An evaluation of the federal government's involvement in housing on First Nations reserves over 13 years confirms what critics have long contended: Ottawa is not keeping up with housing support, and conditions are actually getting worse.

The federal government is meeting its own targets for constructing social housing on reserves, but the aboriginal population is growing more quickly than the government plan, says the audit of on-reserve housing support.

"Despite ongoing construction of new housing on-reserve, the shortfall still exists and appears to be growing rather than diminishing," says the evaluation commissioned by the federal Department of Aboriginal Affairs.

At the same time, housing is often sub-standard and quickly falls apart. The audit says there is not enough funding to pay for maintenance and upkeep.

"As quickly as new units come on stream, they require aggressive maintenance because of the overcrowding and heavy "wear and tear" they take," says the February 2011 report posted on the Aboriginal Affairs website this month.

"There is not yet sufficient capacity within First Nations communities to do the maintenance, and limited personal funds with which to pay for someone else to do the work."

A spokeswoman for Aboriginal Affairs Minister John Duncan says the government is well aware of the problems, and is putting substantial resources towards resolving them.

"We recognize more needs to be done and we will continue to work with First Nations, as we have for the last five years, to address this important issue," spokeswoman Michelle Yao said in an email.

There are serious health and safety consequences for communities when housing is allowed to crumble, the report warns.

Overcrowding is still a major problem, although not as bad as in the past, the report adds. The proportion of houses considered overcrowded has dropped by a third over 13 years, but it is still six times higher than for non-aboriginal Canadians.

The federal government regularly spends about $272 million a year on on-reserve housing, and also allotted an additional $192 million over five years in the 2005 budget.

The audit did not examine the most recent bout of spending through the federal government's stimulus plan, which put substantial money into construction of social housing and infrastructure.

Rather, the review focused on implementation of the First Nations housing policy that was first introduced in 1996 and persists to this day.

The policy included ministerial loan guarantees that natives could access in order to buy their own on-reserve homes. People living on reserves can own the building, but not the land underneath it, since it is owned collectively by the First Nation.

But the audit said that while the loans have supported the purchase of 26,000 homes over 13 years, and the default rate is low, the program is rife with contingent liability problems.

The review also underlined jurisdictional challenges.

Governments and First Nations decided long ago that they should share responsibility for building and maintaining on-reserve housing. But no one is exactly sure what this "shared responsibility" means, the audit points out.

"Until that understanding is negotiated, (Aboriginal Affairs) and First Nations are left trying to achieve the objectives of the housing policy through murky waters."

The report urges Ottawa to clarify its policies and objectives, devise better ways to train local community leaders to keep watch over housing quality and quantity, and to make sure that new housing at least meets building code requirements.

The audit also says Ottawa needs to figure out a cost-effective way to deal with the growing demand for housing.

The government's response to the audit indicates that it agrees with the recommendations and has plans underway for improvements.

First Nations housing problems are so intertwined with pervasive poverty on reserves that they need to be looked at together, says John Beaucage, chairman of the First Nations Market Housing Fund.

He believes the housing problem could at least be alleviated by shifting some of the focus to affordable housing geared towards people with some income, instead of solely looking at social housing geared to people with no market income.

In many places, he says people of modest means wind up living in homes meant for the poorest of the poor, partly because that's all there is available, and partly because they're considered better tenants since they can afford the upkeep.

The federal stimulus plan, he added, was helpful for many reserves because it paid for water and sewage systems that can be used as the backbone for building multiple housing units.