Board approves price increases for inmate-built affordable housing program
A home produced by the South Dakota Governor's House program. (Courtesy of South Dakota Housing Development Authority)
The price of homes built by South Dakota inmates and sold to income-eligible residents across the state will increase again this year.
The South Dakota Housing Development Authority Board voted unanimously Tuesday in Pierre to increase the prices for Governor's Houses, which are constructed at Mike Durfee State Prison in Springfield and shipped across the state to eligible buyers.
There are two- and three-bedroom homes, as well as multi-family 'DakotaPlex' options for towns with 5,000 people or fewer, and day care models.
Homebuyers can purchase a Governor's House if they have an income of $71,540 or less for a one- or two-person household, or $81,760 for households of three or more. Developers can buy and place the homes, as well, if they're later sold to people who fall within the income guidelines.
Buyers are responsible for finding a lot, getting a building permit, buying appliances, laying flooring and hooking up utilities.
Prices have crept up since 2020, when a buyer could get a two-bedroom Governor's House for $50,200. Most of this year's increases align with the program's income limit increase, said Mike Harsma, who heads the Governor's House program for South Dakota Housing. The income limits were raised by just over 10%.
On July 1, the start of the 2025 fiscal year, the homes will be priced as follows:
Two bedroom: $86,000, up from $75,900, or a 13.3% increase.
Three bedroom: $96,000, up from $89,900, or a 6.8% increase.
Dakotaplex two bedroom: $97,000, up from $89,900, or a 7.9% increase.
Dakotaplex three bedroom: $106,000, up from $99,900, or a 6.1% increase.
Day care: $96,000, up from $89,900, or a 6.8% increase.
The increasing cost of materials continues to contribute to home prices, Harsma added.
Harsma told the board that the authority is on track to sell about 120 units this fiscal year, selling 91 through the end of April – most of which were three-bedroom units. The authority typically sells less than five two-bedroom units a year, said Executive Director Chas Olson.
A 'handful' of the program's 58 building pads in Springfield can only accommodate two-bedroom homes, which is part of the reason the authority continues to build and sell homes despite their low interest. Most of the two-bedroom sales are sold as elderly housing, Olson said.
'So we want to still kind of have that option open, but we've certainly talked at length about the possibility of cutting that two-bedroom unit,' Olson said.
Harsma also hopes to see an improved lead time. Between 2022 and 2024, it took three years to complete and deliver an order. Harsma told board members the program lowered its lead time to 18 months this winter and 'we're hoping to lower it again as we get further into the summer.'
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