Home builders are choosing to build outside of Rapid City to save money

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RAPID CITY, S.D. (KEVN-TV) Tuesday night's Rapid City budget hearing saw city council nix a proposal by the mayor to increase building permit fees -- as a way to cover the city's $203,000 budget deficit.

And while the Black Hills Home Builders Association is calling it a win for affordable housing in town, there are still some issues causing Rapid City to be what some feel is a less-than-friendly place to build.

A home is one of the biggest investments a person can make -- but some homebuilders are saying building in Rapid City isn't as affordable as the surrounding communities.

"Black Hills Homebuilders Association has always believed in housing affordability for everyone and when you continue to raise our fees and raise our prices, we have no choice but to pass that on to the consumer," says Hedrick.

Dean Hedrick is the President of the Black Hills Homebuilders association and also works with Hult Homes and he says many of the Rapid City regulations tack thousands on to the price of a home.

"We have High back curbs so every time I have to cut a curb and put a driveway approach in a new house it costs me right around $4,000. Rapid City requires us to do copper lines with anote bags. Rapid Valley allows us to do the PVC. Rapid City by asking and insisting on the copper, ads $1,200 to the cost of every house, " says Hedrick.

Now a thousand dollar regulation here or there may not seem like a lot but when the dust settles it's the consumer that has to pay.

Hendrick says for every $1000 price increase in a home the number of people that can afford a home significantly decreases.

"For every thousand dollars a home goes up nationwide over 150,000 people can no longer afford a home ... That's a big deal," says Hedrick.

So homeowners and builders are looking to communities outside of Rapid City to get the best bang for their buck.

"I can take a house that I build in Rapid City take it Box Elder or Summerset and it will cost me on average between 15 and $30,000 less to build that exact same house," says Hedrick.

And plenty of folks are taking advantage of the savings to the tune of Rapid City losing on significant property tax gains.

"In the last five years alone in Summerset and Box Elder, there has been over $50,000,000 of new residential construction that has gone to those cities because it is easier to build and it is less expensive to build," says Hedrick.