Workforce housing sees win in Senate amid debate about government overreach and infrastructure
The South Dakota State Senate approved a bill Friday that would create a loan and grant program for workforce housing construction in the state.
Senate Bill 41 passed with 29 senators in agreement, two against and four excused.
The bill says the South Dakota Housing Development Authority will be in charge of administering loans in the sum of $100 million, and grants in the sum of $50 million for the construction of housing infrastructure.
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State funding will be used for the $150 million and federal funding will provide an additional $50 million to be used for grants.
"I think we'd all agree that South Dakota is a great place to do business. But that success has created a huge challenge with workforce," Sen. Majority Leader Casey Crabtree said at the hearing. "Today, we have an opportunity to address this critical issue. In short, South Dakota businesses need more workers in our state to keep our economy strong for the future. In order to get more workers, we need more infrastructure for housing."
Sen. Tom Pischke, who stood in opposition of the bill, said he believes the bill a case of government overreach in the private enterprise sector.
But Sen. Reynold Nesiba responded by saying, "Sometimes markets fail or don't adjust fast enough," and that it's happening in Sioux Falls, for example.
How did we get here?
The Senate passed a similar bill last year, but didn't cross the finish line into law. There were concerns with the wording of it. The main concern was the it wasn't clear where the funds could be used and that the state might get sued for mismanagement.
Senate Bill 41 would create a sub fund called the South Dakota Housing Infrastructure Fund, which would be administered by the SDHDA, and Sen. Jack Kolbeck said this should solve the issue.
"Hopefully, [the bill gets] expedited and we can get some good things happening," he said.
Other senators are also hopeful it will get passed through.
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The bill defines housing infrastructure as "the installation, replacement, upgrade, or improvement of public infrastructure for the support of a single-family or multi-family housing project," which provides the flexibility to include easements, water and electricity.
The repayment of the principal loan balance, as well as any interest accrued, will be deposited directly back into the fund for making new loans.
The bill also states that 30% of the grant monies must go for infrastructure in cities with a population of 50,000 or more, and 70% must go to all other areas of the state. A grant or loan also may not be given for an amount great than 1/3 of the project's total cost.
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"The importance of this issue has only grown over the past year with heightened inflation and rising interest rates," Crabtree said. "This gives us an opportunity to provide a long lasting tool for our state to address the workforce shortage issues."
Senate Bill 41 will now go to the House next week to be voted upon before it goes to the governor for final approval.
This article originally appeared on Sioux Falls Argus Leader: Workforce housing bill passes in Senate, off to House next week
