With $32 Billion in Aid, Native Americans Push Against History of Neglect

TUBA CITY, Ariz. — Cortez, a Colorado town of about 9,000 people tucked near the San Juan Mountains, has the trappings of a humble but healthy small-town economy: bustling businesses, congenial single-family homes, a park with grassy fields, a public pool, playgrounds, a pond and skate ramps.

A couple of hours southwest is Tuba City, Arizona, the largest community on Navajo Nation tribal lands. It has roughly the same population as Cortez, and it is surrounded by the same sandstone and mesa-filled terrain. But despite the area’s rich history of trade and its proximity to thriving cities like Flagstaff and tourist sites like the Grand Canyon, widespread poverty and a lack of public services are notably entrenched — the stark reality across many reservations throughout the country.

Gas stations, dollar stores and fast-food chains fill most of the skinny commercial strips. RV trailers and other mobile homes make up much of the housing stock. One in three Navajo households has income below the federal poverty line. Red dust whiffling in from desert winds tends to be more common than the dust stirred up by builders.

At the town’s center, though, is a recent exception: the construction of a 5,500-square-foot senior center, whose $5 million cost is partly financed with about $1 million from the American Rescue Plan Act, passed in 2021.

That package, primarily meant to address the economic and public health crises caused by COVID-19, included $32 billion in short- and longer-term assistance for tribes and reservations: aid for households and tribal government coffers, community development grants, health services and infrastructure; as well as access to the $10 billion State Small Business Credit Initiative program, which previously excluded tribal nations.

Collectively, those funds could help develop businesses, roads, water lines, schools, health care centers and high-speed internet availability. They represent a major reversal from past federal policies, direct and indirect, that limited economic development of tribal lands.

It was only in 2009 that the so-called Bennett Freeze of 1966 was officially repealed. The freeze, a U.S. Bureau of Indian Affairs ruling regarding a land dispute, banned infrastructure development and most basic repairs — from gas, water and sewer lines to home renovations — in the heart of western Navajo Nation, affecting an area larger than Delaware.

“It’s no question — the American Rescue Plan is the most well-resourced and comprehensive economic plan ever for tribal governments,” said Gene Sperling, who served as a White House senior adviser until August, leading coordination of the plan’s rollout. He added, however, that the investment “is coming after so many decades of shameful neglect.”

As of this summer, Change Labs — a nonprofit that works to finance, train and consult Navajo Nation startups — became one of two administrators for Navajo Nation’s new branch of the Small Business Credit Initiative program, reviewing and approving federally backed loans of up to $1 million with the help of private lenders. (Larger loans will be processed through the Navajo Division of Economic Development.)

In the context of the long history of harsh financial struggles in Indian Country, the lending kick-start is both an enormous shift and barely a budge.

Heather Fleming, a Navajo Nation member and the executive director of Change Labs, said the lack of infrastructure remains the “daily struggle” for those pursuing business on reservations.

“A lot of the primary issue comes to the fact that we can’t access our own land; we live on it, but we don’t own it,” Fleming, 45, said. That inhibits the ability of tribal governments to tax and fund public services — and the ability of would-be entrepreneurs to use property ownership to build individual wealth.

Most of the more than 570 tribes in the country have no significant revenue from commercial or residential property taxes. That’s because the federal government technically owns the lands on which tribal nations reside, holding them “in trust.”

A report from the Biden administration also notes that on trust lands, “the secretary of the interior must approve nearly all land-use transactions, including leasing to potential homeowners, consolidating and selling trust land, and business development.”

Issuing municipal bonds is another way state and local governments fund their priorities to support growth. But tribes remain legally barred by the U.S. tax code from issuing these types of bonds for anything other than “essential government functions.”

That has constrained development of the sort of public amenities that foster growing businesses and provide a foundation for upwardly mobile workers.

Fleming of Change Labs notes that reservations have a “huge economic leakage problem.” And it is not lost on her that she is an example of it. After growing up on the reservation, not far from Tuba City, she left to attend Stanford but said she always “wanted to go home” eventually and help “solve problems on the reservation.”

Founding Change Labs in 2019 was the culmination of that pursuit. The nonprofit — supported by foundation grants, donors and income from its consulting and its small-loan program — is based in Tuba City.

But Fleming and her husband live in Denver — attracted, like tens of thousands of other college-educated professionals, to the social and professional connections, school systems and private real estate value that a flourishing city can provide. She directs operations remotely and commutes eight hours to northeast Arizona for meetings several times a month.

On an August afternoon, a cohort of native entrepreneurs and small nonprofits receiving consulting help from Fleming gathered with her for mocktails and snacks at Change Labs — a brightly colored hillside workspace resembling the offices of California startups where Fleming came of age professionally.

Posters advertise cheery concept images of what revitalized main streets in Navajo Nation could look like. Brochures provide information and contacts about foundations, social impact investors and government economic development offices. The whiteboard in a glass-walled room still displays a flowchart from a morning session outlining potential revenue models for proprietors.

Among those sharing chips, homemade dips and stories was Kelsey Lee, a photographer who graduated from Northern Arizona University in 2013 and owns a media production company with her husband, Algernon Sakiestewa Jr.

Lee, who lives a few miles south in the Navajo Nation town of Cameron, finds herself at the center of three overlapping issues affecting natives in their prime career years on reservations. There are the barriers to homeownership; the tension of seeing friends and family members, like her older brother, leave to chase opportunities elsewhere; and even resistance to change within tribal ranks.

Among younger generations, Lee argues, there are complaints that distrust of capitalists among tribal elders — who tend to have a large say in greenlighting or halting private projects — can shoo away entrepreneurs and employment opportunities.

That aside, people on reservations generally cannot secure a conventional home mortgage. That caps what is typically a key source of household and generational wealth for most Americans. And because homeownership can be a critical source of collateral for small-business loans, access to capital is also heavily curbed.

“We tried to get a loan for the media company,” Lee said. They were turned down. “We had no collateral. The only thing we really own is our equipment.”

With Fleming’s help, they got the business off the ground with “kinship loans,” as Change Labs calls the lending it provides. They are loans of up to $10,000, with no collateral needed at a 5% interest rate, which Fleming said is meant to “create the financial infrastructure you need to secure future loans, investments or grants,” largely based on character assessments and the viability of proposed plans.

“We always get the question of why not move to California or Austin or even New Mexico, where they have an emerging film scene,” Lee said.

Aging elders on both sides of their family are part of the reason. “We want to be able to be close enough to spend time with them regularly,” she said, especially as parents of a 7-year-old daughter and a newborn son.

But paradoxically, they also feel a pioneering spirit in staying put.

“It’s easy to move away from Cameron — or any other reservation community — to a large city; get a job with consistent pay; have access to child care, grocery stores that are around the corner, even housing that is ready to move in,” she said.

“But it feels like if we don’t do it, no one’s going to do it, you know?” she added. “Like, if we don’t try and help create an economic basis or grounding, then no one’s going to do it, because no one has done it yet.”

It can sound tautological: Few people are staying because few people are staying. But economic theory, and practice, indicate a core truth to such feedback loops for local economies. Whatever their size, they depend on a virtuous cycle of agglomeration: the growing concentration of people, industry, infrastructure and culture that turns places into self-sustaining ecosystems.

Reversing the drain of capital, if it were to happen, would take decades — and require private enterprise, not just government spending.

Chief Lynn Malerba, the first Native American treasurer of the United States, who leads the newly established Office of Tribal and Native Affairs within the Treasury Department, said she viewed the American Rescue Plan funds for native communities as “a down payment” for recompense of centuries of loss.

Structural improvements, however, tend to take time. According to the U.S. Treasury, more than 95% of the American Rescue Plan funds dedicated to tribal governments have been “obligated” for a specific purpose (meaning legally committed or contracted to be spent). But much of the money — dripping through local political bottlenecks, contract bidding and so on — has not yet been spent. Tribes have until the end of 2026 to use the funds.

“I feel like I’ve seen no impact so far,” said Laris Manuelito, a military veteran and aspiring entrepreneur working with Change Labs who also attended the mocktail party.

Living in a food desert on the other end of the reservation in northwest New Mexico, Manuelito, 49, dreams of opening a solar-powered Whole Foods-style supermarket and cafe that has a shaded flea market in the front lot. “A third place,” she said, in a region that lacks many.

She was happy to hear that Indian Country was included in the State Small Business Credit Initiative as part of the American Rescue Plan. And she will be applying for a $5 million slice of the initial $90 million awarded to Navajo Nation this year through that program. The tribal government will start evaluating applications this fall.

Manuelito, standing near the punch bowl, wearing a mix of traditional Navajo clothing and beads with her black pantsuit, said she understood the odds against achieving her dream business. But she maintains an attitude of joyful defiance.

“I am not daunted whatsoever,” she said with a smile. “For me, it’s not a matter of if; it’s a matter of when and how.”

This article originally appeared in The New York Times .