Our Spearfish neighbors are holding an important meeting tonight at 6 p.m. at Hudson Hall downtown. The Spearfish Ag Land Committee will discuss the preservation of agricultural land in the Spearfish Valley.

The discussion will likely revolve around the Runnings' property, a 15.4-acre tract near Evans Lane. The land is among the turf in Spearfish Valley, on the north side of Spearfish, that has long been used for farming but now is on the market. A local correspondent tells me that one development deal has fallen through; the property is listed online for $989,000. Developers see an opportunity to build housing to meet demand in a tight market. Advocates for agriculture and sustainability contend that the community is served at least as well by maintaining the Valley's agricultural traditions as well as some local economic diversity.

Ray Running bought his 15 acres* after serving in the Army Air Corps in Italy in World War II. According to Running's 2011 obituary, he claimed his Valley corn was the best corn in South Dakota. Running used his SDSU education and his experience to teach agriculture to veterans in Meade County.

A local Spearfish correspondent sends me information from old-timer Linfred Schuttler, who farmed the Valley for strawberries, raspberries, and other produce. He says the Valley's orchards once supported exports across the Black Hills and to Wyoming and Nebraska. "There were thousands and thousands of apple trees," says Schuttler, "all the way down to the Redwater before there were stands. People would come in the fall with their wagons for miles.” Schuttler is worried that housing development in the Valley will cause more of the irrigation ditches that have boosted the Valley's productivity will be filled in. "Once they're lost," says Schuttler, "they can't be regained."

Can Spearfish have more housing and healthy local food? Tonight's meeting at Hudson Hall will give Spearfish residents the chance to wrestle with that question. Having rented in Spearfish, I recognize the need for affordable housing for workers and families in the Queen City. But I also recognize the unique value of the fertile Spearfish Valley as an economic resource for small, independent farmers. Spearfish needs to figure out the proper balance between these competing aspects of quality of life.

Update 2015.02.03 15:08 CST: An earlier version of this article erroneously attributed additional information about Ray Running's land purchase to a Spearfish resident who, in turns out, has no knowledge about Running's history. I have edited out that information and apologize for the error.

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The Belle Fourche Development Corporation recently won one of the state's fourteen workforce development grants with an affordable-housing plan that mirrors one proposed on the Madville Times seven years ago. The Belle Fourche housing plan also reveals a fundamental market failure in providing housing for workers.

The state is giving Belle Fourche $175,200 to help buy three lots, build three basements, plunk down three three-bed two-bath Governor's Houses, and hook them up to utilities. The total cost for each property will be $143,884. The city will also draft high school students taking vo-tech classes to build two more new houses during the next school year.

BFDC's application says that big new companies since 2013 have stimulated the Belle Fourche economy with $20 million in capital investment and 160 new jobs. However, those new workers can't find decent affordable housing in Belle Fourche and are having to commute from Rapid City and elsewhere. BFDC includes in its application a July 2014 letter from Permian Tank plant manager Robert Sieve saying that affordable local housing is "an important factor in our employee satisfaction and retention."

I agree with plant manager Sieve: a two-hour commute increases the chances that workers will keep their eyes open for work closer to home and stick the company with more frequent turnover costs. The Belle Fourche Development Corporation is serving the interests of labor, management, and the community as a whole in promoting affordable, quality housing.

But I see in Belle Fourche's plan the same market failure that I've seen in housing development in Madison. Back in 2008, the Madison City Commission granted developer Randy Schafer a tax increment financing district to subsidize construction of working-class housing that Schaefer told me would not get built without government help. In his last great economic development project, Richard Benda convinced the Lake County Commission that market demand wasn't enough to build workforce housing and secured tax increment financing for 28 townhouses in Madison. Tax increment financing will build another 14 housing units on the east side of town.

The assumption in Madison, Belle Fourche, and (as evidenced by the grant award) Pierre is apparently that the market is broken. Housing is a basic need; the market fails to build and maintain enough decent, affordable housing; therefore, government must act with tax subsidies and labor provided by prisoners and public school students.

I agree that government properly acts to redress market failures. But what part of the market is failing? Is supply failing to respond to obvious demand? I have a hard time believing that South Dakota contractors are willing to turn down an opportunity to make money building houses. It seems more likely the market failure lies on the demand side: workers would like houses, but their new employers in Belle Fourche, Madison, and elsewhere in South Dakota aren't paying the wages that will convince the bank to sign the mortgage.

Workers need houses. Belle Fourche is taking reasonable action to help workers get houses. But I worry that Belle Fourche's action and the state money supporting it, like other state programs, subsidizes employers who are shorting their employees the full paychecks they deserve.

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The Bureau of Finance and Management issued it latest report on South Dakota's economy Wednesday. How're we doing?

  1. As of November 2014, our non-farm employment was up 3,000 jobs, 0.7%, over November 2013. Financial activities, education and health, and leisure and hospitality shed jobs.
  2. Nationally over the same period, non-farm employment was up 2.0%.
  3. In 2013, our per capita personal income was 19th in the nation and $1,400 above the national average. Funny that we don't value teachers enough to ensure they rank similarly in pay.
  4. In Q3 2014, our personal income grew at 1.8% compared to a national growth rate of 3.9%. Farms are dragging us down: farm income dropped 20.8%, while non-farm income matched the national rate at 4.1%.
  5. Over the last 12 months covered by the report, family housing permits dropped 12.6% over the previous 12 months. Total value in those permits dropped 4.2% (about $24 million).
  6. The number of newly permitted Minnehaha County family units dropped 10.5% but increased in value by 2.4% (about $6 million).
  7. The number of newly permitted Pennington County family units dropped 45.6% and decreased in value by 27.3% (about $25 million).
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You folks think I go too far in razzing folks in the public eye for their Christmas cards? Check out Rep. Rev. Steve Hickey's take on the Christmas card Dollar Loan Center boss Chuck Brennan is sending:

Rep. Rev. Hickey says the recipient of this card reported that Brennan included $100 with this card. The recipient donated that $100 to South Dakotans for Responsible Lending, the group Rep. Rev. Hickey has formed with Sioux Falls restaurateur Steve Hildebrand to place on the 2016 ballot an initiative to cap interest rates at 36% and put Brennan and other payday lenders out of business.

Brennan shows his true values by featuring on the cover of his Christmas card not his family but a glowing glamour shot of his new house in Newport Beach, California. Zillow lists the May 2014 sale price of this 6,600-square-foot mansion as $9,000,000, with an estimated monthly mortgage payment larger than the annual paychecks of two-thirds of Brennan's customers.

Further tackiness ensues as Brennan mentions that his dog "doesn't really do a whole hell of a lot," language even this secular materialist would never consider using in a Christmas card. Brennan then closes by spending as much time talking up his business ventures as his family... because that's what Christmas is all about: business and the accumulation of material wealth (and, Gaia help us, a TV show about his upcoming pawn shop).

Brennan probably just whipped this Christmas card up himself. For the fight against the interest-rate-cap initiative, the payday loan magnate will surely hire much more skilled message-meisters to persuade South Dakotans not to interfere with Brennan's exploitation of South Dakota's working poor. After all, South Dakotans need those triple-digit-interest loans... and his fourth-grade son needs those summer sailing lessons.

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A Facebook friend points out that Worthing has published its new housing study. I can't help replying, "Worthing has houses?"

Heck yeah, more than 300! Twenty of them sold last year for a median price of $130K; none sold for more than $150K.Worthing has benefited from its location ten miles south of Sioux Falls in picking up population. In the 1990s, the number of Worthing households grew by 61%, the same as surrounding Lincoln County. But in the next decade, Worthing's household increase fell back just a bit, to 58%. A lot of towns the size of Worthing (their total population is 958, projected to add another 172 over the next five years) would envy that growth rate. But in the 2000s, Lincoln County as a whole added households at a rate of 90%. Why didn't Worthing keep up?Perhaps Worthing is the poster child for the impacts of cheap gasoline and the housing bubble in South Dakota. Check out new housing construction from 2000 to 2013:Worthing Housing Study-New Construction2000-2013Pre-recession, Worthing regularly saw more than 10 new housing units a year. Then when we started seeing 3s leading the price signs at Cenex, Worthing's housing starts dropped off a cliff. In the last six years, Worthing has issued five new housing construction permits. Ouch.Community Partners Research recommends that Worthing "be realistic" and not expect large-scale residential growth... but I'm feeling optimistic this morning. Worthing, I say nuts to that. Go to marketing war. Remind people that you are closer to I-90 and Sioux Falls than Lennox, and probably prettier (I don't know how you quantify that, but hey! If I may plagiarize Susan Wismer, this isn't academia; it's marketing!). Put some of your higher than average income (median household income 32% higher than state median) to work fixing up houses—the report says more than a quarter of your core-area houses are in need of major repair.The report encourages Worthing to consider a number of incentive programs, like low-interest loans, tax breaks, and lower fees for utility hookups, and probably some other public action that will prompt Sibby to co-opt the conversation and holler about public-private partnerships and government interference in the marketplace. But I have to wonder: did the 2008 recession and the normalization of three- to four-dollar gasoline mark a hard reset from which certain bedroom communities at a certain distance from urban hubs will not recover? If there is a permanent shift away from sprawl and long commutes, perhaps Worthing's growth strategy will have to focus just as much on building local businesses as it does on housing.

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The Richard Benda Memorial Apartment Complex holds an open house today in Madison to celebrate the vital role crony capitalism plays in meeting market needs.

Jane Utecht's report on the tax-increment-financed Lake Area Townhomes indicates there is great demand for housing in Madison:

"We have a lot of people call because there is not enough housing in Madison," said Jamie McKinney, manager of the Mills Property office in Madison. Because of this shortage, 15 of the 28 townhouses are already rented, she said, even though only 14 are complete.

McKinney said some calls come from college students, but most of the townhouses are filling with people new to town -- some working at local factories, some at the university, some in health care.

"You hear countless stories of people who commute or turn down job offers" because they can't find housing in the Madison area, said Julie Gross, executive director of the Lake Area Improvement Corporation. "If we want to grow, we need housing [Jane Utecht, "New Townhomes Hosting Open House Wednesday," Madison Daily Leader, 2014.08.26].

Utecht notes that the Lake County Commission just approved another tax increment finance district to support a similar housing development on the east side of town.

Utecht fails to find anyone who can answer this fundamental political and economic question: if these housing units are such a sure sell, if "countless" commuters and job-seekers are aching to come to Madison, why does government have to lift a finger—or in this case, one penny of tax burden—to meet this market need?

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Sur la table: Rosemarie Cornelius (left) and Emma "Pinky" Iron Plume (right) discuss housing and community development with me where business happens in Manderson: the back table at Pinky's store, 2014.08.18.

Sur la table: Rosemarie Cornelius (left) and Emma "Pinky" Iron Plume (right) discuss housing and community development with me where business happens in Manderson: the back table at Pinky's store. Photo by Francis, 2014.08.18.

Emma "Pinky" Iron Plume opened Pinky's, the only store in Manderson, South Dakota, thirty years ago. She continues to run the store on BIA Highway 33 today, providing her neighbors and folks from the nearby elementary school and the Oglala Lakota College branch campus a place to buy a few staples and snacks and gather to do business.

Iron Plume serves her neighbors with an even larger economic development project on the Pine Ridge Reservation. Through the Oglala Sioux Tribe Partnership for Housing, Iron Plume helps Indian families become homeowners, which Iron Plume says is central to personal and community economic security.

The benefits of homebuilding and homeownership are obvious. Building homes creates jobs and economic activity. It addresses the critical housing shortage on the reservation, where Iron Plume sees families doubling and tripling up in the few available houses. Owning a house not only makes a family safer, healthier, and happier but also gives that family a real sense of ownership and a stake in the community that does not exist when a family must bounce from rental to rental or other temporary lodging.

Getting Indian families into new homes isn't easy. Iron Plume says the OST Partnership for Housing used to build homes, like Habitat for Humanity, but found that model too costly to coordinate and carry out. Now the Partnership focuses on educating homeowners and finding allies to help them buy homes.

A key part of that education is financial education. The Partnership helps Indian families learn about credit and savings. Iron Plume says the group warns its clients of predatory lenders, both the payday lenders and the subprime mortgagers who crashed the economy a few years ago.

Once families have a grip on their finances, the Partnership helps them find willing lenders and homes, often the small, affordable Governor's Houses built by state inmates.

The Partnership also helps families find land. Those who have driven through the wide open expanses of Pine Ridge would think that finding available land would be no big deal. But viable building land is hard to find on the reservation. Infrastructure is limited: a lot of places around Manderson, Wounded Knee, and Porcupine don't have electric lines or water pipes. (Pinky also notes that AT&T hauls extra cell-phone transmitters to Sturgis for the Rally but provides unreliable cellular service to Pine Ridge year-round; get with it, AT&T!) The Partnership thus has conversations with utilities and agencies to try to extend infrastructure to make new land available for development.

Where infrastructure exists, land ownership is complicated by fractionation, the slicing up of ownership through inheritance. The Oglala Sioux Tribe is using Cobell settlement money to buy back and consolidate small tracts into viable housing plots. Iron Plume says the tribe will keep ownership of the buy-back land and lease it out to homeowners in 50-year intervals.

So far, the Partnership has helped put over 100 families into homes of their own. The Partnership has now received a grant from the Administration for Native Americans (under the federal Department of Health and Human Services) to help young Indians invest in homeownership and other economic development. The Partnership will use that grant to launch a savings-match program in 2015: young Indians (age 16 to 26) who apply can receive two dollars for every one dollar they place in an "Individual Development Account." The money invested must be earned income, not gifts from Grandma. The IDA money must then be used to buy a house, take postsecondary classes, or start a business. The match goes up to $1,500, so young investors can turn $1,500 into $4,500.

The goal of the grant program, says Iron Plume, is to create assets. Thus, the program will also include an insurance fair to teach its young participants how to protect their assets. The program will offer a marketing workshop to young entrepreneurs to help them expand their sales and create even more assets.

Iron Plume says the Partnership has promoted other projects to help her neighbors with homemaking. Among other things, the Partnership has promoted food self-sufficiency. Iron Plume recognizes that a lot of the prepared foods she sells at Pinky's are not the cheapest or healthiest options. She encourages her neighbors to try making meals from scratch. The Partnership has given out cookbooks. It held a canning workshop last year and has a jelly-making workshop coming up. Iron Plume says a lot of her neighbors garden and derive great satisfaction from that bit of self-sufficiency (not to mention the chance to make maybe one less trip to Walmart in Rapid). She sees local food as an important part of the Partnership's philosophy of centering life on the home.

Pine Ridge and our Indian neighbors face all sorts of challenges, but Pinky Iron Plume views every challenge as an opportunity to find new partners to help. Iron Plume tackling those challenges both as a traditional entrepreneur, selling goods to her neighbors and providing a meeting place for her community, and as a social entrepreneur, helping others use and build their financial well-being. The Oglala Sioux Tribe Partnership for Housing is a good example of a local effort building cooperation among numerous agencies to make life better on Pine Ridge.

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One of Richard Benda's final public projects was convincing the Lake County Commission to give a tax handout to his employer Lloyd Companies' housing project in Madison. In homage to Benda's crony capitalism, the Madison City Commission is following up with another housing handout. At Monday's meeting, the city commission approved a third tax increment district for Madison, this time to help Brenda Thompson build 14 townhome units on Northeast Third Street.

Given the experience of Benda/Lloyd last year and Regent and real estater Randy Schaefer in 2007, it appears that no developer can afford to build housing in Madison without government cutting their expenses by applying their taxes to paying off construction instead of supporting public works... which is funny, because supposedly we're building these houses because there's such great demand due to Global Polymer and other employers moving into town.

Are market forces really not enough to get developers to invest in housing in Madison? Or is Madison simply suffering from the same disease that ultimately felled Richard Benda, the idea that public economic development efforts are just one more way to help your rich friends get richer?

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