Lead-Deadwood housing shortage is unique; new workers will be moving in to few affordable houses
LEAD-DEADWOOD, S.D. — Two towns with one shared problem, affordable and available housing. Lead and Deadwood area are expected to see an increase in jobs in the next 2-5 years. To ensure that those new employees have homes the cities have to work quickly to provide new housing.
“The problem we’ve got across the whole Black Hills, is that there’s a huge demand for workforce housing,” says Jared McEntaffer, Ph.D., Regional Economist for Black Hills Knowledge Network. “Every community in the region, big demand for workforce housing. But it’s tough to make that workforce housing; developers, land costs, there’s lots of pressures that make it so we build more expensive housing…there’s no empty houses anywhere, right? So they have to build this housing.”
McEntaffer was able to share his knowledge during a presentation at the Deadwood-Lead Economic Development Corp. meeting Tuesday in Deadwood.
In his PowerPoint he was able to point out that in the Midwest, the median house sale price is $213,500, in 2019. Not too far from the average price in Lead-Deadwood at $227,000. The median household annual income in the area is $50k.
Affordability could play a factor in why the estimated 2,500 people that commute to the area are not able to find housing, but the availability also plays a role.
“In the Lead-Deadwood area in the past – the recent past – there’s not been a lot of development either on the single family side or the multifamily side,” says McEntaffer. “So it’s been pretty slow going up until now. And obviously there’s some pressures that are spurring that growth in the development and increased construction for single-family and multi-family housing.”
Lead-Deadwood is expected to grow in population. By 2035, the population of ages 65 and older will grow by 86 percent. There is going to be a larger population of older generations who McEntaffer says are less likely to sell or move homes. Building new homes that are affordable for the incoming temporary workforce will help.
“Being a little bit extreme, all of a sudden you’re going to wake up on Monday and have 100 empty houses,” McEntaffer says. “So when there’s that excess supply you’re going to relieve some of the pressure in the market. So then you’re going to have say those young families those 2,500 workers that are commuting in to Deadwood to work – those 100 houses – maybe some of them can fill those.”