Sioux Falls Council advances TIF agreement for affordable housing development

Trevor J. Mitchell, Sioux Falls Argus Leader
·2 min read

The Sioux Falls City Council advanced an ordinance Tuesday night approving a TIF agreement that will aid in the construction of an affordable housing development in eastern Sioux Falls.

A rendering of East Ridge district, a proposed neighborhood that would be built with the aid of a $2.14 million TIF.
A rendering of East Ridge district, a proposed neighborhood that would be built with the aid of a $2.14 million TIF.

The $2.14 million TIF will need to pass a second vote next week to be instituted. It's intended to close the gap between what Nielson Construction would normally sell the homes for, and the price they'll actually be set at.

Each of the 65 homes must be priced at or below $340,000, the South Dakota Housing Development Authority's first-time homebuyer price.

More: Sioux Falls officials hope affordable housing TIF can be a model for development

Brent Adney, the SDHDA's homeownership director, said that figure is derived through a calculation that involves data from the U.S. Department of Housing and Urban Development and is usually updated once a year. The $340,000 figure was rolled out on April 29, an increase from $300,000.

Councilor Pat Starr asked several questions about infrastructure near the homes, including what the nearest parks were, saying there needed to be more focus on things like transportation as housing spreads throughout the city.

He also asked about specific income levels expected to be purchasing the homes, information that Business Development Coordinator Dustin Powers said he'd try to bring next week.

"I'm trying to figure out who we're trying to help," Starr said.

The development, located on a 9.7 acre plot of land near East Madison Street and Veterans Parkway, will include two-bedroom, one-bathroom houses with a price goal of $232,000 or below, and two-bedroom, two-bathroom units in a twin home with an unfinished basement with a price goal of $323,000 or below.

State law limits how TIF funds may be used, so while the houses themselves can't be built with the money, things like utilities, roads and infrastructure are fair game.

When a TIF is established, the base assessed value of the district or area is established, and those property taxes continue to be directed to the city, county and local school districts. Property taxes from the increased valuation instead go to the developers and are used to pay down any improvements made within that TIF boundary.

This article originally appeared on Sioux Falls Argus Leader: Sioux Falls advances $2.4 million TIF agreement for housing development