Workforce housing bills progress through legislature

Two companion bills that would provide funding for workforce housing projects across the state were heard and altered in the state legislature over the past week. The Chamber supports both bills.

Let’s start with some background for context….
A legislative summer study met over the summer and fall last year visiting communities about their housing needs. In December, the Governor announced her intent to bring a $200 million workforce housing bill through the Governor’s Office of Economic Development (GOED). The funds are required to be used for infrastructure. The funds would be in the form of a grant (not a loan) and would be leveraged with a one-third match from a developer and a one-third match from the city or related entity (SB 53). The matching funds increased the total investment for housing to $600 million. The GOED funds will be used for infrastructure.

The summer study legislators and the Governor met early in the session and agreed to a different approach that would still include $100 million in grants (SB 53), but redirected the other $100 million (of the $200 million originally proposed) to the South Dakota Housing Authority to fund a revolving loan for housing (SB 65). In addition, both bills restricted some of the funds for cities above 50,000 (Sioux Falls and Rapid City).

 

This week, SB 53 has passed the House with further amendments. These amendments were added, in part, to secure enough votes to pass the bill.

The House version reduced the GOED expenditure authority to $50 million from $100 million and increased the South Dakota Housing Authority’s expenditure authority to $150 million. The GOED dollars reserve 70% of the $50 million for cities with a population less than 50,000. The remaining 30% of the $50 million may be used by all cities in South Dakota. The restrictions of the 70/30 split extend until June 30, 2024.

The Senate and House have passed the bill, but the House’s version was extensively amended.

Next step: The SB 53 will go to a conference committee, to find an agreeable compromise. The Chamber supports this bill.

 

Senate Bill 65, the second workforce housing bill allocates $150 million that will go to South Dakota Opportunity Housing Fund, which is a low interest revolving fund. This bill died in the House this week. (Although, nothing is ever really dead until the legislature adjourns.)

The last proposed amendment for SB 65 sought to restrict the funds to be set aside by designating 70% to cities below 50,000 population and 30% to cities over 50,000 population. (Note: Rapid City and Sioux Falls are the only cities over 50,000 population.)

The bill would allow those funds to be available for a wider variety of projects including:

1. Single family and multi-family affordable housing projects that consist consisting of new construction, or the purchase of rental or home ownership housing, substantial;
2. Substantial or moderate rehabilitation of rental or home ownership housing, housing;
3. Housing preservation, including home repair grants and grants;
4. Grants to make homes houses more accessible to individuals with disabilities, homelessness;
5. Homelessness prevention activities, as well as;
6. Providing financial assistance for a community land trust;
7. Homebuyer assistance; and
8. Housing infrastructure costs.

The South Dakota Opportunity fund must be utilized for the development of affordable housing. Affordable housing is defined as:

• Single family homes that have an original selling price at or below the homebuyer purchase price limit used by the South Dakota Housing Development Authority, as of date when the home is sold, or;
• Multifamily housing units having a monthly rental rate that is at or below the calculated rent for the state’s eighty percent of area median income, as used by the South Dakota Housing Authority.
• Housing development guidelines are not applicable to monies loaned for housing infrastructure costs.

Next step: Senate Bill 65 is dead. However, there may be a bill that could be “hoghoused” with a version of SB 65 prior to the end of next week. A hoghouse amendment would significantly alter the bill to such an extent that the bill would no longer relate to the original version.

The Chamber supported SB 65 and will continue to advocate for efforts to support workforce housing.