The sometimes strained relationship between Republican Governor Kristi Noem and the GOP-led Legislature has partly delayed the implementation of a $200 million program to build essential housing for the Dakota workforce. from South.
In a series of emails sent to South Dakota News Watch, the Republican governor and a prominent GOP senator each blamed themselves for failing to launch the program on time.
The loans and grants program that was supposed to start disbursing funds for housing infrastructure in the summer of 2022 is on hold until at least the next legislative session in 2023 or possibly beyond.
In an email to News Watch, Governor Noem’s office blamed the GOP leadership in the state Senate for refusing to work with it on the spending authorization bill, for changing its plan and instead concocted a “plan” that put the program’s objectives in jeopardy.
“We are disappointed but not surprised” that the program has stalled, the governor’s email said. “Rather than working with Governor Noem on this plan, Senate leaders preferred to draft their own plan. Many lawmakers assured the governor that this plan would work, and she took them at their word and signed their bill into law. Unfortunately, we have now seen that this scheme did not work as announced by Senate leaders, and the $200 million is dormant.
News Watch shared the governor’s statements with Senator Lee Schoenbeck, R-Watertown, who is president pro tempore in the Senate. In a subsequent email to News Watch, Schoenbeck blamed Noem for the stalled funding program.
“There is nothing wrong with the law,” Schoenbeck wrote. “To respond to the Governor’s complaints and so she will drop her two threats to prosecute [the South Dakota Housing Development Authority], we drafted a bill. Whether [the governor] dropped his threats, the money could come out now.
Schoenbeck declined to respond to a follow-up email asking for clarification on his statements about threats or complaints from the governor.
The governor’s office later denied that Noem used threats of any kind to derail the program.
“The Governor’s concerns about this legislation have been made clear and public in multiple letters to the Housing Authority and the Legislature,” Noem wrote in an email to News Watch from his spokesman Tony Mangan. “The Board is independent from the oversight of the Governor; therefore, Governor Noem has no legal authority over how the Council uses or does not use these dollars. The governor has made no threats and any allegation is false.
The feuds between Noem and Senate leaders over housing funds are not the first time the governor has fought with legislative leaders from her own political party.
Earlier this year, she battled with conservative Republicans in the House of Representatives over which branch of government — executive or legislative — should control the disbursement of hundreds of millions of federal dollars that the state received during the COVID-19 pandemic. During the session, some of Noem’s major legislative proposals on abortion, critical race theory, and COVID-19 vaccine exemptions were derailed by the GOP-led legislature. In 2021, Noem openly criticized the Legislative Assembly for not supporting changes to a bill regarding transgender players in youth sports. And Noem has publicly waged a war of words with Republican House Speaker Spencer Gosch, R-Glenham, who Noem says for some reason doesn’t like him.
“I’m screwed anyway no matter what I say,” the governor said at one point. She later added, “He’s looking for a reason to blame me for everything.”
Delaying delivery of the $200 million by a year or more is bad news for communities in dire need of workforce housing and for people trying to find housing in South Dakota. said Julie Johnson, an Aberdeen lawyer who lobbies the Legislative Assembly. on behalf of a number of mostly non-profit housing agencies. The program would use $150 million in state funds and $50 million in federal funds for loans and grants to developers who agree to build workforce housing in major cities and towns across the country. State.
“We missed a whole construction season, and that’s a big deal because you don’t do a lot of infrastructure development in the winter,” she said.
A recent state report noted that South Dakota needs about 10,000 more homes due to growth, and added that the lack of housing is preventing businesses from expanding in the state. None of the money from the program was allocated for building houses, only for infrastructure to speed up the construction of houses.
“Some of that money is going a long way in South Dakota to help various kinds of housing efforts right now,” Johnson said.
The labor housing problem exists statewide, but it’s most acute in the state’s largest city, Sioux Falls, according to Debra Owen, vice president of government relations for the House of business of Sioux Falls.
According to city data, Sioux Falls is home to 36% of the state’s workforce, saw approximately 23,000 new residents from 2015 to 2020, and has 43% of open jobs in the state. Meanwhile, city officials estimate that Sioux Falls will need 7,000 more homes to accommodate growth before 2025, at a time when affordable housing has fallen 15% overall.
“If you’re coming to Sioux Falls for the first time, you’re going to see homes being built everywhere, but a lot of those homes are being built for people who moved here two or more years ago,” Owen says. “We don’t have homes for people who are moving in now or next year, so the need is quite great here in terms of where can we find housing at a good price for these people to come and live in our city. .”
Basically, the concerns that caused the housing program to be delayed were who would disburse the funds and what type of housing the program would support.
The program was announced as a priority by Noem in his 2022 budget speech, and the bill providing the funding comes from his economic development office.
Initially, Noem wanted the Governor’s Office of Economic Development to review applications and award grants, but the state Senate changed the measure at the end of the 2022 session to allow the independent South Dakota Housing Development Authority to manage the program. According to Lorraine Polak, director of the housing authority.
Polak said the wording of the final bill was unclear as to whether the funds were supposed to be for housing low-income or moderate-income residents.
Throughout the legislative process, proponents of the program did not want to limit program funding only to low- and middle-income housing.
Funders have argued that workforce housing is not necessarily income-targeted housing and that the fund should not be limited to providing infrastructure to house only income-qualified residents. .
Due to confusion surrounding the intent of the legislation, the board voted this summer to delay implementation of the entire funding package until it receives further clarification on the intent of the legislature, Polak wrote. Polak said the housing authority was aware of Noem’s concerns but was never threatened with legal action in any way.
Polak said the authority had received multiple applications from developers seeking a portion of the $50 million in federal funds, but alerted those applicants that the program was on hold.
The Legislature and Governor need to band together and pass a workable measure in 2023 so developers can start using the money to get homes built in South Dakota, said Rep. Roger Chase, R-Huron, a supporter major of the housing program.
“I was hoping that we could get the funds to come out this year, and that’s why it’s important for us to start on that so we’re ready to go early in the session so we don’t lose the money. next year’s construction season.
This article was produced by South Dakota News Watch, a nonprofit journalism organization located online at SDNewsWatch.org.