Trump Budget Takes an Axe to Native Housing Allocations

Final budget won’t be set until at least May, but funding for Native housing is not looking good already

The federal Department of Housing and Urban Development on January 19 issued a major study of American Indian housing allocations that determined the federal government has not funded Indian housing adequately for the past two decades. But HUD officials may be experiencing a bad case of whiplash less than two months later with the release of the Trump Administration’s fiscal 2018 budget, which guts Native housing.

While the proposed 2018 budget released March 16 is the so-called “skinny” budget, with most details to follow in May, the details provided now would be devastating if implemented. The Indian housing block grants (IHBGs), the main source of federal funding for Native housing, would be cut by nearly 25 percent, from $650 million to $500 million, according to media sources.

And the Community Development Block Grant (CDBG) program, which contains a substantial Indian set-aside, would be eliminated. Another program, HUD HOME, which is not specifically targeted to tribes but is sometimes used as gap funding, would also be eliminated, according to media reports.

The cuts to Indian housing would be proportionally more than to HUD as a whole, which the new budget slashes by $6 billion or about 13 percent.

There are no details on the fates of smaller HUD Native housing programs, like the HUD 184 guaranteed Indian mortgage program, a highly successful effort that has guaranteed loans of more than $5 billion to individual Indians, tribes, and tribal organizations over the past 20 years.

However, a sentence in the proposed budget from the Office of Management and Budget on HUD mortgage efforts did not mention the HUD 184. HUD, it said “supports homeownership through provision of Federal Housing Administration mortgage insurance programs.” The HUD 184 is not an FHA loan. HUD also runs a second Indian loan program, the Title VI, which provides project and infrastructure loans for Indian housing projects.

The tone couldn’t be different from the HUD housing needs report, its first major study in 20 years, released the day before the inauguration.

“Since 1998, the first year that IHBG became operational, Congress has provided a consistent level of funding annually in nominal terms—an average of about $667 million per year from 1998 through 2014. During 17 years, however, inflation has seriously eroded that level. The 2014 amount ($637 million in nominal dollars) represented only $440 million in 1998 purchasing power,” according to the report, done for HUD by the Urban Institute.

It is important to remember that the President’s budget is only the first step in what can be a drawn-out process. The budget goes now to Congress, which always makes changes. Programs zeroed out by the Administration can be restored in full. Other programs can be pared down, or pared farther, by Congressional knives.

When there is headbutting between Congress and the Administration, as happened during the Obama years, budgets may not come to a vote at all for extended periods of time, forcing a “continuing resolution” to keep the government operating.

The National Congress of American Indians has included Native housing in its fiscal 2018 budget requests. While NCAI always asks for more than is actually appropriated, their numbers are a useful guide to how much is at stake in the current slash-and-burn mood of the Administration.

NCAI recommends at least $700 million for the Indian housing block grants, with another $70 million for the Indian CDBG. It is looking for $10 million to support the HUD 184 and another $2 million for the Title VI program.

There are Native Hawaiian versions of some of the Indian programs, and NCAI has asked for $500,000 to support the HUD 184A and $12 million for the Native Hawaiian housing block grant.