Black Hills groups announce $30 million in federal funding for affordable housing

U.S. Sen. Mike Rounds, R-South Dakota, speaks Aug. 12, 2024, at the David Lust Accelerator Building in Rapid City about federal housing funds awarded to the Black Hills area. (Seth Tupper/South Dakota Searchlight)

RAPID CITY — A $30 million funding award from the federal government will help Black Hills leaders create local trust funds to support affordable housing, officials announced Monday.

Chris Huber is the CEO of the Black Hills Area Community Foundation . He said Rapid City leaders had to scramble to manage growth during the post-World War II boom years, when the city’s population tripled between 1940 and 1960.

Now the area is experiencing growth as Ellsworth Air Force Base prepares for B-21 bomber planes, which are in development and expected to arrive sometime this decade. That activity and an influx of other new residents attracted to the region since the pandemic are stressing local housing markets.

“Together, we learned from the past and decided to be proactive partners focused on addressing the housing issues facing the Black Hills Region,” Huber said.

The South Dakota Ellsworth Development Authority will route the federal funding to the Black Hills Area Community Foundation, which will hold the money and work with local communities to establish their own housing trust fund advisory boards.

Board members will vet applications for low-interest loans to assist with affordable housing projects. The trust funds will operate on a revolving basis, making new loans with money paid back by loan recipients.

The Black Hills Area Community Foundation has already used the trust fund model to support the creation of 550 affordable housing units in Rapid City. The federal money will enable the establishment of additional trust funds for the Ellsworth area, along with Belle Fourche, Deadwood-Lead, Spearfish, Sturgis, Hill City, Hot Springs and Custer.

Projects will provide housing at below-market rates. In Rapid City, the goal is to create housing that’s affordable for people with incomes in the $20,000 to $50,000 annual range.

“It’ll be very similar in the rest of those communities,” Huber said, “but it’ll be dependent on what the advisory board decides is their most pressing need.”

The federal money comes from an “earmark” — the term for money that members of Congress direct to projects in their own districts.

South Dakota Republican Senators Mike Rounds and John Thune requested the funding’s inclusion in a 1,050-page, $468 billion congressional spending package that passed in March . The package included approximately 6,600 earmarks totaling $12.66 billion.

Past abuses led Congress to ban earmarks for roughly a decade until 2021. Rounds, who attended Monday’s announcement in Rapid City, said he uses earmarks to fund projects recommended by local communities and endorsed by the state, such as roads, bridges, sewer systems, housing and other economic development and quality-of-life projects.

“Some folks say they would prefer not to tell the executive branch where to spend the money,” Rounds said. “I’ve always taken the position that people from South Dakota should have more of a say in terms of where the money in South Dakota is going to be spent.”

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