‘Will this be the year we break a billion dollars?’ Sioux Falls building permits continue to surge in 2021

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SIOUX FALLS, S.D. (KELO) — Halfway through 2021 and the City of Sioux Falls is already fast approaching last year’s record-breaking building permit totals.

Amazon’s $200 million permit in December pushed the city’s building permit total over $900 million in 2020, shattering the previous $786 million record set in 2018. Now city officials say that new record may not last long.

“Will this be the year we break a billion dollars?” Jeff Eckhoff, the Director of Planning & Development Services at City of Sioux Falls said. 

It’s a big number that seemed like a far-off goal until 2020’s new $900M+ record.

Now halfway through 2021 and the City of Sioux Falls is already two thirds of the way to beating that record again.

“We’re blowing through records, every record, whether its residential, commercial, total building permit values,” Mayor Paul TenHaken said.

July wrapped up with more than $607 million in building permits with some of the biggest increases in new apartment buildings.

“If we look at the last three year average, we’re at like twice of what we were for apartments,” Eckhoff said. 

“This is really a remarkable time for our industry and the rental industry in the fact that we have so many people that are either moving new, moving into the area, or they’re selling a house, have nothing left to buy,” South Dakota Multihousing Assocation Executive Director Denise Hanzlik said. 

In some areas of Sioux Falls, apartment buildings are seeing one percent vacancy rates. Hanzlik says the industry is now playing catch up, especially after last year’s pandemic related delays.

“The cost of construction has gone up, the building products have gone up, labor costs have gone up, those are huge drivers,” Hanzlik said. “Some projects were actually taken off the table because of the pricing increases.”

The higher cost of building is also contributing to this year’s higher building permit totals, but city officials say the numbers really come down to an overall boost in growth this year. 

“It’s all over the board actually,” Eckhoff said. “The diversity of the projects and the number of the projects that are big is really encouraging.”

“The economy continues to boom, the building continues to boom, obviously we’re working on the workforce as well, to make sure that as we do these projects and bring businesses here that we have the jobs and people to do these jobs,” Mayor TenHaken said. 

That includes at the city’s building permit office where their staff have been incredibly busy trying to keep up with the increased number of permits this year. Eckoff says he’s hoping to add some additional building permit staff in the city’s next budget cycle.

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