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Noem Delays $200M Housing Investment with Unusual Bureaucracy

Governor Kristi Noem is still delaying the implementation of a $200M housing development program. Chas Olson, the man Noem tapped to replace retired/fired Housing Development Authority chief Lorraine Polak, told the Legislature’s Executive Board yesterday that we still can’t spend the money:

The $200 million that South Dakota lawmakers have wanted to spend on affordable housing infrastructure since a year ago probably won’t start reaching projects until this fall, at the earliest.

That was the word Thursday from Chas Olson, interim director for the South Dakota Housing Development Authority.

Olson told the Legislature’s Executive Board that September might be the first time the state housing board will be able to consider applications.

According to Dixie Hieb of Sioux Falls, this is the first time in her 30 years as the housing board’s attorney that the agency has needed to put a lending or grant program through the state’s formal rule-making process [Bob Mercer, “Rule-Making Slows Housing Money’s Availability,” KELO-TV, 2023.04.20].

You’d think the Governor would be eager to pour $150 million in state money and another $50 million in federal coronavirus relief dollars into the hands of crony developers. But Noem apparently is prioritizing her feud with the Legislature over spending authority over immediate economic boost and affordable housing, causing another construction season to go by without putting that money to good use:

[Republican Senator Jim] Bolin said that “a substantial portion” of the 2023 construction will be missed as a result of the pace that the agency is taking through the rule-making process. “The calendar just moves forward. I think a lot of people anticipated that some of this money might be available by Memorial Day. Now, I think we’re hearing that some of it may be available by Labor Day. So perhaps some building construction will begin in the fall, but I think it was the hope of the Legislature that this could be moved forward as rapidly as possible, so that housing could be built in the construction season of 2023.”`

Republican Representative Chris Karr sounded disappointed as well. “When this legislation came through, there was a lot of conversation how fast we could get this through,” he said. “Remember, this was a bill that was right in the beginning of session, it had an emergency clause on it so the governor could sign it right away, and there was this big push to get it out, so that it could get out to the construction season this year, start putting up some affordable housing this year — that’s what we were told.

…“I think we’ve definitely missed the construction season,” he added, listing the steps yet to be done before the housing board can start making funding decisions. “I think we’re looking at September, October. I think most of the construction season, these guys (builders) have planned, they know their projects, they know where they’re going to go and start building the rest of this year, I would say October at the very least, so I don’t think these dollars will become meaningful until the next construction season” [Mercer, 2023.04.20].

There are many reasons workers may struggle to find good affordable housing in South Dakota. Kristi Noem is one of them.

14 Comments

  1. John 2023-04-21

    Noem’s intransigence is an apparent fiscal crime. It’s no longer a $200 million dollar program. Noem allowed an estimated 15% of that to evaporate due to housing construction inflation over the past 2 years. It’s estimated that now the program will only buy $170 million in housing using 2021 economics. (The United States Bureau of Labor Statistics, the Producer Price Index (PPI) for new residential construction in the Midwest region, which includes South Dakota, increased by 9.5% from March 2020 to March 2021. More recent inflation values are still being calculated.)
    So Noem let housing funds evaporate with inflation, and she missed construction seasons.

  2. P. Aitch 2023-04-21

    Builders can be innovative especially when delays arise. Think “bridge loans”.

  3. Edwin Arndt 2023-04-21

    Construction costs are a moving target. I have heard on fairly good
    authority that the cost of lumber has dropped significantly. Of course
    interest costs have gone up, so it takes a sharp pencil.

  4. Mark Anderson 2023-04-21

    Come on Kristi’s got sooo much on her plate. I just read her article on the wonderful new social studies standards for instance. She got shopping, plane tickets, speeches to fellow magas and her hair. Just getting those three bold curves to fall just over her breasts, stunning. She signs bills into law while giving a speech, wow. Just think of those shooting lessons with her two year granddaughter, priceless. Just look at Wayne LaPierre’s face while he’s on stage with her. That face says it all.

  5. leslie 2023-04-21

    likely if those are vested funds she is earning interest. she obviously has a finance office with a bevy of financial professional staffers. it would be fun to get some whistleblowers

  6. Arlo Blundt 2023-04-21

    There are cities and towns all over South Dakota with “shovel ready” affordable housing projects and proposals to the Housing Development Authority which have been ready to submit for almost two years. These municipalities have done their work, including putting in streets and utilities.They have focused on “work force housing” and this may be the rub. The Governor is no fan of single family housing. She likes grand housing enclaves, gated streets, the proverbial McMansion. She wants the impetus for work force housing to fade away so she can shovel some cash to her favorite developers. The entire program, and the 200 million, will, by sleight of hand, slowly disappear.

  7. grudznick 2023-04-21

    It would be neato, Mr. Blundt, if they could figure out a better way to spend all that money. Heck, feed the homeless breakfast every day for the rest of the millenia. Buy every person who shows up claiming to be homeless a nice canvas puptent, and put them through a class on how to fish and start a campfire. For the Devil’s sake, don’t be buying free lunches for people who can afford to buy their own damn kids a lunch, and don’t be building houses for free either.

  8. grudznick 2023-04-21

    In Mr. H’s blogging, where he points out that Ms. Governor Noem outsmarted Mr. Schoenbeck, it makes one wonder why this blog and others did not catch the tricky puzzle that was laid into the law bill to make the legislatures stumble.

    I am sure Mr. Rhoden was not part of it, probably, but…Rhoden laughing. Rhoden laughing. Perhaps next time the legislatures will let the Economic Executive fellows write the law bills the right way.

    Can you imagine if the legislatures screw the pooch for a 3rd time in a row? Best enlist some fellows who actually want to spend this money for the free stuff.

  9. Mark Anderson 2023-04-21

    Grudz reveals himself here. He’s naked and it’s not pretty. It’s butt ugly and sooo stupidly thought out. He’s a real Republican with all the biases that they have. At least it’s an older Repub bias. Woke doesn’t enter into it.

  10. Arlo Blundt 2023-04-21

    Grudznick–you’re babbling on like a landlord. Have pity on the young married couple with two kids living in a 1,000 bucks a month apartment who could be building equity through home ownership.

  11. grudznick 2023-04-22

    If the Council of Research for the Legislatures can’t get a law bill done right for two years in a row, mayhap that law bill isn’t really needed.

  12. Lui 2023-04-25

    My way or the highway. What a brat. So all of the people waiting for a house can just suck it up. I am hoping, sooner than later, people in SD will have seen through her enough to vote her out. People who are hurt by her, will vote her out.

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