SIOUX FALLS, S.D. (KELO) – In Jeremy Jensen’s eyes, shovels should have already been put into the ground.
Jensen, owner of Jensen Design Build, does house construction, neighborhood development and real estate investing in many South Dakota communities from his base office in Mitchell. He told KELOLAND News a housing development he owns in Mitchell is looking to use some of the $200 million for housing infrastructure from Senate Bill 41.
“We’re kind of sitting, just waiting to see what’s gonna happen here,” Jensen said. “We’ve known the program’s going to be coming through. In order to keep things affordable, yeah, we’re kind of waiting on that funding.”
The waiting continues for developers like Jensen, after Chas Olson, interim director for the South Dakota Housing Development Authority, told the Legislature’s Executive Board last week that September might be the first time the state housing board will be able to consider applications.
This week, Gov. Kristi Noem has publicly blamed state lawmakers for slowing the rollout of the $200 million and lawmakers have blamed Noem.
“Those legislators wrote the bill that said it was going to Housing, which now we’re tied up in the bureaucracy of Housing,” Noem said in a South Dakota Public Broadcasting story. “Remember, this was the first time they gave an unprecedented amount of state dollars to a housing authority that’s governed by the federal government, not the state.”
Republican Sen. Lee Schoenbeck, the Senate president pro tem, tweeted his displeasure with Noem’s comments.
“Gov Noem reviews and signs into law a bill that she says is screwed up, but she accepts no responsibility. Then she delays houses for a year in 2022 by TWICE threatening to SUE her housing authority! Still she takes no responsibility. Who’s the boss where the buck stops?” Schoenbeck tweeted Tuesday afternoon.
In the middle of the two-year spat between the executive branch and the legislative branch regarding the $200 million, two cabinet-level leaders have resigned. Lorraine Polak resigned from her postion as the executive director of the SDHDA at the end of March and Steve Westra, the commissioner of the South Dakota Governor’s Office of Economic Development, will leave his role effective May 22.
Polak and Westra were both involved with the disagreements regarding the $200 million. The SDHDA had to submit its proposed rules for infrastructure funding for Westra’s sign-off before setting a hearing on them. That hearing is yet to be held.
Republican Rep. Mike Stevens, a member of the Legislature’s Executive Board, told a Yankton radio station placing blame isn’t helping get the money moving faster.
“Bureaucracy kind of takes over and it’s down to a snail’s pace,” Stevens said. “That’s not the way to do business.”
Other lawmakers also express frustration about the delay, including Republican Rep. Chris Karr, who said the Joint Committee on Appropriations plans to call in the housing director and economic development commissioner at its May 5 meeting.
As KELOLAND’s Bob Mercer reported the $200 million was first approved during the 2022 legislative session, but Noem wasn’t comfortable spending it, because she said the money couldn’t properly be deployed. Legislators came back in the 2023 session and made it the first bill they passed. The governor signed it into law on February 1. Her announcement said, “Due to the bill’s emergency clause, this funding is available immediately, which allows it to be sent out prior to this year’s construction season.”
The delay appears to be in the rule-making process regarding the money. Dixie Hieb, the housing board’s attorney, said this is first time in her 30 years the agency has needed to put a lending or grant program through the state’s formal rule-making process.
Jensen said he can understand making sure the money is being used properly.
“I know there’s a lot of different entities involved,” Jensen said. “The greater good to make sure the funding is getting utilized correctly.”
Money to help offset higher housing costs
Jensen said he’s been waiting on the housing infrastructure money since February 2022. He said higher costs for lots of land and getting the key utilities in place can hinder housing developments. He said people selling land, which he included himself, are just looking to break even.
“We’ve seen the cost as high as $56,000 per lot, just for the build out,” Jensen said. “That doesn’t include the cost of the land or anything. There’s no $30,000 lots anymore, and you guys probably see that in Sioux Falls.”
Along with his development in Mitchell, Jensen is helping build housing in Gregory, Chamberlain, Corsica, Parkston and other smaller towns. In Chamberlain, Jensen’s company was picked to help build a home on free housing lots offered by the Lake Francis Case Development Corporation.
Jensen is just one example of a housing developer waiting along with lawmakers and government officials on the money. Jensen said he believes he was drawn No. 39 of 100 different entities approved to receive some of the housing grant money.
Sioux Falls city council member Curt Soehl said during this week’s informational meeting people in the construction industry have “lamented the fact that some projects are being held up.”