Key facts
- Fall River Health Services is investing $2.3 million in a housing subdivision in Hot Springs, South Dakota.
- The project aims to create 48 affordable housing units.
- The hospital has a 10% workforce shortage, with housing availability being a key issue.
- South Dakota Housing Development Authority has provided a $1.2 million grant for the project.
- The housing units will include single-family homes and multi-family buildings.
- Prices for homes are expected to range from $285,000 to $350,000, including the lot.
Fall River Health Services, a small independent nonprofit medical center in Hot Springs, South Dakota, is investing $2.3 million in a subdivision project to address a critical shortage of affordable housing for its employees. This initiative is a first-of-its-kind in the state, where employers are increasingly seeking solutions to worker housing scarcity.
The hospital's investment covers a portion of the $3.4 million needed for infrastructure development, which could lead to 48 new housing units near the hospital campus. Fall River Health faces a 10% workforce shortage, with 19 open positions, primarily in direct patient care. The lack of affordable local housing has been a significant barrier to recruiting and retaining staff, leading to increased reliance on expensive traveling medical professionals.
Jesse Naze, CFO of Fall River Health, stated that wages and benefits are not the issue; housing availability is the primary deterrent for potential employees. The hospital has lost numerous prospective healthcare workers due to this issue.
This project aligns with a broader trend in South Dakota where businesses are exploring housing solutions for workers. Examples include Wall Drug providing mobile homes for seasonal staff and businesses in Keystone offering RVs for H-2B visa workers. However, Chas Olson, executive director of the South Dakota Housing Development Authority, noted that Fall River Health's investment in permanent housing for long-term business and community benefit is unique.
The South Dakota Housing Development Authority has supported the Cascade Hills subdivision project with a nearly $1.2 million grant from the Housing Infrastructure Financing Program. This funding is expected to reduce lot prices by approximately $30,000 each and potentially lower rents by up to $100 per month. The authority had been discussing housing challenges in Hot Springs with local officials for several years.
The development plan includes a mix of single-family homes, villas, duplexes, and townhomes. Single-family homes of about 1,300 square feet are estimated to cost around $350,000, including the lot, while smaller units could be priced as low as $285,000. These prices fall within the state's definition of affordable housing. Project managers are also working on a special mortgage program for hospital employees, potentially refunding lot costs if they remain employed for at least five years.
The 11-acre site, currently open pastureland, is slated for infrastructure work, including utility installation and road construction. Private developers will build the housing units, though they are not yet on board. The local school district faces similar hiring challenges due to the housing shortage, with teachers turning down offers or leaving because of difficulties with homeownership. The full development and sale of the housing is anticipated to take eight to 10 years.