The South Dakota Senate has approved a bill to distribute $200 million of state and federal funds for loans and grants for use by communities for infrastructure related to construction of workforce housing. The bill passed on a 29-2 vote Friday and heads to the House of Representatives and the governor.
A similar bill was passed last year, but its terms weren’t implemented. There was a fairly minor change in this year’s bill concerning the state agency that will administer the funds.
In any case, the bill is intended to stimulate construction of new housing for South Dakota communities that need it to attract workers for open and upcoming positions. Grants and loans require substantial participation of municipalities and developers. The money can be used for “the installation, replacement, upgrade or improvement of public infrastructure for the support of a single-family or multi-family housing project.”
The initiative proposes $600 million to be spent, essentially split into thirds among developers, municipalities and state government (which gets part of its portion from the federal government).
In addition to new construction, it allows substantial or moderate rehabilitation of rental or home ownership housing, housing preservation, grants to make homes houses more accessible to individuals with disabilities and homelessness prevention activities.
The local question is: Can Madison participate in this program?
It will be a challenge. Whatever developers come up with, the state will match, but the city must match as well. The City of Madison is in the process of making other large financial commitments, especially a new City Hall and police facility, estimated to exceed $10 million. And the city recently passed a long-term capital expenditure plan that includes tens of millions more for other projects such as electrical and water systems upgrades.
We’re not sure where developers stand at the moment in Madison. More than 150 housing units have been constructed, or are in progress of being constructed, in recent years. We do know of other developments on the drawing boards that may qualify, but we don’t know if they are ready to get started.
If the bill makes it through the legislative process and gains the governor’s signature, we’re curious as to how municipalities and developers will react. Will projects go forward, or will terms need to be revised next year? Since federal stimulus funds are used, how long can we wait?
— Jon M. Hunter
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