NA = Not Applicable

NOTE: In 1996, funding for activities within the "Native American Housing Block Grants," Program was provided from the following appropriations: "Annual Contributions for Assisted Housing," "HOME Investment Partnerships Program," "Payment for Operation of Low-Income Housing Projects," and "Homeless Assistance Grants." In 1997, funds were provided through the following appropriations: "Preserving Existing Housing Investment," "Development of Additional New Subsidized Housing," "HOME Investment Partnerships Program," and Homeless Assistance Grants."

Summary of Budget Request

The Budget proposes an appropriation of $485 million for the Native American Housing Block Grant (NAHBG) Program in 1998. This request will consolidate all current Indian housing modernization and development, operating subsidies, homeless assistance, supportive services, tenant opportunities, HOME investment partnership, and Section 8 programs. This umbrella block grant will provide funds to tribes and tribally designated housing entities (TDHEs), previously known as Indian Housing Authorities, to provide and maintain housing for low-income Native Americans. This program is authorized by the Native American Housing Assistance and Self-Determination Act of 1996 (P.L. 104-330, enacted 10-26-96). The 1998 Budget proposes that all balances from the "Annual Contributions for Assisted Housing", "Development of Additional New Subsidized Housing", "Preserving Existing Housing Investment", "HOME Investment Partnerships Program", "Emergency Shelter Grants", and "Homeless Assistance Funds" for Indian housing authorities be transferred to and merged with the "Native American Housing Block Grants" account.

Explanation of Increases and Decreases

The increase in budget authority and outlays reflects the inception of this new program in 1998.

Program Description and Activity

The Indian and Alaska Native communities have some of the most adverse social and economic conditions in the Nation. For American Indian and Alaska Native (AIAN) areas, the 1990 Census reported an unemployment rate of 20 percent and a poverty rate of 36 percent. These poor economic conditions naturally foster higher incidences of social problems, such as alcohol and drug abuse and unemployment in Indian areas. Without a sound economic base, the availability of acceptable housing from the private sector is extremely limited. The 1990 Census showed that

28 percent of AIAN households live in housing that is overcrowded and/or lacks kitchen or plumbing facilities. In some areas, namely Alaska and Arizona/New Mexico, substandard housing rates are significantly higher, at 63 and 61 percent, respectively. While not measured by the Census, it is estimated that 40 percent of households in tribal areas are either overcrowded and/or have deficiencies in structural conditions and heating/electrical systems (Housing Problems and Needs of American Indians and Alaska Natives).

Native American Housing Block Grants

Approximately 42 percent of low-income households in tribal areas are served by HUD-assisted housing units. The current inventory is approximately 65,000 units with 68 percent of these units in the homeownership program and the remainder in the rental program. Nearly 10,000 units have already been conveyed to homeownership. For tribes to maintain these units for low-income

households, continued assistance is necessary to supplement rental income and to keep housing in an acceptable condition through improvements and repairs. With few exceptions HUD-funded programs are the only housing programs available in tribal areas. Over 90,000 low-income households remain unserved in Indian country.

In 1996, Congress recognized the unique nature and needs of AIAN areas and created the NAHBG program to better assist Native people and their communities. This Budget request provides funding levels needed to allow tribal housing organizations to maintain existing units and begin development of new units to meet their critical long-term housing need. The Native American Housing Assistance and Self-Determination Act of 1996 requires that each eligible Indian tribe or its TDHE receive annually a single block grant to meet the housing needs within their community. The tribe or its TDHE must submit both a 1-year and 5-year Indian Housing Plan (IHP) containing a mission statement, goals and objectives, needs statement, statement of financial resources and affordable housing resources, and proposed activities designed to meet the housing needs identified in the Plan. After approval by the Department, the tribe will be included in the annual formula allocation. This request reflects the anticipated increase of up to 70 additional tribes that will qualify for assistance under the new Act.

The NAHBG will develop and support affordable rental and homeownership housing and provide housing services through the following six eligible activities, as well as provide training and technical assistance:

Development

This category supports acquisition, new construction, reconstruction, and moderate or substantial rehabilitation of affordable housing, and may include real property acquisition, site improvement, development of utilities and utility services, conversion, demolition, financing, administration and planning, and other related activities. The 1998 request will begin to address the critical long-term housing shortage in Indian country.

Indian Housing Assistance

Indian Housing Assistance provides for modernization and operating assistance for housing previously developed or operated under a contract between the Secretary and an Indian housing authority, now TDHE. This category also provides funding for the Partners in Progress initiative for high risk tribally designated housing entities to support contract expertise and training and technical assistance in the oversight and management of assisted units.

Housing Services

Housing Services provides for housing counseling for rental or homeownership assistance, establishment and support of resident management organizations, Section 8 corporations, energy auditing, self-sufficiency services, and other related services assisting owners, tenants, contractors and other entities, participating or seeking to participate in eligible housing activities. This category includes renewal of 3,600 expiring contracts at a cost of $21 million (90 percent of all Indian Section 8 housing units); supportive and self-sufficiency services for all eligible tribes; the�t��ntion of housing service activities such as energy auditing; and the intent of Congress in the new Act to provide improved access to homeless funding for tribes.

Housing Management Services

This category will provide management services for affordable housing which may include preparation of work specifications, loan processing, inspections, tenant selection, management of tenant-based rental assistance, management of affordable housing projects, and payment of user fees and certain administrative expenses.

Native American Housing Block Grants

Crime Prevention and Safety Activities

Funding will be provided for safety, security, and law enforcement measures and activities appropriate to protect residents of affordable housing from crime.

Model Activities

The Secretary may specifically approve housing activities under model programs that are designed to develop and support affordable housing to comply with the mandate that new housing opportunities be developed, utilizing a wide variety of creative approaches by,

among other things, establishing partnerships, leveraging other public and private funds, and while ensuring long-term viability, implementing ideas that supplement limited Federal grant funds with other sources of capital, loans, buy-downs and other financing mechanisms.

Training and Technical Assistance

This $5 million set-aside provides funds to support the inspection of Indian housing units, contract expertise, and training and technical assistance to assist in the oversight and management of Indian housing or tenant-based assistance. This will be the first time that such funding is solely devoted to Indian programs for this purpose. Among the activities included are the following: resident surveys, data collection and analysis, and training and technical assistance for the Office of Native American Program employees and residents. This funding includes up to $200,000 for related travel.

Fiscal Year 1998 Performance Measures

This block grant will provide the opportunity for tribes to identify the needs of their members and determine the best ways to address those needs. The program requires each eligible tribe and TDHE to submit a local housing plan which will reflect the local needs and the way in which the tribe or TDHE plans to meet those needs, which will include the maintenance of existing housing stock. All applicants must provide housing plans in order to receive funding.

Among the objectives of this program is the development of new housing units to meet low-income housing needs. Each tribe will determine the number of units to be constructed. Some tribes may take advantage of existing housing stock and purchase and/or rehabilitate those units. Others will construct new rental or homeownership units. Based on existing needs for 100,000 additional units, funds will be reserved each fiscal year to build 1,900 new units. By 2002, over 12 percent of the existing critical long-term housing development backlog of need will be met.

In order to maintain the existing housing supply created pursuant to the 1937 Housing Act, each tribe is to include in its plan, the amount of funds necessary to perform activities previously described as modernization. In order to assure compliance with this requirement, each tribe must obligate 100 percent of the designated modernization funds within 2 years of receipt of the funding.

Adequate management of housing programs continues to be a concern of the Department. In fiscal year 1996, 32 at risk (troubled) housing entities out of 190, were identified to participate in the Partners in Progress program which provides increased oversight and technical assistance to improve management skills. The Department's goal is to remove 50 percent of those housing entities from the list by fiscal year 1998, and 100 percent of them by 2000. As housing entities are added to the list, the goal is to remove 50 percent of them within 2 years of designation, and 100 percent of them within 4 years of designation.

An important indicator of successful management is a minimal number of vacant units. Vacant units are a double drain on already limited resources because they produce no income and create additional expenses for security. By striving for a low vacancy rate, a housing authority can maximize the use of its resources. Based on a 5.7 percent vacancy rate in fiscal year 1995, it is the Department's goal to reduce vacancies to 5.3 percent by fiscal year 1998, and to 5 percent by 2000.