August 20, 2003
Statewide Housing Needs Analysis Released Today
The Statewide Housing Needs Analysis was unveiled today at the South Dakota Housing Development Authority's (SDHDA) monthly Board of Commissioners meeting. Presenting the findings to the Board was Mike Kearney of Mullin & Lonergan Associates, Inc., the Pennsylvania based firm that prepared the report.
The Analysis, which was commissioned by the South Dakota Housing Development Authority, compares 2000 Census Data to that of 1990 and reports needs based on that comparison and surveys of housing advocates, builders, developers, community officials and leaders statewide.
"I was extremely pleased," said John Rothstein, SDHDA Chairman of the Board, "that the study found that the overall condition of the state's housing stock is generally good and that the supply of housing has increased in response to demand. We would like to believe that SDHDA's efforts in providing a continuing source of low-rate First-time Homebuyer mortgage loans and the fact that we have provided Housing Tax Credits to rental housing developers, in support of more than 5,000 affordable rental units in the past 15 years, has contributed."
The Analysis cites the state's low unemployment rate and points out that South Dakota's 56.8% median household income growth, which led the nation, reflected a growth rate higher than increases in median rents. In other words, median household incomes which rose from $22,503 in 1990 to $35,282 in 2000, rose higher than median rents, making rental housing more affordable for most renters.
The news for homebuyers wasn't as rosy as median house sales values increased 76.9% since 1990 compared to the 56.8% median household income growth. "Low interest rates, however, have enabled South Dakota's homeownership rate of 68.2% to exceed the national rate of 66.2%," commented Rothstein.
The Analysis reflects a need for about 2,600 new homeownership units a year from 2003 through 2007. Housing units affordable to all income ranges are included in this projected demand, which is based on projected population growth and other factors. Although median household incomes have risen higher than median rents, 2000 Census data indicates that 29% of all South Dakota renter households were paying more than 30% of their income toward rent. The study projects a demand for approximately 800 rental units per year to address the needs of newly formed households with incomes below 80% of median family income. To address the affordability issue, the study lists rental assistance as one of the five priority housing needs.
Citing South Dakota as a 'business friendly state,' the report acknowledges the expansion in jobs and the growth in the number of households as the primary factors contributing to the demand for housing. New housing unit demand, both homeownership and rental is expected to be generated primarily in the growing urban areas and along the I-29 corridor as well as other areas experiencing household formation growth, primarily Black Hills communities.
South Dakota has experienced steady job and economic growth and has managed to avoid the boom-bust economic cycles of larger, more urban areas. The steady rate of growth appears to be sustainable, according to Mullin & Lonergan, which has recently performed similar studies for other state housing finance agencies.
The Analysis lists new construction of affordable rental housing in areas of need and challenges builders and developers to build for the echo boom generation in addition to addressing the needs of the aging baby boomers.
Not all of the news in the Analysis is positive notes SDHDA Executive Director Dar Baum. "Although the housing stock is generally good, Census data indicates more than one-third of the housing stock is over fifty years old placing it in a category of housing more likely to have deficiencies. The report places preservation of existing rental housing stock as another priority housing need."
With the continuing concerns about the homeless, particularly in urban areas, the report identifies another housing priority as the need for homeless housing with supportive services.
Two percent of South Dakota's owner housing units and 5.6% of the state's renter units indicate overcrowding conditions, generally defined as households having more than 1.1 persons per room. Forty-two of the 66 counties indicate an increased incidence of overcrowding.
Lack of plumbing was cited in 1.4% of South Dakota's housing units, equating to about 1,850 units. The report also cites an increase in vacant housing units since 1990, particularly in rural areas. Overall, South Dakotans are well housed. However, affordability and availability remain as issues.
Since the US Department of Housing and Urban Development requires that each Tribe produce its own Housing Plan, the Statewide Needs Analysis summarizes the needs data from the various Tribal Plans and analyzes the 2000 Census data from the areas on and around the various Indian reservations to assist in the development of their plans.
The report acknowledges the high prevalence of poverty and unemployment on the reservations and notes that population is increasing on the reservations at roughly three times the rate of the state's population. The report reflects a forecasted demand for more homeownership units on reservations rather than rental housing. Citing the lack of a private real estate market and the relative absence of economic opportunity on the reservations, the report notes high incidences of overcrowding and a general shortage of housing units necessary to keep up with the projected increase in population.
The Executive Summary and accompanying Housing Needs Analysis are available at the South Dakota Housing Development Authority's Website at www.sdhda.org. Printed copies of the full report are available at a cost of $25 and may be ordered by calling 1-800-540-4241.
The South Dakota Housing Development Authority (SDHDA) is an independent, quasi-public agency that finances and develops affordable housing opportunities for low and moderate-income residents throughout South Dakota. SDHDA is totally self-supporting and receives no tax money, appropriations or other funding from the State. SDHDA does not discriminate against any person because of race, creed, religion, sex, handicap, familial status or national origin.
