City of Sioux Falls Finally gets it together on housing, maybe?

So after our unemployment rates drops to almost zero, and we have more warehouse jobs than workers, the city finally engages on a housing plan, read it HERE.

While Director Matt Tobias’ (not sure what his title is since the Poops Admin likes to make up fancy titles every 3 months) presentation was the best I am not sure why it took a decade and a massive board to finally implement a plan just a couple of months from a city election. Matt made great points that I have been harping about for years like promoting the community development programs, increasing the income level of qualification and pushing for up to $30K loans at 0% interest.

Like I said, glad to see the wheels turning, but I am also wondering why it took so long. We have known for over a decade that the city was growing at an enormous rate and density in our core was crucial. Many administrations, private non-profits, councilors and developers have talked about it. In fact I attempted to bring in the Strongtown’s founder over 10 years ago to speak on it, but I couldn’t get enough people to help donate to his gas money and hotel room. When he eventually came, I had to chuckle when people said to me if I had heard of him.

I will tell you why it has taken so long to get the ball rolling; GREED and the cornfields are running out.

Just listen to what Greg Neitzert said about it, once again defending the developers and contractors and how gosh darn it, they need to make money or the plan won’t work. I agree, anyone in business for themselves needs to make a profit and they need to eat, but I have rarely met a large developer in this town that is living in central Sioux Falls in a 900 sq ft home. With their profit margins, no state income tax, low labor costs and multiple tax incentives, they do ok. There is absolutely NO reason why they can’t do projects in the core building density and NOT make money.

I also look at this as LOCAL economic development. Most of the smaller contractors that do this kind of work are local, they live here, their workers live here and likely they buy materials and tools here. That all gets recirculated into the economy.

Don’t fool yourself, these policies have been researched for a long time, but like most things in this city and even country, if someone can’t figure out how to gouge the consumer the feckless leaders don’t act. This is one of the main reasons it infuriated me that they are asking for a raise. I guess they think they need to be paid more for doing less.



12 comments ↓

#1 Very Stable Genius on 01.06.22 at 12:36 am

“Accessible”? When the mayor first ran for office four years ago, he claimed he didn’t like the word “affordable”. I guess that campaign promise has been met, but “accessible” means available and not necessarily “affordable”. It’s like when 45 first became president and his then HHS cabinet member, Tom Price, talked about replacing ObamaCare with a plan that made health care “accessible” to all, but then Senator Sanders reminded us all that a new Cadillac is always “accessible” to all, it just a question of whether you can afford one.

#2 Conservative Here on 01.06.22 at 8:36 am

Scott – I don’t understand this statement

“I agree, anyone in business for themselves needs to make a profit and they need to eat, but I have rarely met a large developer in this town that is living in central Sioux Falls in a 900 sq ft home. With their profit margins, no state income tax, low labor costs and multiple tax incentives, they do ok. There is absolutely NO reason why they can’t do projects in the core building density and NOT make money..”

What business does work not to make money? I believe that’s called Charity and no one is required to do that. I think that is why I always have such an issue with your ideas in that there is some expectation that someone who is successful is EXPECTED to give it back. Please don’t get me wrong I think people should give back but, lets be honest if most of us did give back you wouldn’t have a blog to complain about all the stuff you complain about because we would be in a selfless society. I am not sure why we as Americans always expect someone who is successful to bail out those who are not. In this town I cannot for the life of me understand why you cannot eek out a living and even live decent if you have your head removed from you rear end and use it. I have young adult children with no college degrees living on their own quite comfortably with one making $15 an hour in an entry level job. There are plenty of places to rent but, people need to make better choices with their money and time. There is always going to be a certain segment of any population anywhere that cannot get it together and be productive members of society but, I don’t think is our responsibility to hand hold them and require others to “give” them stuff.

I am not here to argue about TIFFs or any of that stuff as I don’t believe in them either and if they didn’t have them the costs would just be passed on to us in one way shape or form. At the end of the day we pay for them one way or another

#3 l3wis on 01.06.22 at 9:40 am

I’m not sure I was asking for someone to work for free. I just think the profit margins are bigger in new homes and apartments Then they are for remodels, but it is still profitable. And to also clarify, a loan is not a handout.

#4 Very Stable Genius on 01.06.22 at 10:22 am

Glad to see that the bureaucrats are still using the word “affordable”. They haven’t attached themselves to the housing doublespeak.

Affordable housing has become a national problem due to the collapse of the middle class and the loss of decent wages. For too long, especially in Sioux Falls, developers have been too worried about building executive homes instead of tract middle class homes. These executive homes cater to the wealth class and the growing upper middle income sector, with the latter being a group that is not taking all former middle classers with them.

In recent years, the only solvency that local developers have given to middle class citizens – in terms of affordable housing – in this town is these slab homes with no basements for a town that had three tornadoes in one night.

When these bureaucrats speak of putting a “dent” into the problem, that doesn’t sound too encouraging, if you ask me.

The emerging problem, however, which no one is talking about here, is how fast rising home values will cause people to no longer be able to afford their current homes due to rising tax and insurance costs. Then what?

Eckhoff spoke about TIFs and how the state aid formula takes into account TIFs for economic development projects, but what is not mentioned here is how educational funding in this state is finite and when TIFs are recognized it takes money from a potential pot of money for education and does not add to it. When the state makes up lost revenue for education due to a local TIF, its funding a local TIF at the expense of students throughout the state instead.

The Aberdeen concept, which Eckhoff mentioned, would tax everyone else in a given city, which in turn, raises everyone else’s taxes and makes affordability for existing home buyers that much harder once again.

But they are right that it is a complex problem, which has been brewing for sometime around here. This issue should have been dealt with over twenty years ago, but instead all we have to show for this time is a fun downtown where yuppies have replaced loopers, a dented Events Center, some comfy chairs at the State Theater, and a new chicken sandwich.

#5 D@ily Spin on 01.06.22 at 10:59 am

It’s late but certainly time to address affordable housing. You can’t attract or keep another Amazon without somewhere for people to live. Next, there’ll be major money thrown at an unqualified inferior construction developer. Corruption will inflate land and material cost. What you get will be clapboard tract homes with no resale value. It’s Sioux Falls Dictator Charter. The usual and what’s become normal.

#6 Conservative Here on 01.06.22 at 12:58 pm

Scott – I guess “not make a profit” sure sounds like working for free. No one works for free and making money off more expensive homes is where the money is at. If someone has a choice to Build home A and make 100k or build home B and make 50k, the answer is always going to be A, that is business 101. Businesses are not habitat for humanity, they are there to make a money period. They do not work for No cost, free, or whatever you want to call it. (stop trying to church it up dirt LOL)

I would challenge anyone to find me one contractor that will build a 150k house these days and not have it be a huge piece of crap. If you talk to anyone in this business they are so crazy busy with everything these folks are maximizing their time for more profitable jobs, not to mention the labor shortage. The days of 150k houses are done for now unless we have a major economic meltdown. Rehabs are very costly as well and if you think about it, unless you can do the work yourself, why would someone dump 50-100k into a house in central Sioux Falls on top of the 150k to buy the property when you can just buy something newer and in a nicer part of town. Lets face it, regardless of what people say, I don’t see a lot of people wanting to move the inner part of town as many homeowners in these areas don’t keep their property up and its most peoples number 1 investment. Its sad to see but, many of the neighborhoods I ran around in as a kid are just dumps and the properties look terrible! Areas like 18th and Grange used to have nice middle class homes and now I am not sure you could pay me to live around there, its really sad but, can’t make people keep their properties updated

#7 Erica on 01.06.22 at 2:31 pm

I am all on board with not attracting Amazon to the area or other businesses like them.

The Govt never does anything effectively, efficiently, or under a realistic budget. They implement numerous amounts of red tape and unnecessary regulations creating more problems costing more money… the taxpayers money.

Govt shouldn’t be in the business of business. They should make it as easier for businesses AND property developers to exist and let the free market decide which ones will be successful or not.

#8 Fear & Loathing in Sioux Falls on 01.06.22 at 6:25 pm

Oh good, Brookings is having a Burger Clash. I wonder where they got the idea? You would think a university town would have better things to do. Oh, that’s right, it’s State. #GoYotes!

#9 The Guy From Guernsey on 01.06.22 at 8:31 pm

Why TF is the City of Sioux Falls spending $2.9 million (annual) to support “land acquisition”?

#10 The Guy From Guernsey on 01.06.22 at 9:29 pm

“Eckhoff spoke about TIFs and how the state aid formula takes into account TIFs for economic development projects.”
The Councilor Erickson School of Government Finance!

If one were to look only at the simple outline of the formula for state aid to school districts [Local Need – Local Effort = State Share], this would seem to be true …
… except this one little detail:
“When adjusting levies each year, the proportion of state and local effort should remain constant.”

Tax levies upon local taxpayers need to increase in order to keep the state proportion relatively constant. The taxing authority, in this case the school district) might even need to “opt-out” of state maximum levy rates in order to do so, while meeting Local Need (which interestingly enough is largely formulaic, based upon student count).

#11 Very Stable Genius on 01.07.22 at 12:34 pm

“The Councilor Erickson School of Government Finance!”

So true, so true. Erickson suggested this reality during a TIF discussion in the early spring of ’18 concerning a TIF for the development across from the Levitt.

#12 Very Stable Genius on 01.07.22 at 4:31 pm

My final recommendation to the Mayor and his leadership team (bureaucrats) is that they might want to get on message together. Is it “accessible” or “affordable”?

( and Woodstock adds: “‘accessible’?”…. “What the hell does this problem have to do with the ADA?”…. (“Put a dent into it?”…. “I once put a dent into my Yugo and I still couldn’t get it to work”…. ))