SIOUX FALLS, S.D. (KELO) — Houses were being moved into Smokey Groves development in Chamberlain on May 9 as the city’s plan to give away free lots continues.

The city is offering 11 lots for free to qualified recipients in a housing development it owns. The deeds have been transferred for nine of those 11 lots, said Mike Lauritsen, the executive director of the Lake Francis Case Economic Development. Lauritsen is also the former Chamberlain city administrator.

“Construction has started on five of the nine,” Lauritsen said.

The free lots program is one way to address the labor shortage in Chamberlain, Lauritsen said.

The city’s three largest employers are the Chamberlain school district, the St. Joseph’s Indian School and Sanford health care. Lauritisen said the three employers have 40 open jobs with salaries and full benefits between $30,000 and $100,000.

“That’s enough to move here…,” Lauritsen said.

A 2022 study concluded the city would need 50 to 70 new houses to fill the housing need in the community, Lauritsen said.

If a potential employee wants a job but can’t find a place to live, the employer and the community lose, Lauritsen said.

“Without a labor force, you can’t grow your business or your community,” Lauritsen said.

Chamberlain established a tax increment finance district (TIF) in the Smokey Groves development. The TIF money is used to extend infrastructure such as water and sewer to the area. The money will be paid back with the new tax revenue generated by new houses.

The TIF district defers those new taxes for a certain number of years Lauritsen said.

“For a TIF, you want to see building happening as soon as possible,” he said.

Free lots are an incentive to help fill the lot and generate new tax revenue, Lauritsen said.

Prospective lot owners must be able to finance the construction of a new house and have a contractor lined up before the city transfers the deed on the lot, Lauritsen said. Houses must be at least 1,500 square feet.

The small town of Pukwana is a few minutes’ drive from Chamberlain and it’s offering a similar program to Chamberlain.

About two years ago the city bought four lots and tore down some vacant buildings, city finance director Lonnie Sharping said. The four lots were combined into two lots which are being offered for free.

The city considered different ideas for the lots but there wasn’t much interest, Sharpington said.

The city said “Let’s open this up to options and see what other interest (there is)…,” Sharpington said.

Lauritsen said a local business employer has submitted an idea for a multi-plex with four residences. The idea is to provide housing for potential employees, he said.

The deadline to submit applications for the free lots in Pukwana is June 5.

Sharpington said Pukwana’s population is about 287. He described it as an active, friendly community where neighbors know each other.

Lauritsen said the free lots programs in the two towns are not unique as other communities in the state and around the nation have done similar programs.

It points to the key role housing plays in economic development.

“If you look at economic development (now) it starts with housing,” Lauritsen said.

Chamberlain is ready to expand its program which includes applying for a roughly $1.5 million grant to expand infrastructure to another area in the free lot development. Lauritsen said that grant would be submitted as part of the $200 million in housing money available in the state.

The $200 million is stalled in state discussion as of May 9.