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Got a Tribal Housing Dream? It May be Within Your Reach

The Pueblo of Santa Clara (Kha’p’o – Valley of Wild Roses) is a Tewa-speaking small Pueblo located in the Espanola Valley, in northern New Mexico with an inadequate $800,000+ a year in NAHASDA1 funds to spend on much-needed tribal housing. The HUD2 housing program is basically limited to serving low income people; many tribal members are completely under-served. But in November 2013, without borrowing a penny from any bank or anyone else, without using any NAHASDA funds, and essentially without being handicapped by any HUD rules or guidelines, the Santa Clara Pueblo Housing Authority (SCPHA) under the leadership of executive director Francisco Simbana, broke ground on a new project for 36 town houses and a commercial Laundromat.

These homes are being built 100-percent the way Santa Clara Pueblo Housing Authority wants and are being built faster (150 days) and more cost-effectively ($80 per square foot) as the result of bypassing HUD guidelines, by HouseMax, LLC. The new town homes are expected to generate revenues of almost $150,000 annually for SCPHA housing related activities. Are you interested in doing something similar in your native community?

“Anyone can do it,” says Simbana. “First, you have to have a dream.” For SCPHA, this took about 8 years and the joint effort of the employees, board of commissioners, and the Santa Clara Tribal Council. SCPHA was successful because it saved money wherever possible, spent as little as possible, and took an active role in its own money management and investment. It also took advantage of a subtle but important change in the law. 

Under a 1999 HUD guidance, the only restriction on the use of proceeds of sale related to 1937 Act units was that they be spent on housing-related activities. Equally notable is that they could be invested by the tribal housing entity in any prudent investment, not just in lower-yielding restricted federal investments. Thus, HUD allowed for great flexibility in the handling and growth potential of proceeds of sale. Expenditure of program income6, on the other hand, was not only restricted to Affordable Housing activities, but, in many HUD regions8, was required to be spent first, even before expending Indian Housing Block Grant (IHBG) funds. There was little chance for it to accumulate and grow.

Effective January 2, 2013, NAHASDA regulations changed, and the new regulations provided that program income would be treated like proceeds of sale and would not be restricted except that it would be treated like Program Income and only could be spent on housing related activities. SCPHA took immediate advantage of this change. It took its accumulated program income funds and combined them with its proceeds of sale, more than doubling the amount of funds available for SCPHA’S unrestricted spending and investing.

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The Board had already taken an active part in increasing its investments, switching money managers to increase the interest from the investments. Meanwhile, with the Board’s full knowledge and support, Simbana had been managing its program expenses carefully. Staff members, too, co-operated in the program operation. Rather than trying to employ as many people as possible, Simbana cross-trained all his staff, and kept saving rather than spending. As he describes it: “After you dream, you learn how to postpone the dream, until the time is right.”

When the program income was suddenly available to be treated the same as proceeds of sale, SCPHA was able to take the funds, other non-federal funds, most notably proceeds of sale, plus the substantial accumulated interest to build its dream project, serving those whom it had previously been unable to serve, and ultimately developing a project that met SCPHA’s guidelines, not HUD guidelines.

As Simbana met with other housing directors and participated in various trainings, he quickly realized that not very many housing people were aware of the new opportunities now available for investing and expending their own monies in ways that were not previously possible. Simbana is excited about what SCPHA has been able to do and wants Indian country to know that “anyone can do this.”

As is clear by Santa Clara Pueblo Housing Authority’s example, you don’t need to be a big tribe or a wealthy tribe to realize this dream. 

You just need to develop a sound financial plan and get your program people, and your Board of Commissioners to agree to abide by it. Then build your dream!