State Senate passes legislation to clarify workforce housing bill from 2022

SB 41 cleans up language from a bill passed by the legislature in 2022, which would allow $200 million in public dollars to go out to support workforce housing developments.
The South Dakota State Capitol Building in Pierre.
The South Dakota State Capitol Building in Pierre.(Austin Goss DNN/KOTA)
Published: Jan. 13, 2023 at 2:43 PM CST
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PIERRE, S.D. - The South Dakota State Senate easily advanced a bill Friday to correct a mistake made on a bill passed by the state legislature last year.

Senators voted 29 to 2 to advance SB 41, clarifying confusion around how $200 million in money for affordable housing would get out.

The bill is intended to provide more housing for workers looking to move to South Dakota, a topic the legislature has spent years looking into.

“South Dakota businesses need more workers in our state to keep our economy strong,” said Sen. Casey Crabtree (R-Madison), prime sponsor of the bill. “To get more workers, we need more housing.”

Crabtree explained that grants and loans available from the funding will be overseen by the South Dakota Housing Development Authority (SDHDA). A “sub-fund” within SDHDA will be created to hold the money.

Cities sized over 50,000 will only be able to receive up to 30% of the funds, while the rest of the state will be able to get the remainder. Grants can’t exceed more than a third of a project’s cost, and projects in communities with over 50,000 people can’t use both loans and grants from the funding.

The initial bill that passed last legislative session required several rounds of reconsideration before it was finally able to pass in the State House. Gov. Kristi Noem’s office threatened to veto it, based on concerns about the money going to SDHDA. This year, the Governor’s office is supporting SB 41.

Many fiscal conservatives have ardently opposed the idea because of concerns about government intrusion on the private sector.

“We are competing with the private enterprise, when we put government money into the private sector,” Sen. Tom Pischke (R-Dell Rapids) said in opposition to the bill. “Our housing development sector here in South Dakota is doing great. If we have a great thing going, why would we want to undo a great thing.”

“Sometimes markets fail or don’t adjust fast enough,” said Sen. Reynold Nesiba (D-Sioux Falls). Nesiba pointed out that a large portion of the funding for the bill came from the American Rescue Plan Act (ARPA), a bill that President Joe Biden championed in Washington.

The State House did not gavel out on Friday until the first reading of the bill had been completed in their chamber. Supporters in the House are hoping to get the bill to Noem’s desk before the end of next week, but will require two-thirds of members-elect because of an emergency clause attached to the bill. If passed with the emergency clause, funds could begin going out to communities by next spring.