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Seven housing projects get boost from long-delayed infrastructure program

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Seven housing projects get boost from long-delayed infrastructure program

Sep 12, 2023 | 2:29 pm ET
By John Hult
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Seven housing projects get boost from long-delayed infrastructure program
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An apartment building under construction on June 13, 2023, in eastern Rapid City. (Seth Tupper/South Dakota Searchlight)

A state board signed off Monday on the first grant dollars from a $200 million housing infrastructure program that had been mired in controversy through two state legislative sessions.

Box Elder was the big winner at the September meeting of the South Dakota Housing Development Authority, at which seven applications for infrastructure grants were reviewed and approved. Three awards went to developments located in the West River city of 12,000 that’s home to Ellsworth Air Force Base. The base is anticipating growth as one of the future homes for the new B-21 bomber.

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HDA Director Chas Olson told board members the authority has seen 69 applications for funding since July, when rules for the program were finalized. If all applicants got all the money they’ve asked for, the projects would eat up about $102 million of the $200 million in available funding.

Projects leaning on infrastructure improvement program grants are expected to appear regularly on HDA meeting agendas moving forward. The program joins a list of other HDA-managed financing pools for affordable housing, though the infrastructure program is untethered to income-based development. 

The newly available infrastructure program dollars became a political football in 2022, when lawmakers rejected Gov. Kristi Noem’s plan to award the federal dollars through the Governor’s Office of Economic Development. They instead moved the money to the Housing Development Authority, which later that year decided not to move forward with grants over concerns about the legality of offering them through the agency.

During the 2023 session, lawmakers passed what was billed as a fix to the program that explicitly authorized the authority to award the money near the start of the session, in January. They added an emergency clause meant to move the funds immediately from the authority to developers, the goal being to help fund projects to ease the state’s housing crunch before the start of construction season.

But another wrinkle emerged just after the session. In order to award the money, the authority needed to go through the rulemaking process, which held up applications until late July and awards until this month.

The grant money is available to help developers cover the cost of installing water and sewer lines, streets and the like as they build new homes or apartments – a cost developers say has spiked higher than the state’s climbing home prices. 

As the authority worked through the details on the first seven awardees, Olson often included details on how the grants would impact prices for buyers. 

Freedom Landing Phase 5 in Box Elder, for example, was awarded $950,000 for the development of lots for single-family homes. The per lot price would be $55,000.

“Without the grants, they would be $85,000,” Olson said.

The awards for Freedom Landing and six other projects presented Monday add up to about $10.3 million. 

Infrastructure program grant awardees

Freedom Landing Phase 5, Box Elder: This project promises to develop 38 single-family lots, each sized at 11,000 square feet. Total project cost is $2.9 million. It was awarded $950,000 in grants.

West Edge, Aberdeen: This development has 89 total lots, with a mix of single- and multi-family homes. The $1.6 million in grants is expected to lower lot costs by $8,000 or more, and drop rents to $2,200 a month from $2,500.

Northern Lights, Box Elder: This $4.7 million project would develop 49 lots for single-family homes. The $1.2 million in grants would push down lot costs from $95,000 to $55,000, Olson said.

South East Development, Lake Preston: This project was awarded about $450,000 for an in-progress development with eight single-family homes and 27 multi-family units. The total cost of the development is $1.3 million.

Branch Creek, Brookings: 100 lots for 135 single-family units are planned for this development of mixed townhomes and duplexes across 17 acres. The grant award will help cover $1.7 million of the $5 million cost.

Pierre Downtown Redevelopment, Pierre: This project for the state capital city was granted a $600,000 award to help build 60 multi-family units. The affordable housing units would be open to those meeting income requirements, Olson said.

Alpha Omega Subdivision, Box Elder: Nearly 130 townhomes and 350 multi-family units are planned for this $9.2 million development. The townhomes are expected to cost between $310,000 and $350,000. The project was awarded $3 million.