Funds for ‘workforce housing’ likely won’t be ready for this year

Published: Apr. 20, 2023 at 6:04 PM CDT
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SIOUX FALLS, S.D. (Dakota News Now) - During the first week of the South Dakota state legislative session, lawmakers pushed through a bill that funded “workforce housing projects” with an emergency clause so the money could go into communities immediately.

But just a few months later, it seems more likely that the money will not go out in time for this year’s construction season.

Efforts to get government out to to build workforce housing are taking longer than lawmakers would prefer.

Last year, when lawmakers passed the bill establishing and funding a housing infrastructure loans and grants program, the bill was stalled up due to questions about the language contained in it.

This year, one of the very first bills passed by lawmakers cleaned that language up and was signed by the governor with the goal being to get the money out the door in time for the 2023 construction season.

On Thursday, lawmakers on the executive board learned that their efforts were effectively futile. The South Dakota Housing Development Authority said that the earliest they could even start reviewing grant applications would be August, and then it would take more time for the money to go out.

Senator Casey Crabtree has been the lead on the bill and said developers are frustrated by the pace of progress.

“It’s a significant amount of dollars, there is no doubt about that. We want to make sure there is accountability and that the need is being addressed that the legislature saw,” explained Crabtree. “The delay is frustrating, but we aren’t going to work our way out of this in just one construction season either.”

Lawmakers also raised concerns about the oversight that the Governor’s Office of Economic Development (GOED) had taken on the project. One of the most hotly-contested points on the 2022 bill was which state agency should be tasked with administration of the funds.

”I think the legislature as well as the economic development community all have major concerns that we may miss this construction season,” said Crabtree. “There have been some unanticipated changes there that may have led to that delay. We were really looking at where we are going to finish at, when those funds are going to be put to use, and how we may be able to expedite that process.”

Even for those who initially opposed the bill, like representative Chris Karr, the desire to follow through now trumps former opposition.

”This is still the largest general appropriation we have ever had, 150 million in general funds, 200 million dollars in total,” explained Karr. “I want to make sure that those dollars get used in the way that was the intent of the legislature, to actually do some good.”

The hang up comes on the heels of the departure of Lorraine Polak, former head of the South Dakota Housing Authority. Housing Authority officials said Thursday that the staffing change had not impacted their timeline.