$14M in state housing money to double developable land in Sioux Falls

SIOUX FALLS, S.D. (KELO) – The idea of more workforce housing in South Dakota received a $48 million boost this week, including $14 million to improve housing in Sioux Falls.

On Tuesday, the South Dakota Housing Development Authority awarded $48 million from a $200 million pool of funds aimed at helping developers pay for sewer pipelines, water pipelines and street construction. Sioux Falls received $14 million from the state’s Housing Infrastructure Financing Program to expand sewer infrastructure on the west side of Sioux Falls.

“We need more developable land,” Logan Penfield, the city’s housing development manager, told KELOLAND News. “The land that is developable, the price per lot is so high, it’s really hard to build affordable.”

Penfield said real estate and housing developers have stressed to city planners one of the biggest challenges is finding developable land for workforce housing. He said the $14 million will double the amount of developable land in western Sioux Falls, which will double the amount of housing that can go in that area of the city.

“Projections that I’ve seen are roughly 1,100 total units between multifamily and single family units and tier one, which is 0-5 years,” Penfield said. “We’re opening up more land and doing so at a faster pace.”

In a social media post, Sioux Falls Mayor Paul TenHaken praised the $14 million in state funding from the SDHDA.

“This isn’t a headline grabber, but it is a pretty big deal in our ongoing efforts to increase affordable, accessible housing opportunities in Sioux Falls,” TenHaken posted on X, formerly known as Twitter.

The money will go to what the city calls Basin 15, which is all the expanded sewer infrastructure in western Sioux Falls. According to the city’s CIP, Phase 2 of sewer construction near 12th Street to 22nd Street.

“We have $14 million in a grant as opposed to taking out a loan and then having to pay that back through recovery costs,” Penfield said. “Generally, cost recovery goes through the developers and then it’s passed down to the end user.”

Chad Comes, a principal engineer with the city of Sioux Falls, said infrastructure costs with sewer and water pipes are starting to stabilize.

“This is sort of a first step in that process of opening the significant area, 30,000 acres or so on the west side,” Comes said. “The west side is where this project has made it into our CIP with some of our most immediate needs, but we’re looking at all areas for growth.”

Other projects to earn money were listed on the SDHDA agenda from Tuesday.