SIOUX FALLS, S.D. (KELO) — Finding housing is a challenge right now. Finding affordable housing is even more difficult.

That’s why a developer is working closely with the City of Sioux Falls to build homes on the east side of town that could ease the need for more affordable housing.

An area near Madison Street and Veterans Parkway is mostly a grass field now, but it will soon be home to a new development. The project will include 64 homes sold at more affordable prices for first-time homebuyers.

Nielson Construction is heading up the plan.

“I’ve committed to building the houses and holding the prices. I have to get the houses built by March of 2025. They all have to be completed and for sale, and I’ve got to commit to holding that price for the city to work with me on this TIF application,” owner Kelly Nielson said.

At its meeting on Tuesday, the city council approved rezoning the area for affordable housing. Next up is the process for the tax increment financing (TIF).

The TIF plays a big role in lowering the cost of the homes by reducing the development costs.

This is our first attempt to use this, but we know that there’s a need for accessible housing units across the city,” said Dustin Powers, City of Sioux Falls business development coordinator.

It will include twin homes and single family homes with two or three bedrooms. Prices will range from $232,000 to $323,000, which must be maintained for at least five years.

“We’re hoping to expand that out and work with other developers in the City of Sioux Falls to make sure that the whole range of income levels in the City of Sioux Falls has a place to live,” said Logan Penfield, City of Sioux Falls housing development manager.

“We didn’t do this TIF application designed just for me and this one development. It’s structured that hopefully other developers will grab onto the idea and try to add in some of this type of housing in their developments,” he said.

Nielson says they hope to complete some of the infrastructure this year and put in roads early next year. They want to build 20-25 homes a year so they have them done by the 2025 deadline.