Expensive home sales as ‘News’ shows the enormous gap between the wealthy and working poor in Sioux Falls

Over the past couple of years we have seen this rise of expensive home sales as somehow being ‘news’. We get to see these enormous castles on various news websites as somehow being a testament to the booming economy of community. All it says to me is that our industrial complex hospital systems are paying their doctors too much.

What’s sad is that week after week as we have to endure the sales of the week (which always exceed $500K and sometimes teether on the million dollar mark) while most working class folks in Sioux Falls are struggling to pay a mortgage (if they are so lucky) or even pay rent and feed their families. Don’t be fooled by the poorly decorated rich peeps homes that are selling like hot cakes, Sioux Falls has an enormous housing crunch right now that has nothing to do Dr. Ding Dong’s Lake Estate.

Let’s admit it, unless you qualify for some charitable or federal program (because you suddenly have 6 kids jammed into a 1 bedroom apartment because you don’t know how to use a condom) most working poor people are left behind. And even if you can manage to keep your willy wrapped and work three jobs, it is virtually impossible to build a new home in Sioux Falls for under $200K.

And rents, they are astronomical because we have allowed the apartment developer market to regulate itself with little interference from local or even state government (besides handing out TIFs like candy).

The carrot dangling by some of the news organizations is ridiculous. The constant ‘look what you could have if you just worked harder’ (or had a medical or law degree) isn’t reality. Reality would be for these same ‘news’ organizations to push for more pay equality, living wages and ending wage collusion between our top employers in town, then we can move onto affordable housing.

Let’s start talking about the real housing issues in Sioux Falls instead of Dr. Ding Dong’s indoor pool vaulted ceiling irish pub hot tub gourmet kitchen and heated floor garage.



17 comments ↓

#1 "'Extremely' Stable Genius" on 06.16.19 at 7:37 pm

It’s a crime that developers in this town are not building $ 150,000 to $250,000 homes here.

I guess it is what a good Republican would call the realities of the market. But is it? Or, is it merely greed based on the margins with no respect from the contractors to their duty to the social contract in this town?

The excise taxes should be adjusted to force contractors to favor building lower priced homes in this state as well.

Everything is out of whack in this town. First Premier employees get first right to Events Center tickets. Most cannot afford to attend the Pavilion. General swim passes do not work at the Aquatic Center. And wages are too low in this town. Yet, we build $500,000 homes like hotcakes, Arcs are built to honor the rich, they construct $2700 a month condos, and even overbuilt bunker ramps. No wonder when something free like the Levitt comes along that it’s a big hit…..#What?….#Free?….#AreYouKidding?

#2 Mark Peterson on 06.17.19 at 6:36 am

I would suggest Extremely stable that you become a builder and start building homes in that price range. Good luck trying to build $150,000 homes any longer in Sioux Falls. Builders just build for the market. It is called the free market. You cannot force them to build just to make you feel better. And if people were not interested in the high end sales I would guess that local news would not publish the lists.

#3 l3wis on 06.17.19 at 7:16 am

MP – of course they are interested in the sales, I mention it above in the ‘dangling of the carrot’. It’s the same reason people read TMZ. You are right, the free market has forced home builders to build more expensive homes because of the false inflation of home prices by the real estate market. The SFSD recently said the valuation for the school district is $11 Billion, yet they are broke. Something has to give.

#4 Conservative Here on 06.17.19 at 10:18 am

I think the real estate market is a bit inflated. I was shocked when my wife looked up what our house was worth on Zillow. I know what I paid for my previous house and last house and both have gone up in value by considerable amount in short period of time. My first house I bought in the 2004 boom for $119k sold it for 165K 9 years later after finishing the basement so I considered that a reasonable increase. My neighbors start selling in that same neighborhood over the 200-215k mark 3 years later and these are cookie cutter houses so not much difference. This is a little shocking that the house I built in 2004 would almost double in value in 10-12 years, that seems insane to me and unrealistic.

Matt also has a point that no one will build you a house in SF for anything close to 150k. I think the going rate is around $200-250 a square foot, that puts far north of 200k. So I agree its pretty tough to buy a home in Sioux Falls anymore for someone who make less than $60k a year. I also do not begrudge the person making the bank and buying a crazy house. While I don’t really understand that kind of spending on some of these luxury items, its their prerogative. I wish I had the cash to build and sell these homes to these folks it would be nice.

I think the part I really truly struggle with is, what is the solution to these challenges? On one hand its not govt’s job to interfere with the housing market to curtail pricing but, on the other hand we are pricing regular folks out of the housing market. While I know not everyone can be a home owner, its better for the community at large to have more home ownership vs less. This is a tough nut to crack but, maybe the silver lining is maybe some good folks will start buying homes in the central part of Sioux Falls and take some pride in their neighborhood again. I am saddened when I drive through neighborhoods just west and east of downtown as they now look like just run down crappy houses anymore. I was driving on 6th and Cliff this weekend and saw once normal homes with holes in the siding of with some neighborhoods looking like run down Ghettos: something I would have only seen years ago on movies.

#5 "'Extremely' Stable Genius" on 06.17.19 at 3:00 pm

MP,

If the contractors believed in the social contract they would build homes in the 150,000 to 200,000 level, but they prefer the margins of the 500,000 homes. It’s pure greed. A course when you are unwilling to pay workers more to get more workers, then I guess its a convenient argument, too, that the workforce here in town does not meet the demand of the affordable housing interest, huh?….#HowConvenient

Oh, and it wouldn’t just make me “feel better,” it would also be good for the middle class if our contractors understood their duty under the social contract. As far as forcing contractors, well, we have all kinds of laws on the books that make people and corporations do certain things, why not structure our excise taxes to promote affordable housing construction?

Government exists to do what the private sector fails or is unwilling to do and we are all the government. The government is not some foreign thing even though Ronny Reagan encouraged many of you back in the day to believe so.

#6 Conservative Here on 06.18.19 at 9:02 am

ESG,
I would not say its “extreme greed” its called business. If I can build house X and make more money, why not do that. Its good business to maximize profits and the majority of home builders are not multi millionaires but, small to medium businesses trying to make a buck. There are only a few Llyods and Costellos around.

This social contract thing is such a fallacy and is not practiced in reality. At the end of the day the only person who is going to look out for you is YOU. This is not meant to be cruel, its reality and no one can escape it. Look around and you will see government, businesses, neighbors, and even families will do what is in THEIR best interests first and everyone else will be considered secondary.

With all due respect, the fact that Ronald Reagan said government is the problem, well frankly it most often is. I am not saying government does not have its place but, more often than not govt sucks and the fact there is so much divide in this country is due to government. Government is inefficient and adds layers of red tape that is unnecessary.

Lets look at our local government and I KNOW Scott will agree with me on this, the local government has completely overreached its intended purpose. No where in the charter does it say we should be building, Aquatic centers, public/private parking ramps, the Denty, etc. That was NEVER the design and guess what the bigger govt grows it becomes rife with corruption and greed because as a private citizen I cannot escape being taxed for crap I dont want and I bet most of us never wanted any of that stuff we paid for. If I don’t like the prices of company x or their practices I can choose not to pay and find a competitor. I am not advocating everything is perfect but, this social contract thing is a myth that sounds good in fantasy land but, in the real world it does not exist. Thats not a knock but reality and if you are older than 7 years old most people know that

#7 "'Extremely' Stable Genius" on 06.18.19 at 4:56 pm

CH,

Social contract is practiced by those who care and have a conscience; and to the degree that it is not practiced, well, that’s where or when the politicians are suppose to step in and show some courage and make it happen, but they are not.

And your right, “extreme greed is called business,” but it is merely a form of business. One decides as a capitalist if they will practice genuine capitalism or predatory capitalism early on; and there again it’s up to our political leadership to assure that predatory capitalism be stopped, but that usually does not happen now days.

The failure of the business community to address the affordable housing issue in this town is really a failure of our political system, because our polticial leaders are not reading the riot act to the private sector when it comes to housing in this town and state, but they should be. Instead our political leaders in this town have become nothing but stool pigeons for the local developers and the developers’ wishes.

Our current Mayor has said that he does not like the words “affordable housing,” but why? Are some trying to take the issue of “affordable” off the table? Are they just trying to address housing in terms of its production and not its affordablity? I guess if you do that, then we are already a success, aren’t we? I mean if you produce a bunch of Cadillacs but don’t talk about the costs of each of them, then I guess you might have produced a lot of cars, huh? But for who?

#8 Conservative Here on 06.18.19 at 7:40 pm

VSG

The idea is that as a “society”, we are all obliged to help our “fellow man”, and therefore the State, supposedly representing society, has authority over the individual. A contract implies a MUTUALLY AGREED upon arrangement between two or more parties. While out govt may lay claim over an individual, it does so by force and the threat of force, not through a mutual agreement on my part. I certainly don’t remember signing any contract. This social contract stuff is always born out of the defenders of big government and I say no thank you, sir. I will do as a please and help who I wish and not be bound to any set of parameters as I bet your paraments and mine may not align. Is it the right thing to do to help my neighbor with his lawn if he is laid up or disabled, sure it is. Should I be forced to do it under some social contract, no I will do as I please and the government has no right to tell me I am wrong. A contract needs to have some sort of enforcement and since there is none with this social contract stuff, its just bogus and holds not basis if fact or reality, it just sounds nice

Getting to the housing issue, I agree its a challenge and you will get no argument from me but, I too hate the term “Affordable Housing” because its a politically correct phrase to sugar coat what it really is, subsidized housing. Another issue I have is what is Affordable mean really? Affordable is a relative term to different people. Persona A can afford a $1500 house payment but, maybe the guy next to me can’t, it’s another stupid term and makes no sense. Same logic for the “living wage” as I can live off $1000 bucks a month if I had to but, the idiot who can’t manage their money or live by their means cannot.

Your Cadillac argument is flawed for a very simple reason, the law of supply and demand. If the market has a need for Cadillacs more than it does the Volt, well than GM/Chevy is going to make more Caddy’s. The free market always creates proper needs in the end. A really shitty example of this is Pay Day loans (yes horrible fucking business) but, regular banks would not give these people loans because they screwed up their credit, so the void was filled. People used that service like it was candy and yes its predatory and I am glad Brennan and his ilk are gone but, would you argue the evil credit union down the street should give the guy who has shown no willingness to pay his loans back on time a loan? I doubt it, most sane people would not because the odds of getting back are slim to none. Society cannot fix everyone’s problems some people are going to be left behind and in this country, you have to try pretty hard for that to happen.

I guess when its all said and done, people are free to choose to do as they please with their money and resources and I think its also morally wrong to force, coerce, or tell people what they should do with it. We can agree to disagree but, I always lean on the side individual liberty vs this collective society stuff.

#9 "'Extremely' Stable Genius" on 06.18.19 at 9:01 pm

CH,

Your review of the Cadillac argument is flawed, because I have never denied that there is not a demand for higher priced homes in this town, but there is also a demand for median priced homes, too, which are not being built. Hence, the developers are failing the social contract.

When you talk about a contract being implied between two individuals you must remember that a contract begins as an offer and the initial offer made by those who wish to construct homes is one that helps a society as a whole, or community, and not hinder it, else it is not a bona fide offer, or one which fulfills the initial promise which is to be a good and/or positive corporate citizen.

One can also play on the word of “implied” in that there are both explicit and implicit contracts, where the explicit speaks to your “MUTUALLY AGREED” assertion, where the implicit speaks to the inertia which makes a contract credible and sustainable. It is this implicit necessity that is a component of a sound housing development within a community, which is currently lacking because the developers in this town are failing their expected mission or should we say their part of the social contract.

#10 Conservative Here on 06.19.19 at 8:34 am

ESG
You make my point on the social contract issue when you speak about Developers in this town are failing their expected mission. Its not their mission to build certain houses nor can anyone force them to. My point on this still stands its NOT a contract because:
A – They never agreed to it
B – Its NOT enforceable
This just sounds nice but, fails in reality and everyone knows it, its just not true.

I am not arguing your point that we could use some more median housing but, no one is obligated to do it and that is where this social contract thing falls flat. As I stated above all these “social justice ” type items are just a defense of adding more government. I disagree with the whole premise of govt stepping into the fray to force someone to do it because that is the ONLY way you get Developers to focus on this. There is demand in the market for the higher end homes and many of the developers are NOT multi million dollar companies so they need to make money as they work pretty hard. The construction industry is no joke, long hours, back break working, short time frames, and a lot of stress, etc.

It appears many times that folks with your stance are envious of someone’s success and instead of looking at the value they bring and hard work, you are more concerned they are not catering to the preferred group of people you want them too. What too many people forget is that folks that have businesses employee people, create careers, and help family’s put food on the table. Are some greedy as hell and could treat their employees better, YES but, lumping these folks all into one bucket and calling them greedy and implying they don’t pay well I beg to differ, my son works construction and they pay pretty well. Many of the contractors are high school educated and built their business through hard work and showing their skills. They are not a bunch of Ivy league elitists who had their mommy and daddy’s money to start a business. So the broad brush painting your are doing is unfair and does not represent reality.

I guess the real test would be to ask you, do you employ anyone, have you ever created a job or jobs for anyone, have you ever run a business. If so are you focusing on maximizing your profits so you can do MORE and employ more people or are you just looking out for your neighbor. I would say the best way you can look out for your neighbor is to teach a man to fish vs giving him a fish.

#11 "'Extremely' Stable Genius" on 06.19.19 at 10:25 am

CH,

You are mistaken if you think wealth automatically means hardwork. Because I know a lot of hardworking working and middle-class Americans.

What you conservatives don’t understand is that the greatest threat to our country, and thus to our democracy, is not China, Putin, climate change, or even immigration, rather it is the collapse of the American middle class over the last forty-five years and its continual collapse; and the Sioux Falls housing crisis and policies exemplify that collapse, and they also exacerbate that collapse as well.

We have a housing policy in this town that is out of control with no intent to protect the middle-class; and some day we will pay for that as fewer people become owners who can afford to pay decent tax bills that can sustain our local governmental entities.

Our housing policies in this town combined with our wage policies in this town are working in concert like two diseases working to kill the patient; and in this case the patient is the middle class. But our political leadership says nothing and does nothing about it.

I also believe at times like this, that government is the answer and primarily because the government is us, or at least it is suppose to be us.

#12 The Guy from Guernsey on 06.20.19 at 10:54 am

Ford has discontinued the manufacture of automobiles (coupes and sedans, excepting the Mustang).
A motivating force was the purposeful choice of consumers to purchase more expensive “non-automobile” vehicles (SUVs, pick-ups).
My, my. Would should be the act of intercession by the government? Force Ford to build automobiles? Force consumers to buy automobiles? Meh, why not both?

#13 Conservative Here on 06.20.19 at 11:13 am

VSG
Lets go with your theories then on this concept. What actions would you propose to make this happen?

1 -Is this a tax we all pay to fund this
2 – Do we create laws to say developers who build x amount of homes must make y amount of homes in this price range
3 – Do we give developers incentives to build lower costing homes

What does a wage policy look like? Does it look like Seattle and making $15 an hour minimum wage? Do we force or incentivize private business’s to pay more and how is this done.

I would need you to explain but, when its all said and done, this money will not come out of anyone’s pocket but, yours and mine. We collectively will pay for others and truth be told, I don’t want to subsidize your house payments or make up your wages. I am not trying to be a jerk but, its called personal responsibility. I think we got it pretty good here and we have a very robust middle class. I drive all over town and I seen thousands and thousands of houses that have been built in the last 10 years and they are not rich people buying them but, middle class people. I am struggling to see this large problem in Sioux Falls

If you want to talk nationally, yes there is a larger problem and corporations sending all our jobs overseas is a majority of the issue. NAFTA alone has cost this country most of its manufacturing jobs that used to be good blue collar jobs. Ross Perot said

“We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor, … have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south.
… when [Mexico’s] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it’s leveled again. But in the meantime, you’ve wrecked the country with these kinds of deals”

So our middle class was hollowed out years ago when D’s and R’s got together and supported big corporations and put this into law. This was a bipartisan disaster and we have paid dearly for it for nearly 30 years. We could debate this all day and I bet we find some common ground but, in Sioux Falls, we have it pretty good and in general I am proud of this city and the people in it.

#14 "'Extremely' Stable Genius" on 06.20.19 at 9:15 pm

CH,

NAFTA should have never happened, or least not the way it did. Favorite nation trade status should also have never been given to China either in the carte blanche manner that it was. We would probably agree on both of these facts and they have played a big part in the continual decline of the American middle class.

We need a national commission, and quickly, to identify what we can do in terms of tax policy and trade policy to stop the bleeding of the middle class and to work to rebuild it.

One of the ways locally it could be done is to use the State’s excise taxes in a way that makes it more lucrative for contractors to build median priced homes than executive homes.

Tax rates for the wealthiest of Americans need to go up too and not down, so we can reduce our national debt and then properly fund education and health care for all Americans inorder to give the middle class and below some breathing room.

To answer TGfG’s comments, I think TGfG has identified something that we haven’t been talking about, and that is that as the middle class has declined the upper middle income class has grown, but it will never replace in size the once great middle class. And this rising upper MC want SUVS not cars, because they are bigger, more expensive, and are a status symbol, which results in the closing of car plants along with the fact that the declining MC cannot afford new cars like they use too.

But let me close with this thought. Some will say that the social contract doesn’t exist, but what do you call it when a conservativde businessman starts a business in hopes of hiring people with a good work ethic. Is he not hoping for the average worker to have not only an ethic, but a quality which is a part of the social contract in the sense of contributing to society? You see, we all believe in the social contract, we really do, but the problem is that our political leaders and business leaders too often expect a work ethic from the working poor, the working class, and the middle class, but what about a corporate ethic too?
Just as we do not want businesses destroying and polluting our environment, we also do not want businesses destroying and abusing our once abundant American middle class. Or better yet, scientists say that the Amazon region is the world’s ecological lungs just as the American middle class are the lungs of our nations democracy.

#15 The Guy from Guernsey on 06.22.19 at 9:13 am

ESG,
Please take the liberty to exercise your participation in the social contact.
The least expensive lot in the City of Sioux Falls is listed for $30,000. Buy the lot and build toward that which the social contract calls you.
Act as the contractor. Rather than hiring subcontractors (who will pay crap wages to their employees), hire and direct your own crew. Pay your workers the “living wage” to which the social contract speaks. Purchase and provide for them the Obama-era health insurance plan (which, by your testimony, has never been better AND never been less expensive; Snort! Chuckle! LOL! Snort!).
Sell the product of this for $150,000 to $200,000.
BTW, due diligence in this plot of ground places it near the corridor for the future high-speed train – a highly sought after address in the city.
Good luck and best wishes.

#16 "'Extremely' Stable Genius" on 06.22.19 at 1:28 pm

TGfG,

What is that capitalists say? Oh yah: “I make it up in volume.”

#17 The Guy from Guernsey on 06.24.19 at 10:45 am

ESG,
There are multiple lots available in the same neighborhood. js

Have at it in your exercise of “I’m losing money, so I am going to buy a bigger truck”.

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