John Hult writes about the Rapid City Council’s waiver of its minimum lot size requirement for realtor Rod Poeppel, who wants to build 600–800-square-foot homes—the size Grandma and Grandpa used to build and find perfectly amenable to their needs, but now with solar panels!—to address the shortage of affordable housing in Pennington County. I wouldn’t think large lots would stand in the way of building a small house—a smaller house just means more room for vegetable and pollinator gardens, a chicken pen, a bicycle shed, and an art barn.
The bigger problem seems to be breaking down the mindset of homebuyers and bankers who expect bigger houses:
The “build bigger” mindset is common, according to Daniel Herriges of Strong Towns, an organization based in the Twin Cities that advocates for less rigidity in city planning and more incremental, flexible development.
Even as people like Poeppel sell smaller homes and line up customers for new ones, generations of city dwellers, city planners and financiers have grown accustomed to the notion that small won’t sell.
Even with encouragement from planning departments for innovative approaches, Herriges said, multimillion-dollar investments in neighborhoods with unproven potential don’t have built-in support from loan officers and investors.
“Nobody wants to be first,” said Herriges, who edits the Strong Towns newsletter and was a recent guest of an urban planning conference in Sioux Falls [John Hult, “Big Prices Drive Interest in Small Homes, But Lot-Size Rules Stand in the Way,” South Dakota Searchlight, 2023.10.27].
One way to bust up that mindset is to offer solar-powered small houses in Poeppel’s target price range of $150K to $180K, half of the state’s median house price of $350K.
Related Reading: Motley Fool reports that South Dakota’s median household income is 23% of typical home value. In other words, South Dakotans have to work for more than four years (and buy nothing else!) to afford a typical house. Housing is harder to afford to our west: the income/home value ratio is 21% in Wyoming and 15% in Montana. Housing is more affordable in our other neighboring states: the income/home value ratio in North Dakota is 27%; Minnesota; 24%; Iowa, 32%, and Nebraska, 27%.