Simplified: Three separate projects are in the works right now to address a growing need for affordable housing in our community – all of which receiving some degree of financial support from the city. Sioux Falls Simplified checked in with the city and local nonprofits to get an status update on these projects and what they'll mean for the community.

Why it matters

• The need for affordable housing keeps increasing – especially as the gap between wages and the cost of living grows. Larissa Deedrich, executive director of Sioux Falls Housing said there are currently 2,000 people on a wait list for rental assistance.
• Deedrich said it's a common misconception that the people who need or receive housing assistance are unemployed or somehow lazy. But that's not what she's seeing. Almost all of the people who receive Section 8 housing vouchers in Sioux Falls are working full-time. The vouchers simply help fill the gap.

"It is just enough to help people so you don't have to decide, 'Do I buy diapers or do I pay rent?'" Deedrich said. "These are folks who are everyday working class people."

• Right now, there are three apartment projects underway that will help address these needs – each with at least some financial support from the City of Sioux Falls.

Here's a closer look at each project:

Southeastern Behavioral

This project – located in the 600 block of 11th Street in the so-called Mercato Block – was originally announced back in 2024, but delayed a bit when some federal grant funding fell through, according to Logan Penfield, assistant director of planning and development with the city.

• After some supplemental funding – including a $300,000 zero-interest loan from the city that's expected to go before the council in the coming weeks – the project is back on track and expected to break ground this summer, according to a statement from Southeastern Behavioral Health.

The project will bring 55 low-income housing units and new office space for Southeastern to help connect residents directly to support services.

"As housing is a huge aspect of health, this project creates a healthy space for people to foster personal growth, emotional wellness and a brighter future," the statement from Southeastern read.

The City Council in 2024 voted to approve a $1 million to help get the land ready for construction. Additionally, the city around that time also contributed $1.8 million in federal funds to the project – bringing the total city support to $3.1 million.

The new building is expected to open in the fall of 2027.

Rosa Parks Apartments

A project in east-central Sioux Falls is also in the works. The new Rosa Parks Apartments will be located at 4500 E. Cynthia Drive, not far from the intersection of 26th Street and Sycamore Avenue.

• This project includes a $350,000 zero-interest loan from the city to be paid back over the next 30 years.

It'll also provide 29 new low-income housing units, including a mix of one-, two-, and three-bedroom units to specifically help families in the community.

This building will also have some project-based vouchers. That means there'll be Section 8 vouchers specifically assigned to certain units in the building.

• People who live there will receive rental assistance, and, unlike the housing choice vouchers, they won't be able to take that assistance with them when they move.

These vouchers help people keep their rent more manageable so they can save money and stay in stable housing to avoid needing even more social services, Deedrich said, emphasizing again that these vouchers are serving people with full-time jobs.

"These are not apartments that are designed for people that are not working," she said. "They have to be able to pay utilities, rent and make ends meet."

Rhys Apartments

The new Rhys Apartment project is the largest-scale affordable housing under construction right now in Sioux Falls. This building – located at the former Gage Brothers site near 12th Street and Interstate 229 – will have 178 units with a mix of two-, three-, and four-bedroom apartments.

• The city kicked in a $2 million zero-interest loan to make this project possible, and it's expected to also have 44 project-based units with those Section 8 vouchers.
• This project also received significant support from the state, with $42 million in bond financing from South Dakota Housing.

Penfield said one great aspect of this project in particular is its proximity to a bus stop.

"Transit is so important," he said. "It's much easier to find open land on the edge of town, but that makes it really hard for some of these people that don't have reliable cars and transportation."

What happens next?

The need for affordable housing isn't going anywhere, Deedrich said. Sioux Falls Housing spends $17 million each year in Section 8 rental assistance, and there's still 2,000 people on the waiting list.

• If the funds were available at the federal or local level, Deedrich said she could foresee the nonprofit doubling its impact. There's just that many people who need rental assistance.
• Sioux Falls Housing is also working to fill the gap as best it can with an ongoing capital campaign. You can learn more and donate here.

"This is always going to be a continually growing need," she said. "Until wages and until salaries match the cost of living, there’s always going to be a need for these kind of housing projects."