Price goes up for Governor’s House program, but less than recent years

A home produced by the South Dakota Governor's House program. (Courtesy of South Dakota Housing Development Authority)

The homes built by inmates and sold to income-eligible South Dakotans will cost more come Friday, but the price hike is lower than it has been for the last three years.

The South Dakota Housing Development Authority Board voted Tuesday 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 “DakotaPlex” options for more than one family in towns with 5,000 people or fewer, and day care models.

Data visualization made with Flourish

Homebuyers can get a Governor’s House if they have an income of $64,820 or less for a one- or two-person household, or $74,080 for households of three or more. Developers can buy and place the homes, as well, provided 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 significantly since 2020, when a buyer could get a two-bedroom Governor’s House for $50,200.

On July 1, the start of the 2025 fiscal year, the homes will be priced as follows:

• Two bedroom: $75,900, up from $71,400.
• Three bedroom: $89,900, up from $85,400.
• Dakotaplex two bedroom: $89,900, up from $85,900.
• Dakotaplex three bedroom: $99,900, up from $95,900.
• Day care: $89,900, up from $85,900.

From 2022 to 2023, the price hikes were about twice as high.

As in previous years, the increases are tied to higher build prices. The cost of building materials like wood and siding has been the culprit in recent years. A different pressure point emerged when bids for materials began to arrive at South Dakota Housing for the coming construction season.

“Most of the price increase was not so much based on commodity items, but more production items like furnaces and anything with an electric circuit board,” said Mike Harsma, who heads the Governor’s House program for South Dakota Housing.

Harsma told the board that the authority aims to build 120 homes in fiscal year 2025, a higher number than recent years. So far in fiscal year 2024, which began last July, the authority sold 42 Governor’s Houses, most of which were three-bedroom models. Forty-three were completed in that time frame, and 55 were delivered.

Housing board ‘in the final stretch’ of $200 million worth of infrastructure awards

Harsma told the board that the slight slowdown in sales over the past year was tied to longer lead times for materials. Since 2022, the wait time for a Governor’s House has been three years from order to delivery.

Production is ramping back up as the construction season gets underway, he said, in part because inmates have begun to get lunch at the building site. That’s cut out the time it’s typically taken to cart them from the site to the prison for meals.

“We’re looking at probably lowering lead times over the next few weeks,” Harsma said.

The board voted unanimously to pass the price increases, which take effect Friday.

The board also heard an update on the Housing Infrastructure Financing Program , created in 2023 by the Legislature with an infusion of $200 million in funding to help developers pay for things like lighting, water and sewer lines and streets.

Chas Olson, director of the housing authority, told the board that $113 million has been committed thus far and that several of the awarded projects are or will soon be building. Two other projects could be ready to apply for funds next month.

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