Housing ID’d as No.1 issue in Lead and Deadwood

Land in Lead and Deadwood for housing apartment projects, similar in scope to this one, located at the top of Deadwood Stage Run, is hard to come by, with land currently being cleared for a 38-unit affordable housing apartment complex at the bottom end of the development. Pioneer photo by Jaci Conrad Pearson

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DEADWOOD — It tops the list of six points of impact presented to the Lawrence County Commission by Deadwood Lead Economic Development Corporation (DLEDC) Executive Director Kevin Wagner and the lack of it continues to challenge Northern Hills communities. 

“Housing being number one. That’s our most important,” Wagner said. “Your average community in the state of South Dakota is going to be anywhere between 50 and 60% of the workforce working in that community does not live in that community … Deadwood is actually the number one city in the state over 500 people for residents who work in this community, but do not live in the community.”

Housing, specifically, affordable housing, in two towns that either currently or are poised to employ hundreds if not thousands of workers continues to evade most employers and their new hires. And the economic development corporation is doing what it can to help impact the housing issue in Deadwood and Lead.

A 2016 Community Housing Study conducted by Community Research Partners showed that 3,000 per day were commuting into the communities of Deadwood and Lead to work but did not live here.

“So they’re living all over in the region and even in Wyoming,” Wagner said.

Further, the study showed that there were 2,498 people who were employed within the city of Deadwood in 2013 and only 4.6% also lived in Deadwood. 

“The remaining 95.4% of employees lived outside the community and commuted in for their job,” Wagner said. “Looking at the Deadwood map, there were 462 residents that were employed. Most of these city residents did work outside the community, as approximately 75% traveled to other locations.”

The same study showed there were 650 people employed within the city of Lead in 2013 and only 24.8% of these city-based employees also lived in Lead. 

“The remaining 75.2% of employees lived outside the city and commuted in for their job,” Wagner said. “Overall, there were 1,201 Lead residents who were employed. Most of these city residents worked outside the community, as nearly 87% traveled to other locations.”

The corporation has identified property for expansion into housing. 

“Over 650 acres identified for housing expansion. The vast majority of that is in city limits,” Wagner said. 

Two sites are east of downtown Deadwood, phase two of Deadwood Stage Run is a site, as well as everything on the west side of the Open Cut.

“Something called ‘Rock Crusher,’” Wagner said. “That’s about a 65-, 70-acre parcel. We’ve identified with Homestake. We’re working with them. They’ve been very receptive working with us on housing efforts with property they own either within Deadwood city limits or adjacent to that.”

Wagner provided a land overview of proposed properties in the Lead-Deadwood area to build affordable homes, townhomes, and rental units.

One parcel, referred to as Buena Vista, just east of downtown Deadwood and south of Highway 14A could include 105 single-family homes, 30 town homes, and 144 apartment units.

Deadwood Stage Run phase two, located near Mt. Roosevelt, could include 75 single-family lots, 25 town homes, and 30 apartment units.

A parcel referred to as Mattson Lane could house 80 single-family homes, 20 town homes, and 20 apartment units.

And the aforementioned Homestake Addition could house 30 single-family lots, 10 town homes, and 40 apartment units.

Citing barriers to development, Wagner said the cost of land and infrastructure, $7,500-$12,000 per acre and $1 million per mile, respectively, drive up development costs.

Citing recently gathered local infrastructure costs for a project proposal using Ainsworth-Benning, Wagner said 4,800 linear feet of 8-inch water main would cost $312,000; 1,000 linear feet of 8-inch sewer main eight- to 12-feet deep, would cost $55,000; base course and five-inch asphalt paving would cost around $165,625.

“So just running the basic 5-inch asphalt road a mile, sewer and water main, we’re already over a million dollars for that mile,” Wagner said.

Wagner shared housing milestones reached by the corporation during the last year.

“We have 38 new market rate units that will be going in starting in the spring in Deadwood. One new construction home, with five that have been signed on as spec homes for 2020,” Wagner said. “We’re working on one medium to large-sized-scale housing project. It’s in the works now and I’m hoping that we’ll be able to make an announcement before Christmas. Hopefully that land will be acquired by then. And then, we’re working on one large-scale multi-family project right now and hopefully, again, that land will be purchased before the first of the year for 2020.”

In Lead, economic development was instrumental in helping develop 18 new market-rate units that are currently in the process of renovation – the revamp of the old Lead Elementary School, one new construction home, and one medium-scale housing project that is in the works.

“We’re actually partnering with Homestake, possibly, on some property that is one medium-size multi-family project,” Wagner said.

A program that it has been sharing with local contractors is the South Dakota Housing Development Authority’s HELP loan program. 

“That’s their housing improvement loan program,” Wagner said. “Essentially what it is, is a 0% for six month loan program to do spec homes and what you have to do is stay within South Dakota Housing’s definition of a first-time home buyer loan amount which is $275,400, so that’s the maximum amount you get the loan for. … That’s once it’s completed and passes final inspection from state inspectors and the local city building inspector. That’s when the loan is considered closed, even if you don’t sell the home. However, current interest rates are about 3.5 to 4%, so what happens is if you exceed that six-month building time period, essentially, your interest rate goes to 2%, or half of the current interest amount for mortgages.”

Wagner is hopeful a contractor will utilize the loan in the spring for one of the five spec homes he mentioned.

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