Argus Leader: A Pathway to Affordable Homeownership in South Dakota

Opinion by Marcia Erickson, CEO of GROW South Dakota

As South Dakotans, we take pride in our communities and the opportunities they offer. From our small towns, to rural areas, to our two metropolitan areas, each corner of our state has its own unique charm and potential. Yet, there is a pressing challenge that threatens our future growth: the lack of affordable, quality housing.

Fortunately, there is a solution currently before Congress: the bipartisan Neighborhood Homes Investment Act, which aims to help make affordable homeownership a reality for the communities and the families that need it most.

Today, communities across our state are dealing with a significant shortage of livable and affordable homes, including homes for purchase. This crisis not only slows growth in the community, but it also keeps families from building wealth through homeownership. According to recent data from the Federal Reserve Bank of St. Louis, the median price of a home in South Dakota went from approximately $240,000 in 2021 to $395,000 in 2025 – a 65% increase in just four years. This staggering increase in prices, combined with rising interest rates, has made homeownership increasingly out of reach for many South Dakotans.

The lack of affordable housing also impacts our economy. If there aren’t enough affordable homes to support a thriving workforce, businesses planning to expand or launch may look to other states rather than bring more jobs and economic opportunities to South Dakota. As the Neighborhood Homes Coalition says, homes are where jobs go to live.

At Grow South Dakota, we have developed or renovated homes over the past decade, and we are increasingly struggling with the issue of building modestly priced homes for first time homebuyers. With rising construction costs and home sale prices rapidly outpacing family incomes, we often see a gap between and separating the costs to build the home and making the home available to the typical South Dakota first time homebuyer.

The Neighborhood Home Investment Act would address this issue by offering a tax credit for building or renovating homes in areas where the construction costs are higher than what the property can sell for on the market.

What makes this bill especially promising is its flexibility. It can also be used to help lower income homeowners make critically needed repairs to their homes in instances where traditional financing is not available.

The legislation also allows local leaders in our state to place the priority on financing homes in areas that need it most–like South Dakota’s rural and Native communities, as well as areas with high poverty and historically low home values and those that may be recovering from natural disasters.

It is estimated that this legislation would spur the production and rehabilitation of 1,900 homes across our state over the next decade. This means both improved housing and more homeownership opportunities, including for those buying their first home. This would also lead to good-paying construction jobs, as well as draw new workers and businesses into our
communities.

There is a path forward to addressing the housing challenges in our state, and it is important that our elected officials prioritize it. Just this week, eight housing focused organizations headquartered in, and serving, South Dakota communities sent a letter to our Congressional delegation supporting the enactment of this common-sense solution to help address the housing affordability crisis. I hope my fellow South Dakotans will join me in urging Congress to support the bipartisan Neighborhood Homes Investment Act.

Together, we can open the door to homeownership for more people across our great state.