Photo looking up into dome of capitol building in Pierre, SD

Funding for workforce housing passes legislature

The topic of workforce housing has been the talk-of-the-town/state for several years. Whether you reside in a small town or the economic engines of Rapid City and Sioux Falls, the need for housing is universal in our state.

Last December, Governor Noem announced her plan for $200 million in workforce housing grants (SB 53). The workforce force housing grants would be administered through the Governor’s Office of Economic Development (GOED). The program would require the funding for a project to include: one-third state grants, one-third municipal funds and one-third private funds.

Prior to legislative session, twenty legislators had held public hearings across South Dakota last summer/fall with a plan to bring workforce housing legislation that would reflect their state-wide assessment through their Workforce Housing Interim Study.

Early in legislative session, conversations between the Governor and key legislative leaders resulted with a second workforce housing bill (SB 65). Part of the agreement between the two branches of government was to move $100 million from the Governor’s bill to SB 65. (Leaving $100 million in the SB 53, the GOED grant bill.)

Senate bill 65 provided the entire $100 million would be moved to the South Dakota Housing Authority (SDHA) and would be placed in a special fund known as the Housing Opportunity Fund. The $100 million would be used as a revolving loan to fund workforce housing not low-income housing.

Somewhere between the Senate’s adoption of SB 65 and the House of Representative’s consideration of it, the wheels fell of the mutual agreement between the branches of government. The House voted on SB 65 as amended in the House and the bill died four times. Efforts to revived SB 65 had ended, but there was another vehicle HB 1033 that had already passed the House and was being considered by the full Senate.


House Bill 1033

HB 1033 was “hog-housed,” which means an amendment that strikes out everything from the title on down. The new version of HB 1033 sent all $200 million to the Housing Authority and reserved it all for infrastructure projects. Section one and two of the bill state:

  • Revolving loan funds of $100 million for construction of housing infrastructure, and
  • Grants for $100 million for the construction of housing infrastructure:
    • $50,000 million
    • $50,000 million American Rescue Plan Dollars.

Section three of the bill states loans or grants must be designated as follows:

  • Thirty percent of the dollars are for use in municipalities having a population of fifty thousand or more (Sioux Falls & Rapid City); and
  • Seventy percent for use in all other areas of the state.

The last provision in Section three states: Any housing infrastructure project sited in a municipality having a population of fifty thousand or more may receive either a loan or a grant from moneys appropriated or authorized under this Act but may not receive both.

Section four of the bill provides: Any grant made available by the South Dakota Housing Development Authority pursuant to this Act may not be for an amount greater than one-third of the project’s total cost.

Section six provides the definition of the term “housing infrastructure:

  • Rights of way;
  • Water distribution systems;
  • Sanitary and storm sewers;
  • Streets, roads, and bridges;
  • Curbs, gutters, and sidewalks;
  • Lift stations;
  • Excavation and compaction;
  • Traffic signals;
  • Street lighting;
  • The purchase of land necessary to accommodate projects listed in this section; and
  • Any other infrastructure project determined by the South Dakota Housing Development Authority to be consistent with the purposes of this Act.

HB 1033 passed both Chambers and is now sitting on the Governor’s desk for consideration.