John Hult/South Dakota Searchlight
About a tenth of the 450 employees at Trail King in Mitchell drive 100 miles a day to get there and back from Huron.
The pay is worth the drive, according to Trail King’s Lee Anderson, but that doesn’t mean they like it. Most would happily move to Mitchell, he said – at least they would if the city had a few more houses for them.
“The trick was our families from Huron, they don’t want apartments,” Anderson said. “That’s a temporary option, right? We employ blue-collar employees who want a garage.”
Trail King could hire 30 welders any day of the week, he said, but couldn’t promise them a place to stay. The workforce shortage has pushed wait times for customers from six months to one year.
“Because we can’t get enough employees, we can’t produce trailers fast,” Anderson said.
Trail King is among the Mitchell businesses that need employees — some to expand, others just to keep up.
Toshiba needs people to make printer toner. Performance Pet Products, the nation’s second-largest maker of wet pet food, also needs people. So do Enertech, which manufactures geothermal energy systems, and Boyd’s Gunstocks.
The city’s Avera hospital, meanwhile, is looking for nurses, and Gov. Kristi Noem was there in September for the groundbreaking of a $500 million soybean processing plant.
The jobs offer good pay and benefits, but that doesn’t mean the people who take them would be in the market for $350,000 homes — a common price tag for Mitchell’s newest houses.
That’s why Avera gave Mitchell Area Housing Incorporated (MAHI) 22 acres of land for middle income homes in 2019.
“They have a need for nurses, just like any medical facility out there,” said Mike Lauritsen of the Mitchell Area Economic Development Corporation. “Everybody’s short on nurses, so they get the benefit of it.”
The organization’s two housing projects got around $2 million in grants from the state’s $200 million Housing Infrastructure Financing Program.
The program has awarded $77 million to 46 projects so far, after two successive legislatures passed bills to allocate $200 million in state and federal funding. The first year’s efforts were hamstrung by questions over the housing authority’s legal ability to award money to projects untethered from affordable housing guidelines. The 2023 legislature adjusted the bill to give the authority the power to award the money.
Starter homes in short supply
The two-year-old MAHI organization aims to fill the housing gap in a city the group says will need 400 total homes in the next 10 years.
“We’ve been averaging 25 a year for the past 10 years,” Lauritsen said. “We’re going to add around 100, and we’re still going to be short.”
Organizations like MAHI have been around for years in cities like Brookings and Aberdeen, according to Terry Sabers, the retired Muth Electric executive who now leads the Mitchell housing group as a volunteer.
“No one’s built a starter home in Mitchell in 20 years,” said Sabers. “There’s not been a champion to take it on.”
The grant-supported homes should cost less than $250,000, Sabers said, though sizes and prices will vary.
On Nov. 14, the state housing authority awarded MAHI the second of two grants meant to cover a third of the cost for streets, water and sewer and street lights for the new homes. Half the homes will be near the city’s hospital; the others will be north of Lakeview Golf Course in the northwestern edge of town.
The infrastructure money directly lowers the price for the buyer, Lauritsen said, as will the partnership with Mitchell Technical College, whose students will help build the homes.
“If we were to distribute the cost of the infrastructure back into the lots, you’re almost at $100,000 just for the lot,” Lauritsen said.
The infrastructure grants can only cover a third of the infrastructure cost, though, which means “you’ve still got to borrow the other two-thirds,” Sabers said.
“It’s the best of times because you have free land and grants, but it’s the worst of times because look at the interest rates,” he said.
Interest rates for a 30-year fixed mortgage are above 7%.
Housing brings former Mitchell resident home
The developers are pushing forward regardless. Barring unforeseen hurdles, Sabers said, construction will begin next spring.
That will be welcome news for people like Ellie Hohn. The 24-year-old Mitchell native became the beneficiary of MAHI when she bought a Governor’s House near Dakota Wesleyan University.
The homes are built by inmates at Mike Durfee State Prison in Springfield, then shipped to their final location upon sale through South Dakota Housing.
Hohn’s post-college job search had her considering places like Sioux Falls and smaller towns around Mitchell, where she reckoned she might have an easier time finding a house.
Were she willing to dump half her money into mortgage payments, she said, moving to Mitchell would’ve been simpler.
“I wanted something I could afford and still have a life,” Hohn said.
She thought about the Governor’s House program, but “wasn’t sure how to go about it.” Then she saw a notice in the Mitchell Republic on MAHI’s efforts to bring one to town. She reached out to Sabers, and soon had the keys to her home.
“This was where I wanted to be,” Hohn said.
If someone isn’t committed to Mitchell already, the city has another enticement: $1,000 payments to anyone from the outside who puts down roots.