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

Infrastructure is critical to support housing needs

Sioux Falls has been growing at a rapid pace the last several years. Whether you notice it while waiting in longer lines at the gas pump and grocery store or during the increase in rush hour traffic, the signs are very apparent. Sioux Falls and its surrounding communities are seeing a noticeable spike in residents. In 2022 alone, Sioux Falls saw an estimated increase in population of 6,200 residents.

While we welcome growth, it comes with challenges. The growing pains are particularly acute in the housing market.

In a recent report from the South Dakota Multi-Housing Association, the vacancy rate in Sioux Falls for multi-housing units was only 5.7%. According to® the median listing price for a single-family home in August 2023 in Sioux Falls was $349,900. That price is up over 4.5% from the previous year. Not to mention availability alone has become an issue, as many current homeowners hesitate to sell when faced with today’s high interest rates.

One of the largest projects approved will expand wastewater infrastructure on the growing west side of the city.

All those factors combined have brought housing availability and affordability to a near fever pitch. The good news is that our elected officials at both the state and city levels have noticed the housing issues and taken action.

In 2021, the State of South Dakota received funds from the American Rescue Plan Act (ARPA) that was passed by Congress during the COVID-19 pandemic. A portion of those funds were to be used to address necessary water, wastewater, stormwater and broadband infrastructure. In 2022, the South Dakota State Legislature passed an appropriation of $200 million to be allocated to the South Dakota Housing Authority (SDHA) and placed in the Housing and Infrastructure Financing Program. The purpose of the program is to offer grants and loans to support housing and infrastructure projects across the state. These grants will allow for lower out of pocket input costs by the developers, which in turn will lower the prices for consumers.

After some delay, the application process to receive these dollars began in July 2023. Several applications were received for projects in and around the Sioux Falls area. The majority of the greater Sioux Falls projects are seeking dollars that come in the form of Federal ARPA dollars, or General Grants, to create the necessary infrastructure for housing projects. A number of these projects would be workforce and affordable housing units specifically, which are a significant need in our community.

In September, the SDHA awarded the grants of the Housing and Infrastructure Financing Program dollars to projects in the communities of Aberdeen, Box Elder, Brookings, Lake Preston and Pierre. However, at their October 10 meeting, the SDHA approved another twenty projects. One of the largest projects approved is a plan from the City of Sioux Falls to expand wastewater infrastructure on the growing west side of the city. The City was awarded $14 million in ARPA funds. The project will provide a significant increase in wastewater capacity and allow for continued growth in western Sioux Falls by adding infrastructure for over 800 additional lots to be constructed in the future.

There are still numerous projects in and around Sioux Falls that have applied and are waiting to be approved. These will help our communities expand and promote growth for those looking to move to or stay in the area.

While it will still take time to see the benefits of all these infrastructure projects, positive momentum in this area will pay dividends for years to come. With a strong investment today, our community will be able to continue to be a place that businesses and people want to live, work and grow.