A recent Rapid City Journal article previews a new report on the state of affordable housing in Rapid City by Black Hills Knowledge Network Project Director and Regional Economist Jared McEntaffer, Ph.D. The report describes the current shortage of affordable housing due to wage stagnation, a growing demand for single-person homes, and an overdependence on the tourism industry for personal income.
The 95-page report will be released later this summer and discusses how median household incomes state and nationwide have increased since 2010, but Rapid City’s median household income has declined - from $50,380 in 2010 to $48,784 in 2016. This is explained by the aging population, an increased number of one-person households, and the overdependence on the tourism industry for income. 25 percent of Rapid City residents are currently employed in retail, accommodation, food service, and/or arts and entertainment industries, all of which center around tourism.
This decrease in median income and aforementioned increased demand for single-person housing units has caused the demand for small, inexpensive housing, which includes units priced between $500 and $899 per month, to far surpass Rapid City’s current supply. As a result, many of Rapid Cities’ low-income households were forced into more expensive housing that often cost more than thirty percent of the household’s annual income. On the other end of the spectrum, upper income households were found to often seek out more modestly priced housing than might be expected given their incomes. Therefore, people from both low- and high-income brackets were competing with the middle-income bracket for housing, which led to even higher housing costs overall.
McEntaffer suggests several solutions to this housing dilemma in the report, including recycling old units and adding to Rapid City’s existing housing stock in the $400-$600 price range. There are several tools that the city and developers could utilize to develop more affordable housing, such as the Department of Housing and Urban Development’s HOME and Community Development Block Grant programs, as well $12 million available annually from the South Dakota Housing Development Authority.
Adapting Rapid City’s current building and housing codes to accommodate its changing demographics and preferences in also necessary, as well as improved coordination between the city and developers to reduce development costs and create incentives for building affordable housing.
McEntaffer also suggests the possibility of the formation of a nonprofit development and/or property management group like CommonBond Communities, which is a nonprofit organization that provides affordable housing in Iowa, Minnesota, and Wisconsin, for more that 12,000 residents.
The City of Rapid City is now offering home improvement loans to city residents made possible through the Community Development Block Grant. According to KOTA News, the program will allow homeowners to make improvements to issues related to structure, safety, energy efficiency and accessibility.
The loans are based on income and awarded on a first-come, first serve basis. Recipients may receive loans with no or low monthly payments.
Individuals interested in the loan program can call 605-394-4181 for more information. Learn more about Rapid City on the Black Hills Knowledge Network’s community profile.
The Rapid City Council denied an appeal made by a developer of a proposed subdivision intended for affordable housing, reports the Rapid City Journal. The developer had requested that the council allow the subdivision to bypass the city’s platting requirements, which include the installation of curbs, gutters and sidewalks. The city council rejected the appeal request by a vote of 5-4, with Mayor Steve Allender casting the deciding vote.
Deadwood City Commissioners are currently looking into tax incentives to spark economic development in the city, reports the Black Hills Pioneer. At a recent city commission meeting, commissioners discussed the possibility of a housing incentive plan that would implement a tax rebate for single-, two- and multi-family dwellings. The rebate would not apply to hotels or other forms of temporary or vacation lodging.
The proposed rebate would last for five years. Rebates would be calculated by dividing the valuation of the property by $1,000 and then multiplied by the Deadwood city levy.
Commissioner Gary Todd expressed concerns about the tax rebate benefitting non-residents of Deadwood. Planning and Zoning Administrator Bob Nelson responded that his staff often find potential buyers online or receive complaints from neighbors when properties are not purchased by full-time residents.
To read more news from Deadwood, visit the Black Hills Knowledge Network’s online news archive.
An affordable housing project along Creek Drive in Rapid City may be cancelled unless the Rapid City Council approves a waiver. As part of the construction process, the builder would be expected to add pavement, curbs, gutters, sidewalks, and other improvements. The developer submitted an appeal to the Public Works Committee. According to the Rapid City Journal, the developer argued that completing the upgrades would be wasteful and further the misalignment of the Creek Drive intersection with East St. Patrick Street.
The affordable housing project would create one-bedroom apartments to rent for $660 a month, targeting people making $25,000 annually (just over $12 an hour). Past stories on affordable housing are linked in the Black Hills Knowledge Network's online news archive.
Former Rapid City Alderwoman Charity Doyle was hired to create a center for people facing homelessness, substance abuse, and mental illness, reports the Rapid City Journal. This center is based on the concept of the Haven for Hope in San Antonio, TX. The Rapid City Collective Impact Group proposed the project and will be utilizing the National American University property in Rapid City owned by Pennington County.
To learn more about homelessness in the area, visit the Black Hills Knowledge Network online news archive.
Individuals earning a minimum wage in South Dakota must work 51 hours per week in order to afford a one-bedroom apartment in South Dakota, according to a recent report by the National Low Income Housing Coalition. In order to afford a two-bedroom rental home, South Dakotans would need to make $14.12 per hour, or work 65 hours per week at the minimum wage.
Pennington County is the most expensive county in the Black Hills region to live in, with an hourly wage of $15.83 per hour required to afford two-bedroom rental housing as defined by 2017 Fiscal Year Fair Market Rent. However, an individual earning minimum wage in Pennington County would have work 73 hours per week in order to afford the same housing. Lawrence and Butte Counties were the most affordable, but still required individuals to work 57 hours per week at minimum wage or $12.40 an hour to afford two-bedroom rental housing. An overview of housing affordability for the counties of the Black Hills can be viewed below:
|County||Fair Market Rent for Two-Bedroom Housing||Work Hours/Week at Minimum Wage to Afford Two-Bedroom Housing||Hourly Wage Needed to Afford Two-Bedroom Rental Housing|
While housing in the Sioux Falls metropolitan area has previously been more affordable than housing in the Rapid City metropolitan area, fewer disparities between the two counties were seen this year. In 2016, the fair market rent for a two-bedroom apartment in Rapid City was $825 per month while it was $734 in Sioux Falls. In 2017, fair market rent in Rapid City for a two-bedroom apartment was $823 per month while Sioux Falls rose to $811 per month. A comparison of housing costs in Sioux Falls and Rapid City can be viewed below:
Regionally, South Dakota required the lowest wage to afford a two-bedroom housing unit at $14.12 per hour, ranking the state 49th nationally. Iowa, Nebraska and Montana also required relatively low wages to afford two-bedroom housing hovering around $14/hour. North Dakota, Wyoming and Minnesota required higher wages to afford housing. The weekly hours required to afford two-bedroom housing at minimum wage as well as the wage required to afford housing at forty hours per week can be viewed below:
|State||Wage Required to Afford Two-Bedroom Housing||Weekly Hours Required to Afford Two-Bedroom Housing at Minimum Wage||National Ranking|
To learn more about housing affordability in South Dakota and across the nation, view the full Out of Reach 2017 report by the National Low Income Housing Coalition.
Rapid City Council approved the creation of a $90,000 tax increment financing district for the Village on Monroe development project reports the Rapid City Journal. Tax increment financing (TIF) was approved in 1978 for use in South Dakota. This TIF was approved in order to help build a five unit townhouse being created north of Rapid City Plaza Civic Center. This property was determined blighted, which is one criterion for a TIF. This TIF will be used to cover the land costs; which brings questions about the public impact of this project.
This TIF would use $60,000 for land acquisition costs; traditionally not covered by TIF. This was approved unanimously at a Rapid City Council Meeting in April. This would allow the townhome cost to drop. In addition to this more affordable price, NeighborWorks Dakota Home Resources will provide each owner with a $12,000 interest free down payment. They indicate that when a home is sold, this savings will be passed on to future owners.
The Spearfish City Council recently instructed the Dakota Land Trust to apply for a zoning change in order to move an affordable housing project forward, reports the Black Hills Pioneer. The council also approved transferring the land to Dakota Land Trust at no cost, as the city co
uld recover the cost of the land through a tax increment financing district that will be established on the site.
The lot that will be transferred was acquired by the city in 2014 for approximately $225,000. In order to recover the cost of the land, a tax increment financing district will be placed on the lot beginning in 2020, with a full reimbursement expected in 10-12 years.
Parkside Village will host several affordable townhouse units ranging from $99,000-$139,000. Two- and three-bedroom units at 780 and 980 square feet will be available. The two-bedroom units will have a single car garage, while the three-bedroom units have two-car garages.
At its commission meeting on June 20, the Pennington County Commission deeded property located at 248 Curtis Street, according to KOTA News. Mayor Steve Allender addressed the commission about the request.
The lot currently hosts an abandoned home. As part of the agreement, the lot will be restored and a proposal will be drawn up in order to allow building on the property. Finally, the property will be given to a builder to create affordable housing.
View a recording of the Pennington County Commission meeting on the Pennington County YouTube channel. To learn more about housing in the Black Hills region, visit the Black Hills Knowledge Network’s online news archive.
A proposal for an affordable housing project developed by NeighborWorks Dakota Home Resources in conjunction with the City of Spearfish, Dakota Land Trust, and South Dakota Housing Development Authority is in development, reports the Black Hills Pioneer. The proposed location for the housing development is on city-owned lots between Grant and Federal Streets on Fifth Street in Spearfish.
At the time of its presentation, city council members and staff only had a week to review the affordable housing proposal. Following a more thorough review, city staff will develop a report including responsibilities of various parties including tasks and timelines, zoning requirements, and information about the status of the land.
The affordable housing units would include one- and two-bedroom townhouse units with 780 and 980 square feet, respectively. One-bedroom units would have single garages, while the two-bedrooms would have double garages. The formation of a homeowners association is also recommended in order to provide landscaping and snowplowing services at a cost of approximately $20-25 per month. Sale prices on the townhomes are estimated between $99,900 and $139,000.
The report to be compiled by city staff will be presented at the Spearfish City Council meeting on June 19.
The Rapid City Council approved a $75,000 grant to help fund a project to build more than 500 affording housing units near Rushmore Mall at its May 15, 2017 meeting. According to the Rapid City Journal, the director of the project from Freeland Ranch Community Inc. says that the money is needed for infrastructure and road design if the project is to move forward. The measure was approved by a 6-4 vote. The housing project will be built between Haines and 143rd Ave. north of Seger Drive.
To read up on past news articles related to the Rapid City Council, view the Black Hills Knowledge Network's online news archive.
For more information on the council and government of Rapid City itself, check out this Black Hills Knowledge Network Community Profile page.
A Wednesday morning candidate forum focused on improving Rapid City's infrastructure and creating affordable housing. Candidates for the four competitive races were in attendance. Mayor Allender ran for re-election unopposed and Chad Lewis was the only candidate in Ward 3.
The Rapid City Journal reported on the responses the attending candidates gave. Although there was general agreement about promoting affordable housing, the method differed. One issue was the difference between non-profit and for-profit organizations developing the housing. John Roberts stated he felt with proper incentives, private developers could create housing for cheaper. Tony DeMaro suggested the city could make wider use of tax increment financing to promote development. Fixing up city streets is the major infrastructure goal for several candidates, with the city's capital improvement plan seen as more of a hindrance at this point.
The Rapid City Council approved $75,000 for drainage improvements for Youth and Family Services at their May 1st meeting. However, the other side of the agenda item, funding for Freeland Ranch's affordable housing development, has been continued to the May 15th meeting. The funding will come from Community Development Block Grant money. The Rapid City Journal notes that the grant has not been released to the city, as it is a federal grant. President Trump's budget request removed the program, but the current spending bill includes it.
For more stories on housing, check the Black Hills Knowledge Network's online news archive.
Engineering students at South Dakota School of Mines and Technology are looking at the possibility of tiny homes to help Rapid City's homeless population, reports the Rapid City Journal.
The Tiny Homes Team is a branch of the Engineering Projects in Community Service program, and are partners with the non-profit group Western South Dakota Community Action Agency. The group hopes to have a prototype tiny home for this project by next spring. Currently, they are researching designs, materials and local building policies and ordinances.
For more information on homelessness, please visit the Black Hills Knowledge Network's online news archive.
The Thunder Valley Community Development Corporation is installing solar panels, reports KOTA News. Gen Pro, a renewable energy company based in Piedmont, SD along with Solar Mosaic, Sun Power, and the Nathan Cummings Foundation are assisting Thunder Valley with the installation.
Thunder Valley is striving to meet the energy needs of the Pine Ridge Reservation in an affordable and environmentally-friendly manner. Thunder Valley Executive Director Nick Tilsen stated that the organization’s goal is to produce 100 percent of the community’s needs for energy that have less of an impact on the environment than current methods.
Nearly 20 staff members at Thunder Valley are learning how to install the solar panels. Thunder Valley plans to celebrate the installation of the solar panels on Earth Day, April 22nd.
South Dakota Housing Development Authority (SDHDA) awarded a grant of $91,000 for housing improvements in Rapid City, reports the Rapid City Journal. The goal is to create more accessible housing for Black Hills Works' clients. Brad Saathoff, Black Hills Work CEO, says the grant will be used to renovate buildings built over 40 years ago. The entryways were not built for the large mechanical wheel chairs used today.
SDHDA’s Board of Commissioners approved $2.6 million in funding across the state. The funding will be used for eight projects and building more than 75 new housing units.
For more information about housing, visit the Black Hills Knowledge Network's online news archive.
Possible cuts in the the proposed federal budget could affect Rapid City, reports the Rapid City Journal.
President Trump's budget includes a 13.2 percent decrease in funding for the Department of Housing and Urban Development (HUD). This cut would result in the elimination of the Community Development Block Grant program (CDBG), which awarded $5.2 million to South Dakota last year. The CDBG program funds Black Hills Habitat for Humanity, allowing them to build new homes in the last 10 years. These homes and their residents are projected to generate more than $330,000 in tax revenue over the next 10 years. The Habitat for Humanity executive director says the CDBG program is the only tool available to fund their housing and infrastructure projects. Eliminating the CDBG program could also have the result of closing down the Rapid City Community Development division, made up of a manger and four staff members.
For more information on local housing, please visit the Black Hills Knowledge Network online news archive.
Efforts to renovate the former Garfield Elementary School are moving forward, reports KOTA News. The project, known as Garfield Green, broke ground in May 2016 and is in the process of being converted into 12 apartments. The project is scheduled to be completed this fall.
Following the closure of the elementary school in 2001, Rapid City cardiologist Kelly Whitley purchased the building and land for $400,000, as reported by the Rapid City Journal. The building was utilized as a community arts center for children for several years. Black Hills Habitat for Humanity later purchased the property for $300,000 before selling it to the current owner and contractor, Glenn Barber & Associates, for $260,000.
For more information on housing in the Black Hills region, visit the Black Hills Knowledge Network’s online news archive.
Zoning changes have been requested for a land tract southeast of Rapid City, reports the Rapid City Journal.
The change from "no-use" to "residential and commercial" would allow for developers to build multi-family apartments, and affordable single family residential units on the land. Homes will be priced between $140,000 and $190,000. Preliminary approval was given for zoning changes by the Rapid City Zoning Board of Adjustment and Planning Commission, and a traffic impact study was ordered to address concerns of those currently residing nearby. The zoning change will be considered by the full Rapid City Council during its March 20 meeting.
For more information on local construction, please visit the Black Hills Knowledge Network's online news archive.