Housing costs rise faster than wages can keep up
RAPID CITY, S.D. (KOTA) - There’s no argument , Rapid City has a critical housing shortage. Especially for thousands of people who struggle in getting into an affordable home.
While wages have increased somewhat since the early 2000s, home costs are rising far quicker than most paychecks.
“It really is tough to make a home mortgage payment in today’s world if you earn less than 30-thousand dollars a year all in,” says Scott Engmann, Executive Director of Black Hills Habitat for Humanity.
Rapid City’s average annual income is just under 26-thousand, and Engmann says, “Unless you’re making a lot more, you’re so far away from where housing is right now.”
A home costs a little over 300-thousand dollars on average, which he projects is 100-thousand dollars more than what someone could afford. That’s where they step in.
“We sell the homes at a level that’s affordable for the partner family we’re trying to serve,” says Engmann. “So, these are folks that need a home are probably living in a really rough situation.”
He says there continues to be more people who find themselves in that very situation.
“I think the community has become more aware of the housing challenge that we have.”
Wages have nearly doubled over the last 20 years, but he says that doesn’t matter because, “Even though those wages are going up, the cost of housing is going up even faster.”
He says 15 years ago when he started, it would cost 90 to 100-thousand dollars for a three bed, one bath new home and, “That same home now is costing 200 to 225 [thousand]. The unaffordability has just ratcheted up, with the wages coming up.”
For a single person, he says it’s a near-impossible feat, because “Without a dual income, there’s really no way to touch home ownership right now.”
So, what does Habitat for Humanity do? They renovate old and no longer livable homes, and are sometime even donated them, “But, it’s very much a catch as catch can strategy. So, we can’t really control our productivity that way, we’re kind of waiting for those opportunities.”
What they can do, is build, “Which,” he says, “becomes very very expensive in today’s world.”
While normally they build single family homes, demand and associated costs have changed. They’re building 50 townhomes on three and a half acre plot, “Which,” he says, “will allow us to increase the density and build a lot more within a small space.”
He says even though he knows that a lot of the people they work with dream of their own home, it’s necessary to help as many as they can, “Because it’s so much more efficient and that will help us bring out costs down.”
And also, since there’s such a lack of affordable housing right now, he says it does one more critical thing, “It increases the speed to market.”
That way, when homes are built, they can quickly move people into a living situation that suits their budget.
Then, most importantly, keep them there.
“If a family can stay in their home,” says Engmann, “it’s a much more affordable, sustainable way for us to continue helping with addressing the housing challenge in our community.”
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