Economics Special: National inter-tribal housing construction co-op yet to happen

ALBUQUERQUE, N.M. - Perhaps it's like herding cats. Tribes in the aggregate build thousands of units of housing each year, but they have yet to come together in any serious way nationwide to pool their resources on construction.

It's not as if they don't have a model. More than 400 tribes have banded in a successful intertribal effort to pool risk on housing insurance. And some Indian Housing Authorities represent more than one tribe, so there is some local cooperation between tribes. But as to the logical next step - a national intertribal effort to cooperate to construct the houses themselves - that shoe has yet to drop.

Amerind Risk Management Corp. is a non-profit venture of more than 240 tribal entities representing 400 tribes who have created a self-insured risk pool to save money on traditional home insurance. It covers 61,000 units of housing across Indian country, with a replacement value of $6.5 billion.

Amerind says it has saved its member tribes and the federal government $100 million in premiums they would otherwise have had to pay out to traditional insurance carriers.

Robert Gauthier is chairman of Amerind, and was for many years the executive director of the Salish & Kootenai Housing Authority, Pablo, Mont. He told Indian Country Today that tribes have been discussing how to pool resources on housing construction for years, but never have made it happen.

"It could be done the same way" as pooling housing insurance, and make an excellent opportunity for joint economic development, according to the official. "It seems like that idea has all kinds of merit," he said. "I don't know why there hasn't been an effort to do that."

But, "it's hard to get the nations together," he observed. And when it comes to constructing houses, "tribes are proprietary about employment."

An intertribal venture could build modular housing at one or two centralized locations and then ship them to the applicable reservations, he posited. Presumably economies of scale produced by large volume ordering would mean the units could be built more cheaply than if done at each nation.

The official was not proposing that Amerind should lead the way to any such housing construction cooperative, but was replying to a reporter's hypothetical questions.

Gauthier, who is now working to develop a bank for the Montana tribes, who are based on the Flathead Reservation, can also foresee an inter-tribal trifecta in the housing arena - not only building and insuring the units, but financing them as well.

Noting that Amerind has a $40 million investment pool, he thinks it would be worth investigating having Amerind pool mortgages on the houses after they are constructed, and then sell them to a national financial intermediary like Washington, D.C.-based Fannie Mae.

There would be cash to be made from a nationwide joint construction venture. A Navajo Nation official once quoted figures from a Bureau of Labor Statistics survey which said that producing 1,000 single-family homes a year would produce 2,000 worker jobs for a year and $60 million in wages. And a consortium of 400 tribes would probably find cost savings similar to what Amerind saves on homeowners insurance.

A similar amount of multifamily units would generate 800 jobs paying $23 million in wages, according to the BLM.

With the passage of the National American Housing Assistance and Self Determination Act in 1996, tribes were directed to partner with the private sector to stretch their housing assistance. They have successfully done so, and the 2,000-3000 units previously being constructed a year in Indian country has doubled and even tripled in some years.

On the commercial real estate side, four casino tribes are doing a joint venture to construct an Indian-themed hotel in Washington, D.C.

The four are the Oneida of Wisconsin, the Forest County Potawatomi, also of Wisconsin, the San Manuel Band of Mission Indians, California, and the Viejas Band of Kumeyaay Indians, also of California.

They are calling the venture Four Fires LLC. The $43 million, 13-story Residence Inn by Marriott is set to open next year.

Gauthier, who has just returned from an Amerind board meeting in Seattle, reported that in a victory for the insurance pool, Fannie Mae has reversed itself and will now allow Amerind coverage on mortgages it buys.

Gauthier said Amerind is restructuring itself to limit exposure to state regulation and taxation, especially in states like Alaska and Oklahoma that do not have reservations.