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RAPID CITY, S.D. – After decades of building one home at a time for families in need of affordable housing, South Dakota's two largest Habitat for Humanity affiliates have embarked on efforts to develop multiple houses in a single project.

In a project nearing full completion, Habitat for Humanity of Greater Sioux Falls constructed 13 sideby- side twin homes that will serve 26 families on a cul-de-sac in northeast Sioux Falls.

On the other side of the state, the Black Hills Area Habitat for Humanity has purchased land and is starting development of 40 housing units in southeastern Rapid City that will be the largest housing project ever undertaken by a Habitat affiliate in South Dakota.

The efforts are more expensive and far more complicated than the typical home built by the nonprofit founded in 1976 to provide homeownership opportunities to families who help build and finance the homes they live in. Habitat now has a presence in 50 countries worldwide, including nine affiliates in South Dakota.

The move to take bigger swings at subdivision and multi-family housing developments is being driven by a challenging housing market in South Dakota, where affordable housing is hard to find. Rapidly rising construction costs and home prices have prevented many working-class families from achieving the dream of home ownership.

“We all know that the demand for starter homes is tremendous but also that those affordable homes are no longer available,” said Mike Keegan, resources development manager for Habitat of the Black Hills. “For recent graduates and young people branching out on their own, there’s nothing to be found at a price point that is reasonable.”

By obtaining grants and donations, Habitat is able to keep the homes at a price considered “affordable,” which in the current South Dakota real estate market is roughly $350,000 or less for a 3-bedroom, 2-bath home. Habitat hopes to get the price per unit in East Creek Village down to $300,000 or even $250,000 per unit if possible, Keegan said.

The South Dakota Housing Authority provided Black Hills Habitat with a $730,000 Housing Infrastructure Financing GrantinDecemberto help pay for land development on the East Creek Village project, said Chas Olson, executive director of the nonprofit authority, known also as South Dakota Housing.

“What stood out to me and what is unique and special about the project is that it is a departure from what the typical Habitat affiliate is doing,” Olson said. “Usually, it’s one or two homes at a time and not to the scale they have with this project, and they’re really trying to keep the price point down to an affordable level.”

The project and its unique funding mechanism have caught the attention of the national chapters of Habitat for Humanity, Keegan said.

Partnerships were critical to completing Millard Acres, the Habitat of Sioux Falls project with 13 twin homes built on North Americus Circle, a cul-de-sac off East 34th Street West, a few blocks east of Cliff Avenue, said Rocky Welker, executive director of Sioux Falls Habitat..

Habitat received funding from South Dakota Housing and obtained a zero-interest loan for the land from the city of Sioux Falls, Welker said.

In South Dakota, land is so expensive and construction costs have risen so much that new homes must be sold at prices far beyond the affordable level in order for developers to make a profit.

In Sioux Falls, meanwhile, most new subdivisions contain restrictive covenants that require homes to be of a certain size and with required amenities that push Habitat out of the market to build homes that working families can afford, he said.

Bringing a single home project to completion, let alone a project with multiple housing units, will require more time and creativity to find available, affordable land and the increased funding to get a project off the ground, Welker said.

Despite the challenges, Keegan hopes the success of the larger Habitat projects will spur development activities in other South Dakota cities with Habitat affiliates, including Aberdeen, Brookings, Fort Thompson, Huron, Mitchell, Yankton and Watertown.

'This is a project that we believe is scalable to any community size, including for the other affiliates in smaller cities across South Dakota,' he said.

South Dakota News Watch is an independent, nonprof it organization. Read more stories, donate and subscribe to stories at sdnewswatch.org. Contact content director Bart Pfankuch at bart. pfankuch@sdnewswatch. org.