House Republicans delay vote on “workforce housing” bill

South Dakota state lawmakers converse on the House floor following contentious debate on a...
South Dakota state lawmakers converse on the House floor following contentious debate on a "workforce housing" bill.(Austin Goss DNN/KOTA)
Published: Jan. 20, 2023 at 7:43 PM CST
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PIERRE, S.D. - One of the most contentious bills of the 2022 South Dakota state legislative session had to do with funding for “workforce housing.”

Now, the same topic is heating up tempers again in the second week of the 2023 session.

The issue has left a deep divide between Republicans in Pierre over the last year, particularly in the House chamber.

A number of Republicans, along with Democrats, want to shift funding from a $200 million dollar housing bill to help create a housing infrastructure funding program. The bill, SB 41, clarifies confusion around how the money for affordable housing could be dispersed.

Rep. Roger Chase (R-Huron), a realtor, is one of the prime sponsors of that bill.

“In South Dakota, we work hard to fix problems as they arise,” Chase said during debate on the House floor. “SB 41 is a solution to the problem, I urge you to support this bill.”

But it’s support for the bill that divides them from “Freedom Caucus” Republicans.

Those Republican lawmakers argue, in part, that the bill is government stepping too far into the private sector.

Detractors also argue that the bill will send money only to wealthy contractors, and ultimately not have as much of an impact on “workforce housing.”

Rep. John Mills (R-Volga) introduced an amendment to the bill that would send the money directly to counties instead, allowing them to determine what infrastructure projects they would want to spend it on instead. But that amendment was easily defeated.

“The bill that we are talking about here basically sets up a separate, alternate means of banking in the state,” said Rep. Scott Odenbach (R-Spearfish). “If you are smart enough, you’ll go through the “government bank” once it is set up. It will be there in perpetuity with 2% loans, and if you go to private banks and get a 7% loan you will not be able to sell your properties at the same price.”

And while a vote on the bill itself seemed inevitable Friday, an obscure legislative rule was invoked by Rep. Tina Mulally (R-Rapid City) which pushed debate on amendments, and the bill itself, back to Monday. Meaning that one of the single largest appropriations of South Dakota taxpayer money in state history will have to wait until at least next week.

Chase pointed out that the legislature already appropriated the dollars in question last year.

“Passage of this bill will simply transfer the $200 million in the Housing Opportunity Fund to the newly created Housing Infrastructure Fund,” Chase explained. “No additional funds are being asked for from this body.”

Debate ended Friday with lawmakers discussing an amendment by Rep. Liz May (R-Kyle) that would remove the “emergency clause” from the bill. The emergency clause enables the funds to go out immediately, versus on July 1st. However, it requires two-thirds of each chambers approval, versus the simple majority that would be required if the bill did not have an emergency clause.

Proponents also suggested that the 2023 “construction season” will be missed if the funds do not go out till July.

“The homebuilders I have visited with are concerned with the fact that $150 million from the general fund is going to be spent by a few large investors, and small town homebuilders will run into supply issues,” said Rep. Julie Auch (R-Yankton).