Sioux Falls Affordable Housing Crisis

Cory beat me to this post (thank you). I figured he would do a much better job of analyzing the situation;

As a primary solution, ARI advocates coordination among all actors in affordable housing: the city, state, non-profits, and developers.

But remember: collectivism is a response to market failure. Even amidst 2.3% unemployment, Sioux Falls employers are failing to provide their scarce workers with the wages they need to support the renovation and construction of decent cheap houses. Since our captains of industry and bumper-car owners are being stingy, we have to run around drawing cooperation lines on concept maps and pouring tax incentives and federal grants into housing efforts.

Ironically I had this conversation Saturday with Mayoral hopeful Nick Weiland. I told him that the city needs to have less focus on annexation and urban sprawl and a push for fixing up our core, central and proper areas of Sioux Falls, which basically is 41st street to Russell and Kiwanis to Cleveland Ave (my educated guess). I’m not just talking sewer/water, roads and curb and gutter, I’m talking properties. This area of town has some of the most affordable housing in our city, unfortunately many of these single family homes and four-plex apartments also need some TLC. But they are perfect for affordable housing. The solution I have offered for several years is to change our TIF program to include landlords and single family homeowners willing to invest in these core houses and apartments and have any other loose ends tied up with low interest or no interest loans from community development or other state and federal programs. If we can give TIFs to luxury condos (Washington Square) we can certainly turn the program over to people willing to help out with our affordable housing glut.

The other issue is that housing costs are not in line with wages in Sioux Falls, and the regressive sales tax system is not helping matters.

At the end of the day, while a study like this is comprehensive and needed, it didn’t tell us anything new. It takes more then a report to change things, it takes a big boot up the asses of our local and state lawmakers to change the rules of tax incentives to get the ball rolling on this.



14 comments ↓

#1 The D@ily Spin on 01.17.17 at 10:21 am

There’s this problem with antiquated and environmental issues for older homes. Slum lords want to upgrade but it’s not economical.
Antiquated: Some homes are plaster walls. Many homes are older wiring. Most homes need a roof. Older siding is wood not pressed composition (termites & rot). Infrastructure obsolescence and lack of attention. Overhead power, not buried. Basements not sealed (flooding).
Environmental: Lead based paint (pre 1980), black mold, wiring and outlets (fire hazard), flood zones.

In other parts of the country the land has value so blocks are bulldozed for new construction. To some extent, that happens here. How about offer city demolition expense?

What works best for housing demand is new subdivisions outside city limits where land and property taxes are cheaper. I’ve noticed activity at Ronning (8th & Sycamore). Another recourse is trailer parks and the new tiny homes concept. The city runs these guys out of town but surrounding communities are receptive.

The city runs on sales tax. They don’t care about homes if they get no property tax. People are a tool, not human. They’re needed for call centers and labor for city services. Politicians, city directors, bankers, and upper middle class live south of 57th. There’s no concern for middle and north. Watching residential and 41st/Minnesota commercial decay is sad.

The future is tiny homes, subcompact cars, small cubicles, and a 10 mile commute. The city wants you for sales tax on gas and groceries. Otherwise, you’re a necessary evil. Once Huether’s daughter moved from McKennon Park, there’s no place for you inside city limits.

#2 Fresh Start on 01.17.17 at 11:42 am

Is Sioux Falls rapidly turning into a 2 class system city being upper class and lower class? Besides the shelters are there homeless people trying to take shelter in wooded and other out of site areas in Sioux Falls. I get this picture of Mayor Huether driving by and oblivious to people trying to stay warm around burning barrels on his way to and from city hall.

#3 Marko on 01.17.17 at 12:38 pm

“The city runs on sales tax. They don’t care about homes if they get no property tax.”

Hmmm… This is based on what?

#4 John Kennedy Claussen, Sr. on 01.17.17 at 2:52 pm

The interesting thing about this study is who financed it. According to the study itself, it was financed by:

“This project was funded with grants from Forward Sioux Falls (a joint venture of the Sioux Falls Area Chamber of Commerce and the Sioux Falls Development Foundation), Sioux Empire United Way, and the Sioux Falls Area Community Foundation and with a matching grant from Augustana University. Additional funding was provided by the City of Sioux Falls.”

So, this study does more than identify the “obvious,” it also identified who worked in collaboration with the culprits, in my opinion, due to its funding. The fact that this study was partially funded by the “Forward Sioux Falls” crowd is laughable at best.

The recommendations this study suggests are all good intended ideas, but they are also enabling ideas that never have us as a community addressing the real problem, which is wages, and which the “Forward Sioux Falls” crowd (Chamber and Development Foundation) are for a large part to blame for, I would argue.

There is obvious wage collusion going on in this town among employers and the business community as a whole, I would allege. If we truly have one of the lowest unemployment rates in the country, then why is there not a “wage war” going on in this town?… If there is no collusion, that is.

A few years ago during the oil boom in North Dakota, we saw a “wage war” due to low unemployment numbers. So to a lesser degree in intensity, however, should we not be seeing the same thing right now in this town as well, given our extremely low unemployment numbers compared to the rest of the country?

Granted, such a “wage war” could stimulate greater housing cost inflation, which would then negate some potential gain for employees from increased wages, but I would rather have that problem in the future, than a greater never ending and enabling dependency upon government programs; while the wealth in this town continue to laugh all the way to the bank and their workers never become homeowners, and get a head of the game, nor become members of the “American Dream”…

It is time we admit that there is wage collusion in this town and call the business community out for it instead of working with them as known or naive enablers.

Now, that is the study or investigation we need to see!….(But who is going to fund it? 😉 )

#5 l3wis on 01.17.17 at 5:43 pm

Like how we have two of the biggest healthcare systems in the country yet the nurses are some of the lowest paid with NO wage war going on between the two of them. Collusion perhaps? Nah.

#6 Warren Phear on 01.17.17 at 6:44 pm

Nurses at these hospitals are low paid? Details?

#7 Bruce on 01.17.17 at 7:39 pm

I know the Sioux Falls HR association colludes on wages. A company I worked with in the past based their call center job wages on their informal study / survey of members.

#8 John Kennedy Claussen, Sr. on 01.17.17 at 11:37 pm

“Wage collusion” is an issue which has not really been discussed in this town or coined yet publicly, but I think it is time we started to admit to its existence and have that debate. It is the core problem to so many issues in this town from housing affordability, food bank needs, crime, and educational advancement.

I know too many people in this town, who have been told by their employer that they have maxed out on their wage scale and that there will be no further pay increases in the foreseeable future. Not to mention, that so many “new jobs” continue to be offered in this town at between $ 10 to $ 13 per hour and this has been going on for about eight plus years now.

Now, overall lower inflationary pressures in recent years have facilitated the employers’ claim that wage increases are not as necessary, but the continuation of such a wage policy over time adds up and works to deteriorate the middle class and those hoping to advance into the middle class and or upper class.

In my opinion, the greatest threat to our City and nation is the continual destruction of the middle class. It is a vibrant middle class, which spawns hope, idealism, true patriotism, commitment to society, and respect for our core values and our fellow man. No illegal immigrants, no Putin, no Chinese, nor Isis can do the damage to our City or nation, that the destruction of the middle class will hand to us in the 21st century, if we do not put an end to this arrogant indifference by some to the need to maintain and strengthen the American middle class.

This arrogant indifference is the result of the failure of the business community to understand its role and responsibility within the social contract. Participating positively within the social contract is not just offering or creating a job. It is also offering a reasonable and just paying job, which enhances our society, and not just creating a job in general where it is allowing the business and its plan, which created the job in the first place, to become indirectly dependent themselves upon the social safety net due to low wages, a safety net which often so many within the business community are quick to criticize and try to undermine, while at the same time they hypocritically become increasingly dependent upon it through their employees and their employees low wages caused by their (employers) own failing self-centered policies….

It is rather ironic, that in a town where the business community is severely opposed to the bargaining power of the worker, that they blatantly at the same time have no opposition to the obvious gathering of corporate thought and positions on the wages of the workers in this town from a corporate perspective….. This is what is called unequal bargaining power at the ultimate level, union or not, and it is disingenuous for the business community to fear and attempt to limit the just rights and pay of the worker, when their own demonstrations of unequal power illustrates that if there should be any real fear, that it should not come from the potential actions of the workers but rather from the actual and continual actions of the employers….

#9 Marko on 01.18.17 at 5:46 am

Great question, Warren Phear. Everybody wants more money, including nurses. Low paid? I guess that depends on what you mean by “low.” Checking AAN and other databases, I see nursing salaries in Sioux Falls, SD or Fargo, ND all show fairly comparable pay scales for similar cities throughout the US. Now, are salaries less than NY, absolutely. One of the easiest database to compare by location and specialty is indeed.com, which works for all jobs.

And Bruce, if your claim that the “Sioux Falls HR association” “colludes” on wages based on an “informal study/survey raises a lot questions, but it’s a long way from supporting collusion.

I’ll bet you’re thinking about the Sioux Empire Association for Human Resource Management, and I’m pretty sure they’re not in collusion business, but if you “know” otherwise, please show concrete details.

That SD is a low-wage state is not a surprise, and the reasons for that are at once simple and complicated. But Claussen’s allegations would be more persuasive if they were precise, supported by detailed facts about specific employers. Calling out groups as culprits might give voice to certain frustrations, but there are far more effective and productive ways to discuss this problem.

#10 Jeff on 01.18.17 at 6:16 am

Warren

http://www.nursegroups.com/salaries/RN/SD

Nurses in SD are the lowest paid in the nation. We used to be able to say “at least we’re not in Mississippi”, but we can’t even enjoy that distinction anymore.

The wages at both of the big hospitals in town are virtually identical. They tell the employees that they pay a competitive wage, but when you dig a little, you find that they only compare wages to other hospitals within their own health system and maybe to a couple of other, cherry-picked facilities in neighboring states that are sure to be in line with what they want to pay.
They always justify the low wage with the old “the cost of living is lower here” argument, but I don’t see them getting a South Dakota discount when they go to buy groceries or gas or to try and buy an airline ticket out of Sioux Falls.

Don’t get me wrong – considering that all of the worker wages in SD are low, the nursing salaries look pretty good. It’s just that they’re so much better almost anywhere you look outside of our state. Our hospitals are big, modern well-equipped facilities and the nurses take care of the same sick and injured patients as the hospitals in Minneapolis or Omaha or Kansas City, but get paid about half of what those nurses get.

I know of one nurse that worked at one of the hospitals here in town for over 16 years, at which time she hit the top of the pay scale for nurses ($30/hr). One of the new nurses she worked with, had 1 year of experience, left to take a nursing job up in Minneapolis at one of the non-union hospitals, and immediately started at $36/hr. Oh wait – I guess the cost of living is so much higher up there.

#11 The D@ily Spin on 01.18.17 at 10:51 am

Something not addressed here is the impossible route through city permits. If you are a private citizen, peel off hundreds through city hall and pay exorbitant fees. Then expect them to come by your home daily whether or not you’ve started an improvement. My experience is they need somewhere to go in order to justify their pay. Once you finish your project, they didn’t keep a record and cite you for not getting a permit. The best recourse is build it without a permit. Usually, city ordinances don’t apply and always accuse them that you got one but they failed to keep a record.
Best advice, don’t buy inside city limits so you’ll not be harassed but keep a PO Box so you can vote against anything to do with unconstitutional city government.

#12 Warren Phear on 01.18.17 at 12:51 pm

Cost of living low in SF? I would not call $200 a square foot for a new home low. I would not call flying out of Joe Foss low. I would not call hy vee groceries low. I would not call our real estate taxes low. But, I would call our salaries here not just low, but atrociously low. I was not aware it was the same for nurses. Sad, I will probably lose the closeness of a loved one to this in the not to distant future.

#13 John Kennedy Claussen, Sr. on 01.18.17 at 12:53 pm

Marko,

When you have a business leader claim that building an arch across the Sioux River will help “work force development,” while at the same time, that particular business leader owned a business which paid many of his introductory workers at $ 10 a hour, then you must ask yourself just how serious is the business community about developing “work force development” if they are not willing to start with their own businesses by offering living and or competitive wages to their own employees?

The attempt in this town to try to attract outsiders to come to Sioux Falls in recent years to take our job offerings is merely an attempt to suppress wage inflation rather than pay those who already live here a higher and more competitive and decent wage, I will allege.

You ask for specifics, well, I blame the entire business community in this town. As I mentioned above, for almost ten years now, a lot of jobs in this town have hovered at $ 10 to $ 13 per hour, while our unemployment rate continues to decline in this town. How is that possible unless they are extremely successful in getting a new influx of out of town employees to show up to suppress wages? And even if you buy that theory, then that alone is a form of wage suppression orchestrated by wage collusion, I would allege.

The only wage inflation I have noticed in Sioux Falls appears to be in the fast food industry where wages have gone from $ 7 up to $ 10 per hour in the past few years, but that is because those types of jobs generally cannot attract out of town job seekers, thus those employers are forced to accept the universe that they employ in, which makes it harder to suppress wages and thus institutes a form of wage collusion, which further proves my alleged comments that there is real wage collusion going on in this town by the business community….

#14 John Kennedy Claussen, Sr. on 01.18.17 at 1:09 pm

“and thus institutes a form of wage collusion failure,”