Privatizing the Reservation?

• Author: Carpenter, Kristen A.

Abstract. The problems of American Indian poverty and reservation living conditions have inspired various explanations. One response advanced by some economists and commentators, which may be gaining traction within the Trump Administration, calls for the "privatization" of Indian lands. Proponents of this view contend that reservation poverty is rooted in the federal Indian trust arrangement, which preserves the tribal land base by limiting the marketability of lands within reservations. In order to maximize wealth on reservations, policymakers are advocating for measures that would promote the individuation and alienability of tribal lands, while diminishing federal and tribal oversight.

Taking a different view, this Article complicates and challenges the narrative of Indian poverty and land tenure advanced by privatization advocates. We focus on real estate and housing in Indian Country to make three points. First, we argue that the salience of Indian homelands as places of collective religious significance, socioeconomic sustenance, and territorial governance has been lost in the privatization debate, which also largely disregards issues of remedial justice associated with conquest and colonization. Second, we introduce to the legal literature new empirical data and economic analysis from the Native Nations Institute demonstrating that the current system of land tenure in Indian Country is much more varied, and recent innovations in federal-tribal housing and finance programs are more promising, than some of the calls for privatization would suggest Finally, using specific examples from Indian Country, we highlight a model of indigenous self-determination and sustainability, rooted in the international human rights movement, that deserves attention in ongoing domestic policy debates about land tenure, and which has the potential to advance the well-being of humanity more broadly.

Table of Contents Introduction I. A Legal and Cultural History of Land Tenure in Indian Country II. Privatizing Indian Country A. Innovations in Indian Country Housing B. Assessing Federal Statutory Programs 1. The Housing and Community Development Act of 1992 2. The Native American Housing Assistance and Self-Determination Act (NAHASDA) 3. The Cobell settlement and Indian Reorganization Act section 5 4. The HEARTH Act III. Self-Determination and Sustainability A. Indigenous Worldviews and Property Laws B. The Human Rights Paradigm: Self-Determination and Sustainability 1. Self-determination 2. Sustainability C. Examples from Indian Country 1. Ho-Chunk: sustainable economies and pragmatic Innovation on the reservation 2. Citizen Potawatomi: institution building and economic development following a legacy of removal 3. Penobscot: finance and culture after land claims 4. Kanatsiohareke Mohawk Community: healing the land and the people Conclusion Introduction

In popular culture, American Indian reservations often appear as islands of neglect and despair. (1) These depictions draw from grains of truth, some of them quite devastating. Last winter on the Pine Ridge Reservation in South Dakota, for example, a twelve-year-old girl reportedly attempted suicide because she was freezing. (2) Many Indian reservations are plagued by high rates of poverty, (3) along with substandard housing, poor health, crime, and other social ills. (4) The problems of Indian poverty and living conditions on reservations have inspired various explanations. But one account, advanced by economists and commentators, (5) has started to gain traction and is now seen as part and parcel of an apparent desire to "privatize" Indian lands. (6) The argument is that reservation-based Indians don't have "property rights," which, in turn, shackles them and inhibits their ability to create wealth. (7) To address this issue, a long line of scholarship, led most prominently by Terry Anderson, has argued for increased individuation and alienability--and diminished federal responsibility--with respect to tribal lands and resources. (8) While the place of Indian lands seems longstanding, even permanent, in the United States, (9) these calls for modifications to the Indian land tenure system deserve serious consideration. The issue is particularly pressing in light of recent, significant changes in the political leadership in the United States.

Most recently, Indian lands and resources have become targets of the Trump Administration's development agenda. (10) One of the first moves by the Administration was an attempt, still pending in the courts, to vastly shrink Bears Ears National Monument. (11) Under the Obama Administration, Bears Ears was set aside in a unique tribal co-management program to protect the petroglyphs, monuments, and landscapes that are sacred to the tribes of the region. (12) But the designated area is also rich in natural resources, (13) and as the New York Times recently revealed, the Trump Administration's decision to diminish the National Monument and its protections for tribal culture was motivated by a desire to foster oil extraction. (14) Many other tribes control similar lands rich in natural resources that players in the extractive industries would almost certainly like to access with less regulatory oversight. (15) With respect to Indian reservations, President Trump's acting Assistant Secretary for Indian Affairs testified in favor of a controversial bill that would, upon request of an Indian tribe, require the Interior Department to take reservation land out of trust and put it in "restricted fee" status. (16) More recently, the new Assistant Secretary issued a decision regarding the Mashpee Wampanoag Tribe that "pave[d] the way for a reservation to be taken out of trust for the first time since the termination era." (17)

Given that President Trump has expressed a desire to privatize everything from national parks to air traffic control, (18) and given the unpredictability and volatility of the current political landscape, it is difficult to know how seriously to take this threat or how extensive the scope of its impact might be. Yet in light of the resonance between this political conversation on privatization and the extensive body of scholarship arguing for more private property rights in Indian Country, there are important issues worth considering here. Among other things, privatization could have disproportionate impacts on Indian tribes, which are already under extreme stress, with conditions only made worse by the recent government shutdown. (19) Moreover, the President has long been on the record criticizing successful Indian economic development initiatives. (20) Thus, there is healthy skepticism about whether the advocated free-market approach to tribal property is based on a genuine concern for Indians' wealth or well-being. (21)

To fully understand what privatization might mean in Indian Country, consider the scope of tribal nations, their lands, and their governance systems. There are 573 federally recognized Indian tribes in the United States. (22) Together, federally recognized tribes occupy more than 300 Indian reservations in addition to more than 200 Alaska Native villages and certain other lands, which together comprise almost 4% of the total land area of the United States. (23) There is enormous variation between tribes in every respect, including quantity and type of land holdings, population size and demographics, and governance systems, to give only a few examples. (24)

Furthermore, Indian nations are sovereigns within the federal system: They have extensive powers of self-governance and autonomy in internal relations; (25) have their own constitutions, laws, and court systems; (26) and assert inherent civil and criminal jurisdiction over their territories, albeit with some important limitations. (27)

Much of the tribal land in the United States is held in trust for Indian tribes by the federal government. (28) This means that title is split: The federal government holds "ultimate title" for the benefit of Indian tribes, which hold "title of occupancy." (29) Under this arrangement, the government helps protect the tribal land base by prohibiting alienability (30) and restricting certain leases of those lands without federal approval. (31) Although there are federal statutes in place to address concerns raised by the trust status of Indian lands, it may nevertheless be more difficult to use trust lands as loan collateral than fee lands. (32) The duty to protect Indian tribes is rooted in treaties, (33) but its evolution has largely been developed through U.S. Supreme Court jurisprudence (34) and embodied in numerous federal statutes. (35) As of 2010, Indian reservations and lands held in trust by the federal government constituted approximately 70 million acres, a figure that includes the approximately 14 million acres of land owned by non-Indians within reservation boundaries. (36)

This trust arrangement is where privatization advocates locate their concerns regarding Indian poverty 37 Common arguments advanced in this frame posit that if Indians could be liberated from restraints on the market for land and resources, they would no longer be poor. (38) Instead, they would build equity through home mortgages, (39) and tribal governments would promote development of energy and extractive industries. (40) Accordingly, some commentators argue that instead of the federal trust arrangement, Indian reservation lands should be held privately by individuals, such that those lands would be available for collateralization, development, and alienation on the real estate market, (41) which would in turn lead to wealth maximization. (42)

We agree with the many scholars who argue that Indian lands are subject to a dense regulatory bureaucracy that must be streamlined. (43) Yet we also note the importance of federal interventions that foster economic efficiency in reservation development without full-scale dismantling of the...