Industry summit: Every nook and cranny in South Dakota is experiencing a housing shortage
At a May 16-17 housing summit in Chamberlain, professionals and experts in the housing and economic development fields came together to share tips and tricks on meeting the state's housing crisis.
OACOMA, S.D. — Though most of the discussion around housing in South Dakota over the past months has revolved around the hold-up of $200 million in infrastructure development dollars, a two-day industry summit in Chamberlain this week showed some other methods for growing housing stock.
If there was one thing attendees at the Arrowwood Cedar Shores Resort in Oacoma could agree on, it's that nearly every nook and cranny in South Dakota is experiencing a housing shortage.
The May 16 and 17 housing summit — a joint effort between Dakota Resources and Lake Francis Case Economic Development Corporation — brought together roughly 50 economic development directors and housing experts from around the state to share funding sources and housing development methods that communities can get started on as the state works out the kinks in the workforce housing program put into law this past session.
“When we network, we learn faster together; we're not as likely to make as many mistakes,” said Mike Knutson, who orchestrates the Dakota Resources Community Learning Network. “We're able to see how other people have already done things and we get better together faster.”
According to Mike Lauritsen, the executive director of the Lake Francis Case Economic Development Corporation, the South Dakota Housing Authority didn’t take questions on the $200 million fund, since the body will be discussing the adoption of the draft program rules at a meeting on May 31.
But rather than the gloomy housing discussions that have circulated over the program’s delay, Lauritsen said the housing summit was about sharing what has worked in the ongoing battle for more housing, like free land in Chamberlain, infill lots in Tripp and multi-use redevelopments in Huron.
For Lauritsen, one of the largest changes in economic development philosophies around the state has been the movement from focusing on attracting businesses to attracting residents, a major theme of the summit.
“If you look at Elevate Rapid City, their focus used to be recruiting new businesses to the Rapid City area,” Lauritsen said of the economic development corporation in the state’s second-largest city. “But, in 2020, they stopped and realized they didn’t have a workforce, and it's because they don't have enough housing. Everybody's facing that same issue across South Dakota.”
Caleb Finck, a former state lawmaker and the president of the board of directors of the Tripp Development Corporation, agreed, referring to housing and economic development as a “chicken or the egg” sort of interplay.
In Chamberlain, for example, Lauritsen noted that the city’s three largest employers — St. Joseph’s Indian School, the Chamberlain School District and the Sanford Chamberlain Medical Center — have a combined 40 job openings, many offering high wages and full benefits.
“With my three largest employers not having enough workforce, that means I need housing,” he said. “And without that housing, I can't grow the workforce. And I can't recruit new businesses to come to town.”
While the free lots in the Smokey Groves development have already led to five new home builds, Luritsen noted that these kinds of developments can be a real challenge for rural communities that have reached their edges.
In most cases, between finding adjacent land with a willing seller, potential homeowners with enough money to build and funding sources for the myriad types of infrastructure needed to support residences, the process can take several years and leave some communities feeling in over their heads.
“Once you've completed development, you start over and you identify another piece of land. And so we talked about having to be very forward thinking of where your next development will go,” Lauritsen said. “It doesn't stop just because you have one going, it's time to be thinking about the next one.”
Those below-ground infrastructure development needs were the focus of the $200 million in housing dollars passed last session.
In Tripp, Finck said the development corporation is focusing more on “infill lots” — existing properties that have either had homes torn down or feature dilapidated residences — to avoid the high cost of these new developments.
“Those infill lots already have the water and the sewer and the electrical and the telecommunications lines. All of that is running right past them,” Finck said. “For us, that is the most economical option to pursue new housing right now.”
Another creative strategy that drew attention at the summit came from a private developer in Huron: Jordan Stricherz, who owns K&J Holdings along with his wife, Kelsi.
Though the real estate company up until recently mainly dealt in single-family homes, Stricherz purchased a multi-story building on Huron’s Dakota Avenue, the town’s main street, where he’s planning to host multiple businesses and build apartments.
On top of increasing housing stock, the location of the development in downtown Huron could be a model for the needed revitalization of downtown economies that many small and mid-sized towns in South Dakota are facing.
“It's difficult to know whether you need people there to spend money in shops or if you need shops there for people to want to be living there, but the reality is that it all needs to happen,” Stricherz said. “And so that's kind of the unique thing about this project is that we're able to check both boxes by bringing people as well as businesses back downtown.”
These different strategies, however, are made more difficult by the economic realities of above-ground construction, where construction costs are straining the development of reasonably priced housing.
According to Lori Moen, the chief operating officer of Grow South Dakota, a nonprofit based in Sisseton focused on statewide economic development, lowering these costs requires housing developers to be informed of state, federal and local funding sources.
One source mentioned by several attendees was the South Dakota Housing Development Authority’s Housing Opportunity Fund, which offers assistance to homebuyers, renters or builders below 115% of the area’s median income. In the 2022 fiscal year, which ran from July 2021 to June 2022, the fund awarded nearly $5.4 million, a number Moen said does not meet the current needs of communities around the state.
“That fund is key in obtaining that type of lower-income financing,” Moen said. “It’s getting to where, in our rural communities, the families that live in those communities now can’t afford it. And we have a lot of people coming in from out of state that may have disposable income readily available that may be outpricing some of our families that have lived here for a lifetime.”
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or email@example.com.