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2006 housing aid targeted for draconian cuts

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WASHINGTON - American Indian housing aid from the federal government has
been targeted for a deep cut in the Bush administration's 2006 budget
request. Unless Congress acts to restore funding, more than $100 million in
assistance, or 15 percent of the total, will be taken away from Americans
most in need of housing help.

The major funding cuts - $107 million - come in the housing block grants
administered by the Department of Housing and Urban Development under
NAHASDA (Native American Housing Assistance and Self Determination Act),
and the Indian set-aside in the Community Development Block Grant program
(the I-CDBG).

Other Native-friendly programs, such as HUD's Rural Housing and Economic
Development (RHED) program which generally targets at least a quarter of
its $25 million annually for Indian projects, have been zeroed out.

However, in a telling indication of the way budget politics is played in
Washington, this is the fourth straight year in which RHED has been zeroed
out by the Administration. Congress has restored it three times.

The NAHASDA block grants stand to be cut by $39 million to $583 million;
while the I-CDBG, enacted for $68 million in fiscal 2005, would be
effectively zeroed out in HUD's budget by being combined with NAHASDA with
no additional funding.

The rest of the giant CDBG program is being transferred to the Commerce
Department, saving HUD a total of more than $4 billion. It is slated to be
combined with a slew of other housing and community development programs,
at apparently reduced funding levels.

In one of the few bits of good budget news for Indian housing, the
Administration proposes increases in two programs, HUD 184 and Title VI,
that guarantee mortgage and economic development outlays by private
lenders. This is in line with the Administration's public policy goal of
increasing homeownership, especially among minorities.

If enacted as proposed, the cuts would change the tide for NAHASDA housing
assistance, which in the 1990s grew to $650 million in support of NAHASDA's
revolutionary rewrite of the way federal housing assistance is given to

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Prior to NAHASDA, under the 1937 Public Housing Act, HUD funded specific
programs such as the old Mutual Help program with which tribes needed to
comply in order to get assistance. Under NAHASDA, those old programs were
boldly dissolved in favor of a single block grant given to each tribe.

The intent of Congress in passing NAHASDA in 1996 was twofold: acknowledge
tribal sovereignty in granting tribes the discretion to spend their housing
dollars in the way they think best, and an explicit admonition to partner
with the private sector to stretch NAHASDA money by combining it with
private investment.

Two of the ways tribes can do this (although not the only two) are to use
the HUD 184 and Title VI programs to guarantee lender outlays in Indian
housing. The HUD 184 has guaranteed more than $200 million in mortgages in
Indian areas; Title VI, about half that amount.

NAHASDA funds have two components: money to maintain housing built under
the 1937 Act, and money for new construction for additional housing needs.

Since almost every tribe in America has a significant "additional need,"
these cuts if enacted would inevitably put a damper on new unit
construction, which has greatly increased since the implementation of

Indian housing leaders' reaction to the budget numbers was disappointed but
measured. The National American Indian Housing Council said it wanted to
"remind" the president and Congress that "funding for Native housing
programs is necessary to provide heat, water and basic housing to some of
the most remote and isolated areas of this nation."

Chester Carl, chairman of NAIHC and the Navajo Housing Authority, noted
that national security funding is vital for all Americans and noted the
high percentage of American Indians in the military services, but pointed
out that infrastructure needs in Indian country are greater than those in

NAIHC is asking for $723 million in funding for NAHASDA for fiscal 2006 and
seems sanguine that some of the current numbers may change, making a
reference to "as Congress molds the FY 2006 budget."

For fiscal 2005, the budget as enacted calls for $622 million for NAHASDA.
The 2004 budget included $650 million for the housing block grants.