A state loan fund is opening up to developers who build apartments, duplexes and townhouses, but one lawmaker denounced the move as a race to the bottom.
South Dakota created the Revolving Economic Development and Initiative Fund, known as the REDI Fund, more than 30 years ago. A board approves low interest loans to companies that are starting up, expanding or relocating to the state. The goal is job creation.
But now the fund’s eligibility is expanding to builders of multi-family housing projects. Backers of the change, like state Sen. Craig Kennedy, D-Yankton, say it will help provide housing for workers.
“Part of economic development is making certain that people who either want to grow an existing business or start a new business have sufficient workers to do the jobs necessary in those businesses,” Kennedy said. “And the lack of housing available for workers throughout the state has become a significant problem.”
A legislative committee voted 4-1 to approve rules accommodating the change Tuesday during a teleconference meeting. The "no" vote was state Sen. Lance Russell, R-Hot Springs.
He said expanding the REDI Fund to multi-family housing projects is the wrong approach to economic development.
“The problem is that we’re not paying people a sufficient amount of a living in order to own a home and to be able to pay for it,” Russell said. “And I think what our economic development folks should probably start thinking about is how do we bring the kind of jobs to South Dakota that people can actually make a living doing.”
Russell says the move essentially asks taxpayers to provide subsidized housing so companies can keep wages low.
“It really in my estimation is a race to the bottom,” Russell said.
Statistics show South Dakota routinely ranks among the bottom five states in worker wages.