The Phoenix housing market has plenty of land ripe for development south and west of the metropolitan region. But it lacks vacant land within easy reach of downtown–unless you count protected Native American reservations.

Some tribes' land holdings have a handful of people talking about forging development partnerships with the tribes, especially in the more expensive parts of the region, such as Scottsdale, Ariz. In many of those areas, developers are close to running out of available land for new housing.

Although national and regional builders historically have shied away from this idea, others in the real estate industry believe that it could happen in the not too distant future. Tribes in Arizona already have partnerships with commercial and retail developers.

For example, the Salt River Pima-Maricopa Indian Community did a deal to construct a 140-acre retail development on a portion of its 54,000 acres of land outside Scottsdale. Target, The Home Depot, Circuit City, Old Navy, and Toys 'R Us are among the big-box stores. Scottsdale Community College also is on the reservation.

“That tribe has had a long history of relationships with the [Phoenix] business community. They sit on an absolutely prime piece of land in south central Scottsdale that could become an extremely valuable property,” says R.L. Brown, a Phoenix real estate analyst who publishes a local housing market newsletter.

SURROUNDED BY LAND BUT NO WHERE TO BUILD: Between protected Native American lands and federal lands, developers in the Phoenix metro area are facing land constraints and are introducing more high-density planning alternatives. Developers also are looking at other Native American lands, too, according to Brown. One of them is the tract of land owned by the Gila River Indian Community, home to the Pima and Maricopa tribes, 40 miles south of Phoenix.

Native American land is protected territory belonging to the tribe; it can never be sold; and it is subject to extensive negotiations to lease. However, in a recent speech, Brown acted as a catalyst for developing reservation sites, suggesting that the tribes could make money from leasing their land, which could be plowed back into the community, tripling resources for education, health care, and other social services.

“What it will take to see further activity is just good, solid, serious business relationships between the business community and tribal leadership,” says Brown. He estimates that it will take is at least five or six years of active work to develop such partnerships because the “issue is more cultural than anything else.”

Learn more about markets featured in this article: Phoenix, AZ.