a final report was released on December 15, 2015.

Prevailing Wage Requirements

A similar issue has to do with prevailing wage requirements. In general, workers on federally funded projects must be paid a prevailing wage under the Davis-Bacon Act. Under NAHASDA, workers on projects assisted with NAHBG funds must be paid a prevailing wage as determined by HUD or by the Davis-Bacon requirements, depending on the type of worker. However, if a NAHBG-assisted project is subject to a requirement to pay a prevailing wage rate determined by the tribe, then the HUD-determined or Davis-Bacon prevailing wages do not apply to the project.

Although tribally determined prevailing wages can satisfy the requirement to pay a prevailing wage under NAHASDA, other federal funding sources may still require the payment of Davis-Bacon wages. This can create complications for projects that use NAHASDA and other sources of funds. Similar to the environmental review requirements, tribes have proposed that using tribally determined prevailing wages should satisfy the requirement to pay prevailing wages for all federal sources of funding in projects that use both NAHASDA and other sources of federal funds.

Maximum Rent

Other changes advocated by tribes have to do with providing tribes with more flexibility in setting their housing program requirements. One example of a NAHASDA program requirement tribes have sought more flexibility with is the maximum rent that can be charged for NAHBG-assisted housing.

Under the NAHASDA statute, the maximum rent or homebuyer payment (that is, the payment under a lease-purchase agreement) for a housing unit assisted with NAHBG funds cannot exceed 30% of the tenant's income. Many tribes have argued that the 30% rule is too restrictive and that tribes should be allowed to set their own maximum rents. Tribes say that the ability to charge higher rents could allow them to more easily pay for the costs of maintaining and operating NAHBG-assisted units (such as paying for repairs, utilities, and general maintenance). Because tribes do not receive an ongoing operating subsidy for NAHBG-assisted units, the inability to charge higher rents means they have to use more of their NAHBG funds to cover the costs of operating existing units or find other funds that can be used for this purpose. Using more NAHBG funds to operate existing units reduces the amount of funds available for other uses, such as developing new units.

Tribes also argue that the ability to charge rents that exceed 30% of income could reduce administrative burdens associated with recertifying tenant incomes, and that it would further the cause of tribal self-determination by leaving decisions about maximum rents to the tribes.

On the other hand, others have argued that allowing tribes the flexibility to set higher rents could make it more difficult to ensure that NAHBG funds are meeting NAHASDA's objective of providing affordable housing. Some lawmakers have expressed concerns that allowing tribes to set maximum rents that exceed 30% of tenant income could make NAHBG-assisted housing unaffordable for some low-income households.

Total Development Cost

Tribes have also sought additional flexibility with limits on the total cost of housing assisted under NAHASDA. NAHBG-assisted housing is supposed to be of "moderate design." In other words, NAHASDA funds are not intended to be used to construct high-cost or luxury dwelling units. To ensure that this requirement is met, HUD publishes total development cost (TDC) limits that are intended to reflect the cost of moderately designed housing in a given area. A TDC is based on the average current construction costs for moderately designed housing in an area taking into account at least two nationally recognized residential construction cost indices.

Tribes can establish their own written standards to ensure that NAHBG-assisted housing is of moderate design. If a tribe has its own written standards, it must ensure that the cost of a NAHBG-assisted project (including all sources of funding) does not exceed the TDC by more than 10% without receiving prior approval from HUD. Tribes that have not adopted their own written standards may not exceed the TDC limits without receiving prior approval from HUD. Tribes can request a variance to exceed the TDC for a specific project or to have the TDC limits adjusted, but must submit information to support such a variance to HUD and receive HUD approval.

Tribes have requested that HUD respond to requests to exceed the TDC limits in a timelier manner, and/or that tribes be given more flexibility to exceed the TDC by more than 10% without obtaining prior HUD approval. In particular, tribes point to the higher costs of developing energy-efficient housing, which could provide cost savings for the tribe or housing owner over the long term but generally has higher initial costs. (Costs related to energy-efficient construction are one type of information that a tribe can submit to HUD in support of its request for a variance to exceed the TDC for a given project. ) Tribes also note the time and procedural burdens involved in requesting approval from HUD.

HUD has expressed some concerns about allowing tribes to exceed the TDC by more than 10% without receiving approval from HUD, noting that investing NAHASDA funds in higher-cost homes reduces the amount of funding available for other housing units. Allowing tribes more flexibility to exceed the TDC by a greater amount before HUD's approval is required may reduce HUD's ability to ensure that NAHASDA funds are being spent on moderately designed housing.

Affordability Period and Binding Commitments

NAHBG-assisted housing is required to be affordable. In general, NAHASDA defines housing as affordable if it is occupied by a low-income household (or a household that was low-income at the time that it first rented or purchased the property) and meets other requirements described in the statute (such as the maximum rent requirement described earlier). Housing assisted with NAHBG funds must remain affordable for "the remaining useful life of the property," as determined by the Secretary of HUD, or for another period of time set by Secretary. The recipient must require "binding commitments," such as deed restrictions or other mechanisms, to ensure that the affordability period will be met.

Tribes have sought additional flexibility related to these binding commitments for certain types of NAHASDA investments. Currently, tribes can choose to set a short affordability period for units that use small investments of NAHASDA funds, but they must always set some kind of affordability period secured by a binding commitment. Some tribes have proposed that affordability periods and binding commitments should not apply at all for privately owned housing units that use less than a certain amount of NAHBG funds. The amount could be a specified dollar amount or a percentage of the total development cost maximum for the area. However, removing the affordability period and binding commitment requirements for certain types of NAHBG investments could make it harder for HUD to ensure that NAHBG funds used in this way result in housing that continues to be affordable.

Expediting HUD Responses to Requests for Approvals or Waivers

A number of NAHBG requirements can be waived by HUD if certain conditions are met. This includes the ability to exceed the TDC by more than 10%, as described previously, as well as factors related to environmental review requirements, the timing of submission of Indian Housing Plans, and a requirement to enter into local cooperation agreements before developing NAHASDA-assisted housing in other jurisdictions, among other things.

Some tribes have argued that HUD is sometimes too slow in responding to requests for waivers of these requirements, making it more difficult and time-consuming for tribes to carry out their affordable housing activities under NAHASDA. They have urged Congress to enact time limits for HUD to respond to various waiver requests, and have sometimes argued that such requests should be considered to be approved if HUD does not respond within the given timeframe. Additionally, tribes have argued that HUD should be required, rather than allowed, to waive certain requirements if specific conditions are met.

HUD has stressed the need to balance timeliness with accuracy, and has noted that approvals sometimes take longer because additional information is needed from the tribe.

IHS Sanitation Facilities Funding

Outside of NAHBG requirements, another issue that tribes have framed as one of tribal flexibility has to do with using sanitation facilities construction funding appropriated to the Indian Health Service (IHS) in conjunction with HUD funding. For many years, Congress has stipulated in annual appropriations acts that funding for the construction of sanitation facilities appropriated to IHS may not be used to construct sanitation facilities for new homes that are funded through HUD grant programs. (IHS is part of the Department of Health and Human Services, although it is traditionally funded through the annual appropriations acts for the Department of the Interior.) The prohibition is meant to ensure that planning for new homes built with HUD funding includes the necessary sanitation facilities infrastructure in the cost of a home, and that limited IHS sanitation facilities funding can remain available to provide sanitation facilities infrastructure for existing housing or housing funded through other sources.

Tribes have advocated for the ability to use the IHS sanitation facilities funding in conjunction with HUD-funded housing construction. While NAHASDA funds can be used for housing-related infrastructure, NAHASDA does not provide dedicated funds for that purpose. Therefore, tribes must balance their needs for additional housing and related infrastructure when choosing how to use NAHASDA funds or find other sources of funding for infrastructure. In some cases, tribes may not adequately plan for providing infrastructure for NAHBG-assisted homes or such homes may tax existing infrastructure systems. Tribes have noted their ongoing need for funding for sanitation facilities and have argued that tribes should be able to choose how to combine federal funds provided for tribal housing and infrastructure.

Even if Congress enacted language allowing tribes to use IHS sanitation facilities funding in conjunction with new HUD-funded housing in authorizing law, that authority could still be overridden if prohibitions on using IHS sanitation facilities funding for this purpose continued to be included in future annual appropriations laws.

Funding for Training and Technical Assistance

NAHASDA authorizes funding for "a national organization representing Native American housing interests" to provide training and technical assistance to tribes and tribally designated housing entities that administer NAHASDA funds. That funding was traditionally provided to the National American Indian Housing Council (NAIHC). However, since FY2012 annual HUD appropriations acts have provided training and technical assistance funding for "national or regional organizations representing Native American housing interests" (emphasis added), and Congress has indicated that it expects the funds to be awarded competitively. (In some years, Congress has provided funding for training and technical assistance for national and regional organizations, but it has also required that a certain amount of that funding be provided specifically to a national organization. ) In the past, both Congress and the Administration have noted that the NAIHC has had carryover balances from previous years that could be used to carry out its training and technical assistance activities and that, while the NAIHC is the only national organization that focuses on Native American housing issues, there are regional organizations that could also provide training and technical assistance to tribes.

As a result of this language in recent appropriations laws, in recent years HUD has distributed training and technical assistance funding to multiple groups through a competitive process. The NAIHC has opposed this change in the distribution of training and technical assistance funding, arguing that it is best positioned to assist tribes and that tribes have not called for the system for training and technical assistance to be changed. Some tribes have also expressed concerns that changes in the way in which technical assistance funding is provided may make it more difficult for tribes to receive assistance that is tailored to their specific needs or to receive training specifically from the NAIHC if they prefer.

Unexpended Balances of NAHBG Funds

In recent years, Congress has expressed concern over NAHBG funds that have been awarded to tribes under NAHASDA but remain unexpended. According to a Government Accountability Office (GAO) report, tribes cumulatively had $1 billion in unexpended NAHBG funds in July 2013. A small number of tribes are responsible for most of the unexpended funds, and the Navajo Nation, in particular, at one point accounted for as much as half of the total amount. The Navajo Nation consistently receives the largest NAHBG allocation of any tribe due to its size and housing needs. In past years, capacity issues and other concerns have led to a slow spend-out of the Navajo Nation's NAHBG funds, although it has undertaken efforts in recent years that may improve its ability to spend funds.

Both tribes and HUD have pointed to multiple factors that can contribute to unexpended balances. These include lack of capacity and staff turnover at some tribal housing authorities, the fact that it can take several years to complete the construction of new housing, and additional difficulties in constructing housing stemming from the recent economic downturn or the short building seasons that some tribes face. Some tribes that receive smaller allocations might need to save several years' worth of funds before they have accumulated enough to undertake certain types of projects, such as new construction. Some tribes also say that the balance of unexpended funds is due to HUD not providing funds to tribes in a timely manner or being slow to approve waivers or approvals related to NAHBG-funded projects, and delays by the Bureau of Indian Affairs in approving leases on trust lands. HUD has said that it is providing additional technical assistance to tribes with large balances of unexpended funds and working with the tribes to help them spend their funds in a more timely fashion.

Since FY2012, Congress has been including five-year obligation deadlines for NAHBG funds in annual appropriations laws. In general, funds have to be expended by tribes no later than 5 years after the end of the obligation period, meaning that the funds remain available for no more than 10 years from the year of appropriation. Previously, appropriations laws specified that funds would remain available until expended, meaning that there was no deadline for tribes to spend their funds. Congress has also begun directing HUD to notify tribes of their allocation amounts within 60 days of the appropriations law being enacted.

Congress and the Administration have also considered additional provisions that would reduce grant amounts for tribes that have large amounts of unexpended funds under certain circumstances or would otherwise limit some tribes' funding. One such provision, which applied only to FY2016 appropriations, was enacted. The Consolidated Appropriations Act, 2016 ( P.L. 114-113 ) required that if a tribe had undisbursed NAHBG funds totaling more than three times the formula allocation it would otherwise receive, its formula allocation for FY2016 would be reduced commensurately. This provision only applied to tribes that were eligible for formula allocations of at least $8 million (a small number of tribes).

Similar, though not identical, provisions had been proposed in the President's FY2015 budget request and NAHASDA reauthorization legislation considered in both the 113 th and 114 th Congresses, though these provisions were ultimately not enacted. Furthermore, the FY2016 HUD appropriations bill approved by the Senate Appropriations Committee ( H.R. 2577 ) would have limited any single tribe's NAHBG allocation to no more than 10% of the total amount of funding provided to the program. Based on recent allocations, such a provision would only affect the Navajo Nation, the recipient of the largest amount of NAHBG funding. This provision was not included in the final FY2016 HUD appropriations law.

Housing Programs for Native Hawaiians

In 2000, NAHASDA was amended to add the Native Hawaiian Housing Block Grant (NHHBG). The NHHBG provides funds to Hawaii's Department of Hawaiian Home Lands (DHHL) to use for affordable housing activities for low-income Native Hawaiians eligible to reside on the Hawaiian Home Lands.

Another HUD program, the Native Hawaiian Housing Loan Guarantee Program (also called the Section 184A program), provides loan guarantees on certain home mortgages obtained by Native Hawaiians on the Hawaiian Home Lands. The Native Hawaiian Housing Loan Guarantee program is authorized under the Housing and Community Development Act of 1992, as amended, rather than under NAHASDA. Both the NHHBG and the Native Hawaiian Housing Loan Guarantee programs were originally authorized through FY2005. They have not been reauthorized since then, although Congress has usually continued to provide funding for the programs in annual appropriations acts.

Some lawmakers have opposed the reauthorization of the NHHBG and other programs that solely benefit Native Hawaiians. This opposition largely stems from a broader debate about the relationship between the federal government and Native Hawaiians. Unlike federally recognized tribes, which are sovereign nations with a government-to-government relationship with the United States, Native Hawaiians are not recognized by the federal government as a separate political entity. While recipients of NAHBG funds are eligible because of their political status as federally recognized tribes, some have argued that programs that solely benefit Native Hawaiians could be construed to be based on race, a constitutionally suspect basis, and could therefore potentially be deemed to be unconstitutional. They also express concerns that such programs may appear to confer a political status similar to that of tribes on Native Hawaiians.

Lawmakers who support reauthorizing the NHHBG have argued that the federal government should be responsible for providing certain kinds of assistance to Native Hawaiians, similar to the assistance it provides to Native Americans, based on the history of the United States' relationship with Hawaii. They also cite the need for affordable housing on the Hawaiian Home Lands and barriers to housing development on the Hawaiian Home Lands that are similar to those on tribal lands.

In past Congresses, NHHBG reauthorization has been considered both in standalone bills and broader NAHASDA reauthorization bills, but has continued to meet with opposition.

The Cherokee Freedmen and NAHASDA

The Cherokee Freedmen are descendants of former Cherokee slaves and free African Americans who resided with the Cherokee Nation at the close of the Civil War. For many years, there has been ongoing litigation between the Cherokee Freedmen, the Cherokee Nation, and the United States over whether the Freedmen have a right to membership in the tribe. The Cherokee Freedmen claim a right to tribal membership based on an 1866 treaty between the United States and the Cherokee Nation. The Cherokee Nation has attempted to remove the Cherokee Freedmen from the tribal membership rolls citing the sovereign right of tribes to determine tribal membership.

When NAHASDA was last reauthorized (in 2008), some lawmakers supported denying NAHASDA funding to the Cherokee Nation if it did not restore tribal citizenship rights to the Cherokee Freedmen. Others opposed such efforts, citing reluctance to intervene in a dispute that was being considered in the courts and concerns about the effect that denying NAHASDA funding would have on low-income members of the Cherokee Nation.

Ultimately, Congress included language in the 2008 NAHASDA reauthorization law prohibiting the Cherokee Nation from receiving NAHASDA funding unless (1) a specific temporary injunction in tribal litigation on the Cherokee Freedmen dispute remained in effect during litigation or (2) there was a settlement to the litigation. The injunction in question maintained tribal membership for the Cherokee Freedmen pending resolution of the case. The tribal litigation has since ended, and the injunction remained in place throughout, presumably removing any restrictions on the Cherokee receiving NAHASDA funding.

Federal litigation in the case is ongoing, and an injunction in the federal litigation maintains tribal membership for the Cherokee Freedmen pending resolution of the federal litigation.

NAHASDA Reauthorization Legislation in the 114th Congress

NAHASDA has been reauthorized twice since it was first enacted in 1996. The most recent authorization for most NAHASDA programs expired at the end of FY2013, during the 113 th Congress. (The authorization for the Native Hawaiian Housing Block Grant expired at the end of FY2005.) The 113 th Congress considered NAHASDA reauthorization legislation but did not enact any prior to the end of the Congress.

During the 114 th Congress, the House and the Senate considered separate versions of NAHASDA reauthorization legislation:

In the House, H.R. 360 was introduced on January 14, 2015, and was passed by the House under suspension of the rules on March 23, 2015. In the Senate, S. 710 was introduced on March 11, 2015. An amended version was favorably reported by the Senate Committee on Indian Affairs on June 4, 2015, and the Senate Banking Committee was discharged from further consideration of the bill on August 5, 2015.

Both H.R. 360 and S. 710 would have reauthorized a number of Native American and Native Hawaiian housing programs, authorized certain new program demonstrations and set-asides for Native American housing, and made several changes to NAHBG requirements. Both bills addressed a number of the issues described earlier in this report, although not necessarily in the same way. Both bills also included certain other changes to NAHASDA or other Native American housing programs, many of which have been supported by tribes.

Table 1 compares the provisions of H.R. 360 , as passed by the House, and S. 710 , as reported out of committee in the Senate, with each other and with existing law. Ultimately, no NAHASDA reauthorization legislation was enacted during the 114 th Congress.