One Way to Help Native Americans: Property Rights

The United States' impoverished tribes cannot buy or sell reservation land. Changing federal policy could improve their fortunes.

It’s May, but snow is falling in southeastern Montana as Ivan Small drives me around the Crow and Northern Cheyenne Indian reservations. Small is the principal of a local Catholic school—his mother was Crow and his father Cheyenne—and over the course of three days, he shows me the land where he grew up. “It didn’t used to be this bad,” he says. He didn’t have indoor plumbing, “but at least there wasn’t so much crime.”

Every few miles, we come upon a group of a dozen or so trailer homes. Broken-down cars and trucks are scattered outside like crushed soda cans. Many homes’ windows are broken, with only a tarp separating the residents from the weather. Children’s toys are piled up haphazardly, mixed with lawn chairs and trash. “A man’s home is his castle,” Small says as we drive.

This is the grinding poverty on some of America’s Indian reservations, many of which resemble nothing so much as small third-world countries in the middle of the wealthiest nation on earth. The 2 million Natives in the U.S. have the highest rate of poverty of any racial group—almost twice the national average. This deprivation seems to contribute not only to higher rates of crime but also to higher rates of suicide, alcoholism, gang membership, and sexual abuse. As of 2011, the suicide rate for Native American men aged 15 to 34 was 1.5 times higher than for the general population. Suicide is the second leading cause of death among Natives aged 10 to 34.

Alcohol-use disorders are more likely among American Indian youths than among any other ethnic group. Involvement in gang activity is more prevalent among Native Americans than it is among Latinos and African Americans. Native American women report being raped two-and-a-half times as often as the national average. 
The rate of child abuse among Native Americans is twice as high as the national average. And each of these problems is worse among the half of Natives who live on reservations.

Many say the federal government is not giving American Indians enough money to combat these problems. As Cecilia Fire Thunder, the former chief of the Lakota tribe on the Pine Ridge reservation, told me, “We are held back by inadequate funding.” When it comes to education, health care, and various other problems on the reservations, she said, “all Congress has to do is honor its treaties.”

Others—often researchers in the academy—argue that American culture does not give Natives enough respect, continuing to traffic in stereotypes when it comes to sports teams and mocking those who claim to have Indian heritage. The American Sociological Association, for instance, passed a resolution calling for sports teams at all levels of competition to cease using American Indian nicknames, logos, and mascots. It read, “The continued use of Native American nicknames, logos, and mascots in sport harm Native American people in psychological, educational, and social ways.”

Neither view is entirely right.

The economic devastation in American Indian communities is not simply a result of their history as victims of forced assimilation, war, and mass murder; it’s a result of the federal government’s current policies, and particularly its restrictions on Natives’ property rights.

Reservation land is held “in trust” for Indians by the federal government. The goal of this policy was originally to keep Indians contained to certain lands. Now, it has shifted to preserving these lands for indigenous peoples. But the effect is the same. Indians can’t own land, so they can’t build equity. This prevents American Indians from reaping numerous benefits.

Instead, Washington continues to send checks and micromanage these communities. The two primary agencies charged with overseeing the activities of Indians who live on reservations—the Bureau of Indian Affairs, or BIA, and the Bureau of Indian Education, or BIE, both part of the Department of the Interior—together have a total of 9,000 employees. That’s one employee for every 111 Indians on a reservation. According to a report from the Cato Institute, federal funding for these agencies’ various programs—which support education, economic development, tribal courts, road maintenance, agriculture, and social services—was almost $3 billion in 2012. About $850 million of this goes to BIE to provide for its 42,000 students, although most children on reservations don’t attend BIE schools. This amounts to about $20,000 per pupil, compared to a national average of $12,400.

Plenty of other federal agencies also have subsidy programs for Indians. For instance, the Indian Health Service, based at the Department of Health and Human Services, had a 2015 budget of over $4.6 billion. And the Department of Housing and Urban Development’s Native American Housing Block Grant Program has a 2015 budget of $650 million.

In recent years, payments from Washington have increased and the size of the Bureau of Indian Affairs has ballooned. But according to most of the people I interviewed on reservations, the problems seem to have become worse. Driving through Lame Deer, the center of the Northern Cheyenne reservation, some buildings were boarded up. Small said there used to be another market and a few other stores when he was growing up.

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“Free money.” That’s what Karl Little Owl, a Crow legislator, calls the funds coming from the government to build the Apsaalooke Warrior Apartments. The first development project on the reservation in a decade, Apsaalooke will be an $8-million, 15-bed veterans’ home, according to a sign at the groundbreaking ceremony.

The development wouldn’t have been possible without a combination of federal, state, and private donations. The Crow tribe is broke, Small said, for a variety of reasons. There’s next to no economic activity on the reservation. On the Northern Cheyenne Indian Reservation in Montana, the unemployment rate is 78 percent. According to the BIA, unemployment on the Crow Reservation is 46.5 percent.

The tribe, according to its leadership, owes HUD about $3 million. In the 1990s, the agency built most of the homes on the reservation, and the tribal leadership promised to exact a small monthly payment from each homeowner in order to repay the debt. Conrad Stewart, who used to work in the tribal housing once and now chairs the Natural Resources Infrastructure Committee for the tribe, said that the payments were to be between $20 and $30 a month.

The tribe members refused to pay, and now the situation is getting bleaker. HUD, the tribal leaders said, refuses to build any more homes until the money is paid back. And so no homes are being constructed or repaired. Instead, more and more people are moving into each small trailer home. The result is that many tribal members between the ages of 18 and 40 “don’t have homes,” according to Stewart. 
When the tribal government attempted to pass a law that would require people to pay their debts, many legislators were voted out of office.

But what choice do Crows have? Almost no one on the reservation can afford to build a home, because no one can get a mortgage. And no one can get a mortgage because the property on the reservation is held in trust by the federal government; most of it also is “owned” communally by the tribe. No bank could ever foreclose on a property, because the bank can’t own reservation land. The Bureau of Indian Affairs can determine what is “fair market value” for a piece of property and prevent one party from selling land to another. “We are the highest regulated race in the world,” said Stewart.

Indian reservations, Terry Anderson and Shawn Regan wrote in Louisiana State University’s Journal of Energy Law and Resources, “contain almost 30 percent of the nation’s coal reserves west of the Mississippi, 50 percent of potential uranium reserves, and 20 percent of known oil and gas reserves”—resources worth nearly $1.5 trillion, or $290,000 per tribal member. Tragically, “86 percent of Indian lands with energy or mineral potential remain undeveloped because of federal control of reservations that keeps Indians from fully capitalizing on their natural resources if they desire.”

There are Natives who worry that too much development will be harmful to their traditions. Winfield Russell, of the Northern Cheyenne tribal council, said he worries that development of the land “will undermine or destroy Native culture.” Russell said he sees a strong connection between the untouched land and the tribe’s spiritual values. Unlike many other tribes, he said, “we’re still strong here as far as our ceremonial culture and spirit on the reservation. We still have our covenant here.”

Yet, Indians have long suffered from what the Nobel Prize–winning economist Hernando de Soto has called “dead capital.” They may possess a certain amount of land on paper, but they can’t put it to use by selling it, buying more to take advantage of economies of scale, or borrowing against it.

Over the years, the federal government has carved out some ways for Indians to make money. For example: They used to be able to sell cigarettes tax-free on the reservation. But in 2010, with the passage of the Prevent All Cigarette Trafficking Act, that came to an end.

By that point, many tribes had already started to get into the gambling business. Most Indian casinos are dinky affairs. But the Senecas have made over a billion dollars on their gaming operations. Those profits are distributed to tribe members in the form of annuities. According to Lucille Brooks, who runs the Seneca Nation of Indians Economic Development Company, “The annuities have created an entitlement attitude, and that is the downfall. The annuities have enabled people not to work.” The basic standard of living of many of these casino-owning tribes has risen slightly, but it has not spurred much improvement in a decrepit educational system or even investment in other businesses.

Now that more and more states are opening up gambling to non-Indians, tribes are facing increased competition. The Seneca Nation has offered low- or no-interest business loans to anyone who wants to try some other enterprise, but there are almost no takers. Michael A. John, the manager of the Small Business Incubator Program on the territory, said his group conducted a survey to find out which businesses residents should open. He tells people there are too many pizza places around, instead recommending “outdoor recreation, maintenance, landscaping, and professional massage.” But this kind of guidance has not yielded much result.

Federal legislators have pushed certain reforms, including a stricter ban on the development of natural resources on Indian land; more payments—perhaps even “reparations”—from the federal government to tribes; and greater sensitivity toward Indian culture, including an embrace of tribal languages and the changing of football-team names. But this is not always the primary concern of Natives. As a recent Washington Post survey concluded, most American Indians are not offended by the term “Redskins”—the name of D.C.’s football team. In interviews, I couldn’t find a single native who mentioned sports-team names as an important issue facing American Indians today. While I did read one editorial in a reservation newsletter arguing against the celebration of Columbus Day, I couldn’t find anyone who wanted to discuss the issue further.

While researchers have argued that team names such as this impair Native youths’ self-esteem, many of those young people have grown up in poverty, living with one or no parents, often exposed to adults who have problems with drugs and alcohol. When these young people have few educational options and little hope of employment ahead of them, it seems ignorant, if not offensive, to focus solely on the names of sports teams, if that distracts from addressing more serious problems.

The people I met on reservations were not suffering because others don’t understand their heritage or know their tribal language. What American Indians need are real property rights. A number of tribes in Canada are pushing legislation called the First Nations Property Ownership Act, which would create the legal framework for individual members of First Nations to access capital through secure property rights. Leaders like Manny Jules, the former chief of the Kamloops Band in British Columbia, Felix Arnouse, the chief of the Little Shuswap Band, and Michael LeBourdais, the chief of the Whispering Pines Band, all support the legislation.

They see reserve land, which is treated similarly to our reservations here, as becoming more like cities. The underlying title would be turned over to a governing entity; even if the land were sold, it would remain part of the city, just as no one can sell a part of New York City to Newark. But individuals of any race would be able to buy and sell it among themselves, without the permission or oversight of tribal or federal officials. This would allow for a true free market. First Nations members who wanted to lease their land for the development of natural resources would be able to do so without seeking permission from the national government. And those who wanted to sell their property would be able to select the highest bidder, regardless of race, take that money, and put it to use for themselves and their families. Finally, those who wanted to keep their land would be able to borrow against it to build a home or start a business.

There are some First Nations leaders in Canada who are skeptical of this plan. They worry that it will lead to greater assimilation, which they see as damaging to Native culture. They would be sorry to see a plot of land long occupied by one family sold to outsiders. Some worry that non-Natives will simply take the land illegally. But Jules has promised that even if the legislation passes, tribes would have to “opt-in.” Moreover, tribes would retain autonomous rule over the land, even if a particular plot passed into the hands of a non-Native.

Whether such a solution would work in the United States is a complicated legal question. But considering such reform is the first step toward helping these communities move forward.

For some tribal leaders, this kind of move would actually be a way to embrace their tradition. Jules, who has been leading the fight for the legislation in Canada, explained, “In my community, we have some of the oldest pit-house sites.” Pit houses were permanent structures requiring considerable time and resources to build. “They were nice and toasty warm in the winter. In the summer we went out and gathered salmon, berries, wild vegetables, and hunted game. In the winter we came back to settled villages. There is no way we would have left and come back to allow some other family to live in our pit house.” Individual ownership of land and resources is not some foreign Western tradition that will undermine the values of American Indians. As Jules said, “Property rights are part of indigenous culture.”