PIERRE, S.D. (KELO) — A proposed plan for South Dakota’s new $200 million subsidy program for housing infrastructure calls for two rounds of applications later this year.
The South Dakota Housing Development Authority board released the proposal and an accompanying set of proposed rules for public review on Tuesday.
A public hearing date hasn’t been set but is expected to be in mid-April. The Legislature’s Rules Review Committee would consider the package in May.
The authority wants to start accepting applications June 1-15, followed by second round December 1-15, according to the proposal.
The Legislature re-approved the $200 million earlier this year. Lawmakers approved $200 million last year, but the authority’s board decided against using the money because of legal concerns.
The latest legislation requires the authority to make $70 million of grants and $70 million of low-interest loans to applicants from rural areas. Urban areas would receive the remainder: Sioux Falls and Rapid City would each get $10 million of grants and $10 million of loans, while other non-rural areas would split $10 million of grants and $10 million of loans.
Funding sources include $50 million from federal COVID-19 funds and $150 million from the state general fund.
The $150 million of general-fund money is to subsidize public infrastructure such as a right of way, water distribution system, sanitary sewer system, storm sewer system, lift station, street, road, bridge, curb, gutter, sidewalk, traffic signal, or streetlight, that is or will be owned, maintained, or provided by a political subdivision; or excavation, compaction, or acquisition of land for any of those purposes.
There are tighter restrictions on use of the $50 million of federal money. It can be used only for drinking water projects and sanitary sewer and stormwater management. The federal money can’t be used for land costs.
The plan describes projects that aren’t eligible for any of the funding, such as assisted living or nursing homes, housing developments that include acreages, infrastructure projects that will be privately owned, and projects that don’t fit the housing authority’s mission of providing affordable housing.
The subsidy available per project will be the lesser of:
One-third of the cost; or
$2 million or the actual cost; or
The actual cost of a project eligible for the program’s federal funding; or
The actual cost of a project eligible for the program’s state funding; or
$10,000 per unit of multi-family housing; or
$25,000 per single-family lot in a community of under 50,000 population; or
$15,000 per single-family lot in Rapid City or Sioux Falls.
A project in Rapid City or Sioux Falls would be eligible for either a grant or a loan but not both. Applicants throughout the state must put in at least 10% of their project’s cost and must agree in writing they won’t make more than 10% profit from any project funded by the program. Applicants are limited to two active projects at any given time.
All applicants must submit documentation showing the need via a market study.