The development conundrum: Why is housing so hard to build in Indian Country?

Housing insecurity touches almost everyone in tribal communities in Montana. Its causes and consequences are deep-rooted, confoundingly complex, and often overlooked.

This three-part series, The Shelter Gap, explores Indian Country’s housing crisis by examining the barriers residents and developers face in buying, renting and building homes, investigating the root causes of chronic housing shortages on reservation land, and highlighting what’s possible when residents achieve stable housing. 

Part 2 traces current housing shortcomings and challenges on reservation land to more than a century of historical and conflicting federal policies that have created almost insurmountable impediments to development in Indian Country.  

BLACKFEET RESERVATION — The painting hangs on a wall in Blackfeet Community College President Brad Hall’s house. 

“I like it,” said Hall’s father, Ted, a retired Bureau of Indian Affairs superintendent. “Because I like the truth.” 

“Allotment Act,” by Blackfeet artist Wilbur Blackweasel, depicts a Native couple driving a horse-drawn cart through an open landscape. In the ground in front of them is a metal stake marking their assigned parcel. 

The General Allotment Act of 1887 (also called the Dawes Act) authorized the president of the United States to divvy reservation land into allotments for distribution to individual tribal members. Tribal land that was not allotted was deemed “surplus” and opened to non-Native settlement. Allotment supporters argued that private ownership and agriculture would assimilate Native Americans into White economies and society. 

The policy devastated tribes, disrupting communal ownership traditions and ultimately taking more than 90 million acres of land out of Native American control. The act would later be condemned for contributing to severe health problems and widespread economic instability in tribal communities.  

Hall likes to imagine what the figures in the painting might have been thinking when they arrived at their parcel. 

“She’s probably going, ‘Oh my god, what did we get ourselves into?’” Ted Hall said on a warm evening in August. “He’s probably thinking, ‘Now what?’” 

The current landscape of reservation housing is defined by long wait times for low-income rentals, overcrowding in subpar conditions in existing housing stock, and demand that far outpaces chronically short housing supplies. With demand high, and plenty of land, why can’t developers build new housing to close the gap?

The answer, at its most basic level, is that a patchwork of historical and conflicting federal policies including the Allotment Act have congealed over the course of more than a century into an unwieldy system of property ownership on reservations that creates often impassable roadblocks to development. 

Banks and commercial builders have not learned to effectively navigate the legal, bureaucratic and financial peculiarities of that system, and they’re rarely incentivized to do so. That leaves federally funded tribal housing authorities as the main developers of housing on reservations, and they don’t have access to the kind of money necessary to make a dent in the housing shortage on their own.  

THE TRUST LAND CONUNDRUM

After a federal report blamed the Allotment Act for deteriorating conditions in tribal communities, President Franklin Roosevelt in 1934 signed the Indian Reorganization Act, ending allotment. Significantly, the IRA also allowed the Interior Secretary to acquire land in trust for the use and benefit of tribes. 

Most reservation land in Montana, including some allotted land, is what’s now called “trust land.” The federal government holds about 56 million acres of trust land for Native American tribes nationwide. Experts describe trust land as foundational to tribal sovereignty.

“Without land, you don’t self-govern,” said Caroline LaPorte, an attorney with the Indian Law Resource Center, a national nonprofit law and advocacy organization.

But trust land’s distinctive ownership status comes with consequences that complicate how the land can be used. 

Transactions involving trust land are delayed by layers of government bureaucracy that don’t apply to standard property sales and leases, and the complex ownership structure of reservation land complicates the bank lending that helps developers build and homeowners buy.

While tribes or individual tribal members own trust land, the U.S. government holds title to the property. That configuration means that trust land is not taxed or regulated by state or local governments. It also means that federally regulated banks struggle to assess the market value of trust land, and are unable to repossess trust land if an owner defaults. 

That makes it difficult for prospective homeowners and homebuilders to secure a mortgage or construction loan, and for developers to finance projects on trust land. 

The hesitancy of banks to lend money in Indian Country is well established. A Government Accountability Office report found that from 1992 to 1996, lenders made just 91 conventional home-purchase loans to Native Americans on trust lands nationwide. The report found that lenders were uncertain whether they could foreclose properties on trust loans, had difficulty understanding different types of land ownership, and were unfamiliar with the tribal court systems where foreclosure litigation would occur.  

While tribal leaders have since worked with Congress to enact a number of policies to ease burdens on lenders and incentivize lending to Native Americans on trust land, inequalities persist. Established in 1992, the federal Section 184 Indian Home Loan Guarantee Program makes lenders whole if a borrower defaults on tribal land, which can include trust land. From 1994 to May 2015 the program provided 28,837 mortgages totalling $4.7 billion. But trust land properties accounted for only 3,612 of those loans, amounting to $482 million, according to a 2017 federal report. Because Section 184 loans on trust land require government oversight of many transaction processes, surveyed lenders said the program continues to present “daunting administrative barriers.” 

Don Sterhan, a member of Gov. Greg Gianforte’s Housing Task Force and CEO of Billings-based CR Builders, which builds affordable housing nationwide using the federal Low-Income Housing Tax Credits program, says securing loans on trust lands often requires developers to “finesse” conversations with tribes and lenders to get a project financed. 

“That can be a tricky thing,” he said.

Even when financing for trust land is secured, federal bureaucracy can slow transactions to a snail’s pace. As the managing agency of trust lands, the U.S. Bureau of Indian Affairs is often required to approve leases and provide title status reports when homes are bought, sold, or built on trust lands. BIA approval processes are famously slow and opaque. 

Maria Cohen, a real estate broker and tribal housing consultant in Arizona, said she recently closed on a trust land transaction she’d been working on for four years. 

Off-reservation, where the bureaucratic entanglement of BIA oversight is absent, “that would never happen,” she said.

Carla Clark, chief of the BIA Office of Trust Services’ Division of Real Estate Services, said in an emailed statement to Montana Free Press that the agency “is working to address and improve processing delays.” 

UTILITY GAPS

Navigating the bureaucracy that entangles trust land isn’t the only hurdle facing developers who want to build in Indian Country. 

When assessing the feasibility of a development site, Sterhan said, CR Builders typically requires the presence of utility services like water, sewer, electricity and gas. If that infrastructure isn’t available — as is the case in much of Indian Country — many builders will pass.

“That would be a dealbreaker for us,” Sterhan said.  

Inadequate utility infrastructure is a widespread issue in Indian Country. A 2017 federal study found that 34% of Native American households on tribal land had one or more plumbing, kitchen, electrical or heating deficiencies, compared to just 7% of U.S. households. In Montana, the issue is even more severe. A 2018 survey of more than 300 Northern Cheyenne Reservation residents reported that 15% did not have electricity in their home, 19% did not have hot running water, and 9% did not have heat. 

Installing electrical service, roads or water infrastructure can require an investment of tens of millions of dollars, the negotiation of access easements across neighboring properties saddled with their own complicated ownership status, and multiple lengthy approval processes. 

Missoula-based real estate sales professional and former legislator Adam Hertz, who also serves on the governor’s Housing Task Force, said that putting a developer on the hook for installing utility infrastructure from scratch “can make a project not workable.” 

Developers also need to know who owns the land they wish to develop, Sterhan said. And that question can be nearly impossible to answer in parts of Indian Country, where the Allotment Act created a tangled history of land ownership. 

During the era (1887 to 1934) in which the federal government allotted tribal land into individually owned parcels, many Native Americans did not write in English, and often did not leave wills. If a Native landowner died without a will, their land was distributed among their heirs as undivided interests with title held in trust by the government. Across the course of generations, ownership of allotted land became progressively more fractional. Today, hundreds or even thousands of people may hold partial ownership of a single plot of land — and a legal interest in any transaction involving that land. 

“A lender may have to get approval of up to 200 people to get a mortgage originated,” one lender told researchers in the 2017 federal study on mortgage lending in Indian Country. “There is no simple way to do this — you have to hunt them down and get approvals.”

These compounding barriers stand in the way of developers building housing stock in Indian Country, despite the well-documented need for it. A 2017 U.S. Department of Housing and Urban Development report — the most recent comprehensive federal study of housing in Indian Country — found that from 2013 to 2015, tribal communities nationwide would need about 68,000 new housing units to alleviate overcrowding and replace inadequate units. 

FEDERAL FUNDING FALLS SHORT

Because commercial development is so fraught with roadblocks, tribal housing authorities are the dominant developer on most reservations in Montana. But while they are better equipped by experience to navigate federal bureaucracies and the complexities of trust ownership, they are chronically underfunded to fulfill their missions. 

Tribal housing authorities, which primarily provide low-income housing to tribal members, are largely funded through the Indian Housing Block Grant, a program established by the 1996 Native American Housing Assistance and Self-Determination Act (NAHASDA). 

Tribal housing leaders have long said funding for the program is inadequate. From 1998 to 2014, Congress essentially flat-funded the block grant program, allocating an average of about $667 million per year across hundreds of eligible tribes and tribal housing authorities nationwide. While Congress continues to fund the block grant each year, it has not reauthorized NAHASDA since the act’s 2008 authorization expired in 2013, and recent efforts to do so have failed. Reauthorization, tribal housing leaders say, would not just guarantee future funding but would also incorporate much-needed reforms. U.S. Sens. Brian Schatz, D-Hawaii, and Lisa Murkowski, R-Alaska, recently filed a NAHASDA amendment to the Senate’s fiscal year 2026 National Defense Authorization Act, often considered “must-pass” legislation, that would reauthorize NAHASDA through 2032. National American Indian Housing Council Executive Director Rudy Soto said in an email to MTFP that new provisions in the proposed legislation would “cut red tape so homes can be built more quickly, expand housing opportunities for Native students and veterans and give families greater security on their land.”

Tribal housing leaders said current federal funding is frequently inadequate to maintain existing housing, let alone build new homes. Lack of funding, they say, is why wait lists for low-income reservation housing can be years long. And it’s why many existing reservation homes that require renovation are boarded-up and vacant.

The Chippewa Cree Tribe of the Rocky Boy’s Reservation in north-central Montana was allocated $3.6 million in Indian Housing Block Grant funding for fiscal year 2025. A community survey revealed that in 2018 the Chippewa Cree Housing Authority had more than 700 people — nearly 20% of the reservation’s population — on its wait list for housing. But before the tribe can build new homes, it will have to expand the reservation’s water infrastructure, which could cost tens of millions of dollars the tribe doesn’t have.

“Money,” Chippewa Cree Housing Authority Director Allen LaMere said, “is the biggest fix to any problem.”

Renderings taped to a wall outside the agency’s conference room map an ambitious 100-year housing plan for the reservation. The goal, LaMere said, is for every reservation family that can sustain a home to have one. 

Until then, he said, “We do the best we can with what we have.”

Part 3 of The Shelter Gap, publishing Friday, Oct. 3, highlights the community-wide benefits that become possible when reservation residents are able to access secure and adequate housing.