Dennis Wagner and Craig Harris

The Arizona Republic

If the Navajo Reservation were a state, it would be the poorest in the nation, with the highest rates of poverty and unemployment. Its housing need might be more acute than anywhere else, too.

Almost 20 years ago, a study estimated nearly 21,000 families on the Navajo Reservation needed new homes. More than a decade later, despite hundreds of millions of tax dollars allocated, that number had only grown — to more than 34,000.

An Arizona Republic review of housing records from the Navajo Housing Authority showed why the numbers weren’t getting better.

Amid years of mismanagement, failed projects and wasted tax dollars, the NHA only sporadically has built homes on tribal trust lands that cover nearly all of the sprawling reservation. For several years, they built none at all.

Aneva “AJ” Yazzie, the Housing Authority’s chief executive, says she took over a dysfunctional agency and had to put construction on hold. After nine years leading the agency, she blames a lack of progress partly on “almost insurmountable” development impediments for her agency and private developers.

Indeed, cases of mismanagement and shoddy construction aside, there are other reasons it's so hard to start new housing on the reservation. Studies have documented more than two dozen impediments. Among them:

The perception that the 27,000-square-mile Navajo Reservation is wide open to development is false.

Most of the land is too rugged, or without roads, infrastructure, nearby jobs or shopping.

Even where dwellings might be built, legal permission can be nearly impossible to secure.

More than 90 percent of the reservation technically belongs to the U.S. government, managed under a trust by the Bureau of Indian Affairs. Less than 1 percent is “fee-simple property” owned by individuals who can freely sell their land or build on it. Environmental, archaeological and other permits also are needed.

Private-property owners who meet zoning requirements can get a permit and start construction.

But on trust lands, Navajos may apply only for long-term housing leases. Those wanting a home must get approval from officials at local Chapter Houses — there are 110 across the reservation — and the tribal Land Department.

Individual homes can take much longer to build than the three to five years to complete an NHA-approved housing development.

Much of the reservation also is subject to grazing rights held by legacy sheep and cattle ranchers. Those permit owners have de facto veto power over development, and view the mesas, canyons and ranges as a family heritage.

Congress adopted a law in 2000 intended to make it easier to build on Navajo trust lands. Experts say it didn’t work.

On the reservation, 44 percent of adults have not finished high school and only 7 percent have college degrees.

HUD forms and real-estate documents can be intimidating to elder Navajos whose first language is Dine, even though the NHA assists residents with filling out government forms.

In non-Indian communities across America, private developers build homes and offer them for sale to the public.

Such projects are rare on the Navajo Reservation. Some Dine want to live in scattered housing on ancestral land.

They can lease property, typically an acre, for $1 a year. But lack of power, water, roads and services — not to mention a dearth of nearby jobs — can make home construction insurmountable. Without economies of scale, development costs skyrocket for both the NHA and private developers.

There are no major contractors based on the reservation. It is a struggle finding outside companies to build remote projects that require worker accommodations and long-distance delivery of construction materials.

Finding buyers or renters who meet eligibility requirements is another dilemma.

To live in or rent HUD-subsidized housing, a resident can pay no more than 30 percent of income.

Just 22 percent of adults have full-time jobs, according to a 2011 report done for the NHA by RPI Consulting, a Colorado land use and economic policy firm. About half have no work at all.

And 49 percent of Navajo Nation households report annual incomes less than $25,000. For them, that means $7,500 a year or $625 a month is the most they can qualify for.

There is no minimum amount an applicant has to pay for NHA housing. And, theoretically, the agency could outright give someone a home if the person qualifies, according to a HUD spokeswoman.

Still, even with government subsidies, families may have trouble keeping an NHA home by not having the income to pay living expenses. And residents who qualify based on financial need still have to pass credit screening and background checks.

For years, the NHA and its roughly 365 employees were overwhelmed.

Staff turnover is chronic. New employees often lack expertise. Lack of decent housing and jobs creates a brain drain, siphoning away the tribe’s most educated and employable members.

And, at least in the past, lax federal oversight seemingly allowed mistakes to persist.

Private developers have difficulty getting lending institutions to back Navajo home projects or mortgages. Lenders also are hesitant to finance homes for individual tribal members.

Financing on the reservation can be complex. Profit margins are slim. Outsiders are unable to resolve disputes under U.S. law and must go through sovereign tribal courts.

The 2011 RPI Consulting report echoed independent studies saying the reservation has a “low-functioning real estate market,” in part because “most banks are wary of making loans against property they cannot collateralize.”

Therefore, there’s an added burden to rely on the NHA because Navajos have little access to traditional financing for homes.