Washington, D.C. –- (RealEstateRama) — The Arizona Republic today highlighted a new report released by Senator John McCain (R-AZ) that details the findings of a three month investigation into allegations that the Navajo Housing Authority (NHA) mismanaged federal housing grants provided by the U.S. Department of Housing and Urban Development (HUD).
The investigation found that NHA received over $803 million in HUD-issued Indian Housing Block Grants over the last 10 years, but only built a total of 1,110 homes—far fewer than the 34,000 homes that are needed to address the Navajo Nation’s chronic housing shortage. The report’s findings largely confirm and expand upon the findings of a recent investigative series published by The Arizona Republic entitled, “The Navajo Housing Tragedy.” NHA receives the largest share of taxpayer assistance for homebuilding than any other tribal entity in the nation.
The investigation, which was conducted in consultation with the Senate Committee on Indian Affairs, also uncovered previously unreported examples of housing projects that lacked sufficient planning and as a result, experienced substantial cost overruns, which placed taxpayer dollars at excessive risk for waste, fraud and abuse. Furthermore, the investigation found evidence that members of the NHA oversight board used income generated from NHA rental properties for “professional development” travel to locations far removed from the reservation, such as Hawaii and Las Vegas. While the investigation was unable to conclude whether such activities rise to the level of criminal misconduct, the report calls for additional independent review and supports the efforts of Navajo Nation leaders in overhauling NHA’s oversight structure.
“The investigation completed by my office confirms that the Navajo Housing Authority remains a broken public housing agency that is grossly misusing taxpayer funds,” said Senator McCain. “Navajo Nation is facing a housing crisis, but the NHA has not delivered on its promise of providing affordable, livable homes for its people. I am calling on my colleagues in the Senate to join me in holding congressional hearings and developing legislation that advances critical reforms.”
Read The Arizona Republic’s feature on the investigation below, and view the full report here.
By Dennis Wagner and Craig Harris
The Arizona Republic
Friday, June 2, 2017
Sen. John McCain on Thursday released an investigative report on alleged mismanagement in the Navajo Nation’s housing agency that calls for sweeping reforms to protect federal funds and provide adequate homes for tribal members.
McCain, R-Ariz., said the probe by his office “confirms that the Navajo Housing Authority remains a broken public housing agency that is grossly misusing taxpayer funds. Navajo Nation is facing a housing crisis,” he added, “but the NHA has not delivered on its promise of providing affordable, livable homes for its people.”
McCain’s report calls for a new board of directors at NHA, possible cutbacks in Navajo housing funds by Congress, and the creation of a separate agency to handle new-home development for the tribe.
The investigation, done in consultation with the Senate Committee on Indian Affairs, on which McCain serves, echoes and amplifies on an investigative series published by The Arizona Republic beginning in December.
The newspaper found that, since 1998, NHA had received $1.66 billion from the Department of Housing and Urban Development, yet produced an average of just 235 dwellings per year.
Based on NHA and HUD data, the tribal agency at one point built up an unspent reserve of nearly a half-billion dollars. While few homes were built, key projects that did get built were never occupied or had severe problems.
For example, NHA records last year showed 50 dwellings were modernized with $55 million in tax dollars, which works out to $1.1 million each. Twenty-six new homes were built with nearly $20 million, a per-unit price of $750,000.
McCain’s staff reported similar findings: Over the past decade, NHA received $803 million dollars in Native American housing grants, yet built just 1,100 new homes — “far fewer than is needed to address the Navajo Nation’s chronic housing shortage.”
NHA has claimed the Navajo Nation needs 34,100 new homes and nearly as many refurbishments, at a total cost of $9 billion. The agency receives more than $80 million each year for housing.
McCain’s report alleges that, because of poor planning and mismanagement, NHA has failed to spend money it gets and exposed federal tax dollars to “an excessive risk of waste, fraud and abuse.”
Though Senate investigators did not uncover criminal conduct, the report says, their findings “warrant additional independent review and support calls by Navajo leaders for overhauling NHA’s leadership and improving the NHA’s oversight structure.”
NHA Executive Director Aneva “AJ” Yazzie has blamed failures on prior leadership at NHA, and unique development challenges on a Navajo Nation that sprawls over portions of Arizona, New Mexico and Utah. In an interview with Navajo Times last month, Yazzie said The Republic’s reporting contained “inaccurate information and half-truths.”
Navajo Nation President Russell Begaye, who has been pressing for major reforms at the housing agency, said he welcomes the McCain investigation and takes the findings “very seriously,” adding, “Our number one concern has always been that the Navajo people receive adequate housing.”
However, Begaye said he and the tribal council already have initiated corrective actions. He criticized any proposal to cap or cut tribal housing funds.
“We feel this is a mistake because our people who need these homes shouldn’t pay the price for the seemingly inefficient operation or failure of NHA,” he explained. “We are asking that the funding continue at the current level because the need remains critical.”
HUD officials, who launched a separate probe of NHA in March, said that review is not completed.
The Republic obtained a draft copy of HUD’s review. It says department officials found no statutory or regulatory violations and no concerns about NHA program deficiencies. An agency spokeswoman declined further comment. Rodger Boyd, former deputy assistant secretary at HUD — and now a consultant to the tribal Housing Authority — could not be reached.
McCain’s probe found that NHA lacks the planning and capacity to achieve its mission, which is to overcome severe housing shortages on a Native nation the size of West Virginia.
Among the recommendations:
- Congress should consider capping or reducing federal housing allocations to NHA if new home construction does not increase or federal funds remain unspent.
- Replacement of the authority’s board with new members who have professional qualifications. (The Navajo Nation Council and President Begaye already have initiated those changes, with three of five new commissioners appointed so far.)
- The Navajo Nation Council should consider creating a new tribal housing agency for new housing, and limit NHA’s role to management of existing rental units.
- HUD should increase its monitoring of NHA and ensure its performance reports are accurate.
The report says NHA board members spent money on trips to Hawaii and Las Vegas that “created at least an appearance of impropriety.” (The housing authority refused to provide congressional investigators with related accounting records.)
The report also criticizes expenditures on outside consultants and contractors, especially in the planning for a proposed residential development known as Bluestone, in Houck, Ariz.
According to investigators, NHA has spent $125 million over five years to design the project, yet no actual construction has occurred. The report says development stalled because NHA did not do proper market analyses or title searches and failed to ensure a water supply or waste treatment system. Those problems arose despite nearly $14 million in NHA contracts with planning, design and engineering firms.
Yazzie in the past has blamed HUD for a lack of assistance and oversight. McCain’s investigation says, “We disagree with NHA that the fault lies solely with HUD. The problem arises from (NHA) deficiencies in planning and capacity. … The poor administration of (Indian Housing Block Grant) funds by NHA has exposed the program to an excessive risk of waste, fraud and abuse.”