The United States Housing Act of 1937 established the Public Housing Program to provide decent, safe, and sanitary housing for low-income families. For many years, this act was interpreted to exclude Native Americans living in or near tribal areas. In 1961, however, HUD and the Bureau of Indian Affairs (BIA) determined that Native Americans could legally participate in the rental assistance for low-income families authorized by the 1937 act and issued regulations to implement this determination. In 1988, the Indian Housing Act established a separate Indian housing program and prompted HUD to issue regulations specific to this program. With the recently enacted Native American Housing Assistance and Self-Determination Act of 1996 (whose regulations are scheduled to take effect on Oct. 1, 1997), the Congress completed the process of separating Indian housing from public housing. According to the May 1996 report by the Urban Institute, the housing needs of Native Americans are growing. Their population rose sixfold over the past four decades to over 2 million in 1990, 60 percent of whom live in tribal areas or in the surrounding counties. And, compared to non-Indians, Native Americans are more family-oriented—37 percent of Native American households are married couples with children versus 28 percent of non-Indian households. Compared to non-Indians, Native Americans have a higher unemployment rate (14 percent versus 6 percent), a smaller number of workers in “for-profit” firms per thousand people (255 versus 362), and a higher share of households with very low incomes (33 percent versus 24 percent). Moreover, Indian housing conditions are much worse than housing conditions in other areas of the country: 40 percent of Native Americans in tribal areas live in overcrowded or physically inadequate housing compared with 6 percent of the U.S. population. Through its Native American Programs headquarters office and its six field offices, and with the help of approximately 189 Indian housing authorities, HUD administers the majority of the housing programs that benefit Native American families in or near tribal areas. Several significant differences exist, however, between HUD’s assistance to these families and to families (non-Indian and Indian) living in urban and other areas. First, HUD’s support for Native Americans derives, in part, from the nation’s recognition of special obligations to the Native American population and is reflected in treaties, legislation, and executive orders. Second, the federal government deals with recognized tribes directly in a sovereign-to-sovereign relationship, rather than through the general system of state and local government. This status allows tribes to establish their own system of laws and courts. Third, the Bureau of Indian Affairs often holds in trust a considerable amount of land for a tribe as a whole; thus, this land is not subdivided into many private holdings as occurs in the rest of the country. This trust arrangement has frustrated the development of private housing markets in tribal areas and has long been seen as a special justification for federal assistance in housing production. Under current regulations, IHAs administer most of the low-income housing assistance that HUD provides to Native Americans. But HUD also provides some housing assistance directly to tribes and individuals. Funding provided through housing authorities is used to develop housing for eventual ownership by individual families through the Mutual Help Program under which families lease and then buy their homes by making payments to the IHA of approximately 15 percent of their adjusted income and must cover their own routine operating and maintenance expenses; develop and maintain rental housing for low-income families through the Rental Housing Program which, like the public housing program, makes low-income rental housing available to families from an IHA at a cost of 30 percent of their adjusted income; modernize and rehabilitate established low-income housing through the public housing modernization program; and subsidize IHAs to defray operating expenses that rental income does not cover and provide rental vouchers for low-income families. Funding available to tribes and individuals includes loan guarantees for home mortgages, block grants through the HOME program for tribes to develop affordable housing in tribal areas, and community development block grants to enhance infrastructure and other economic development activities. As shown in table 1, over the past decade HUD provided a total of $4.3 billion for these programs, which have produced or are expected to produce a total of 24,542 housing units. HUD and IHAs encounter unique challenges and costly conditions in administering and providing housing programs for Native Americans. Because of the over 550 separate Indian nations, cultures, and traditions, not all of these conditions are equally prevalent throughout tribal areas, nor do they have a common impact on developing and maintaining housing. Among the challenges and conditions highlighted in our discussions with officials of HUD and several IHAs, as well as in the May 1996 study by the Urban Institute, are the remoteness and limited human resources of many IHAs and the Native American communities they serve; the lack of suitable land and the severity of the climate; the difficulty contractors and IHAs have in complying with statutory requirements to give hiring preference to Native Americans; and the pressure that vandalism, tenants’ neglect, and unpaid rent put on scarce maintenance funds. The extent and pattern of the lands held by Native Americans are very different today from what they were at the beginning of the 19th century. During that century, the land area over which Indians had sovereignty and which was available for creating reservations was often reduced to small pieces in isolated areas. The remoteness of some of these tribal areas has created significant problems for housing development. In contrast to metropolitan areas, where basic infrastructure systems (including sewers, landfills, electricity, water supply and treatment, and paved roads) are already in place, remote tribal areas may require a large capital investment to create these systems to support new housing. The remoteness of many of the tribal areas also increases the cost of transporting the supplies, raises labor costs, and reduces the availability of supplies and of an “institutional infrastructure” of developers and governmental and private entities. For example, transporting a drilling rig over many miles and hours into the desert to a tribal area in California is far more costly than if the well had been needed in a less remote area. In addition, as the Urban Institute found in its study of Native American housing needs, private housing developers, contractors, and suppliers; governmental planners and building inspectors; private financial institutions; and nonprofit groups are all less available in remote tribal areas. The limited human resources of many IHAs also contributes to the high cost of developing and maintaining housing. HUD’s Deputy Assistant Secretary for Native American Programs told us that housing authorities that recruit their staff from a small tribal population often have difficulty finding qualified managers to administer multimillion-dollar housing grants. This problem is made worse when coupled with the statutory requirement to give Indians first consideration for such jobs. Because many Indian applicants have incomplete formal educations, they often need more time to become familiar with HUD’s assisted housing program and regulations than applicants from the larger pool enjoyed by a public housing authority in an urban area, according to the Deputy Assistant Secretary. The executive director at the Gila River Housing Authority in Sacaton, Arizona, echoed these views when he described his inability to hire skilled and dependable tribal members. He pointed out that many skilled members have personal problems associated with drugs and alcohol, causing the housing authority to search outside the tribal area for much of its labor force. He also said that because members of the available semiskilled work force need a significant amount of training before they are employable, he cannot afford to hire them. Moreover, some of the tribe’s laborers are drawn to cities away from the reservation, he said, because of the greater employment opportunities and higher wages there. This lack of skilled human resources is costly. HUD officials told us that as a general rule in the construction industry, labor costs should not exceed 50 percent of the total cost, but in tribal areas labor costs can run as high as 65 percent because contractors generally have to bring in skilled workers and pay for lodging and commuting costs. In many tribal areas, observers see what appears to be a vast expanse of unused land. However, a lack of available land is, in fact, a constraint that many IHAs face as they develop low-income housing. Factors that limit the availability of land for housing include the trusts in which BIA holds the land that, until this year, limited leases to 25 years in many instances. Special environmental and other restrictions also exist. For example, in planning for development, IHAs and tribes avoid archaeological and traditional burial sites because cultural and religious beliefs preclude using these sites for housing. In many cases, sufficient tribal land exists for housing, but environmental restrictions prohibit the use of much of it for housing. The Urban Institute’s survey of IHAs revealed that, overall, wetlands restrictions, water quality considerations, and contaminated soils add to the cost of housing in tribal areas. In the Western desert, once low-income housing is developed, the severity of the climate can complicate maintenance. The effects of high salt and mineral content in the water and soil were evident at the Gila River Housing Authority, causing damage to water heaters and copper and cast iron pipes. The executive director told us that the average life of a hot water heater costing $300 is about 6 months. To remedy the corrosion to plumbing, the IHA has begun placing plumbing in ceilings and converting to plastic piping. Also, the water’s high mineral content damages the water circulation systems of large fans called “swamp coolers,” used for summer cooling. The executive director told us that because of calcium buildup, the IHA must replace the coolers annually. He also explained that because of the soil’s high salt content, housing foundations and sewer systems also deteriorate more rapidly than in more benign environments. Certain statutes, including the Indian Self-Determination and Education Assistance Act and the Davis-Bacon Act, are intended to protect and provide opportunities for specific groups.