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. 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. HUD Provides Most Funding for Housing Assistance Through Indian Housing Authorities

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 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. Providing Housing Assistance for Native Americans Is Challenging and Costly

HUD and IHAs encounter unique challenges and costly conditions in administering and providing housing programs for Native Americans. 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. Land-Use Restrictions and the Inhospitality of the Land Complicate the Development and Maintenance of Low-Income Housing

In many tribal areas, observers see what appears to be a vast expanse of unused land. HUD Does Not Apply Its Risk Assessment Program Effectively, and New Legislation May Require Changes in Oversight

In December 1996, the Seattle Times reported a series of articles describing the possible mismanagement and misuse of federal funds by Indian housing authorities. HUD’s IG found that most of the Times reports were accurate, including reports of Indian housing authorities using federal funds to build luxury homes for families with incomes that exceeded the program’s eligibility criterion and reprogramming significant federal funds from one purpose to another without HUD’s approval. Although HUD has a system to identify poorly performing Indian housing authorities, our work showed that this system did not detect, for the most part, mismanagement by the authorities as reported in the Times.
Why GAO Did This Study

GAO discussed the Department of Housing and Urban Development's (HUD) Native American housing programs, focusing on the: (1) funding history and results of HUD's housing programs for Native Americans; (2) factors that complicate and make costly the development and maintenance of affordable housing for Native Americans; and (3) HUD's ability to detect mismanagement in Native American housing and the potential impact of the recently enacted Native American Housing Assistance and Self-Determination Act of 1996 on HUD's oversight of Native American housing.

What GAO Found

GAO noted that: (1) from fiscal year (FY) 1986 through FY 1995, HUD provided $4.3 billion (constant 1995 dollars) for housing and community development in tribal areas; (2) of this amount, HUD provided $3.9 billion to approximately 189 Native American housing authorities to develop and maintain affordable housing and assist low-income renters; (3) in this period, the authorities used the funds to construct over 24,000 single-family homes, operate and maintain existing housing, and encourage other development; (4) over the decade, HUD also has provided direct block grants totalling over $424 million (constant 1995 dollars) to eligible tribes for community development and mortgage assistance; (5) many factors complicate and make costly the development and maintenance of affordable housing for Native Americans; (6) these factors include the remoteness and limited human resources of many Native American housing authorities and the Native American communities they serve, land-use restrictions and the inhospitality of the land, the difficulty that contractors and Native American housing authorities have in complying with statutory requirements to give hiring preference to Native Americans, and the vandalism and neglect that make heavy demands on the scarce maintenance funds available to Native American housing authorities; (7) in December 1996, the Seattle Times reported 29 instances of possible mismanagement or misuse of federal funds by Native American housing authorities; (8) for example, the Times reported that Native American housing authorities used federal funds to build luxury homes, covered the mismanagement of one federal grant with funds from another grant, and reprogrammed large federal grants without HUD's approval; (9) HUD's Inspector General found that most of these reports were accurate; (10) GAO's work found that HUD does not effectively apply its system for alerting it to poorly performing Native American housing authorities across its Native American Programs field offices; (11) as a result, HUD may not be able to detect additional instances of mismanagement or misuse of funding; and (12) futhermore, HUD's approach to overseeing Native American housing may change, depending on regulations now being developed to implement the new Native American housing legislation.