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Black Hills Faces Serious Housing Shortage As Region Grows

Panelists speak at Elevate Rapid City's housing event.

More and more people are moving to the Black Hills and the region is already short on housing, especially affordable units.  

Community and housing leaders discussed the issue during an Elevate Rapid City event last week. They said this problem is bad news for residents and hinders economic growth.  

Between 30,000 and 40,000 people are expected to move to the Black Hills in the next 10 years, according to Elevate CEO Tom Johnson.  

Even without the newcomers, Rapid City alone already needs nearly 5,000 affordable units, according to the Rapid City Strategic Housing Initiative and Trust Fund.  

The city needs 3,500 housing units costing no more than $900 a month, and 1,459 rental units costing no more than $500 a month.  

Several panelists at the Elevate event said they know people who had to turn down job offers because they couldn’t afford to move to the Black Hills. They also said some businesses have decided not to open or expand in the area due to the housing crisis.  

Panelists and guests said the most difficult area to tackle is housing for people who make $20,000 to $50,000 a year.   

“Workforce housing is really what you’re talking about,” said Mike Diedrich, a state representative from Rapid City who is part of a summer legislative study on housing.  
“People who do have employment who probably make more than they can to qualify for the low-income subsidized housing but not enough money to get into market-level housing,”  

That market-level housing starts at $1,500 a month in the Rapid City area, according to David Lust, a consultant for the housing initiative and trust fund.  

A major obstacle to affordable housing is the cost of preparing land for development, the panelists said. One solution is providing low-interest loans to builders as well as residents.  

Another solution is for local governments and community groups to partner with developers to build affordable housing.  

Lust’s group is putting that idea into action by partnering with CommonBond Communities – a Minnesota-based nonprofit – to build a mixed-income, 44-unit apartment building near downtown Rapid City.  

Affordable housing means spending no more than 30% of your monthly income on housing. But many people, especially low-income people, spend much more than that.  

Eighty-three percent of households earning less than $20,000 a year have unaffordable housing while 57% spend more than half their income on housing, the study found.  

When you spend that much on housing, you’re just “a broken transition or broken arm away from being homeless,” Lust said.  

A full quarter of households earning between $35,000 but less than $50,000 also have unaffordable housing but only 3% spend more than half their income to keep a roof over their head.  

Other housing data can be found in the 2018 study conducted by Benchmark Data Labs.