Recycling houses for new neighborhoods in Sioux Falls

SIOUX FALLS, S.D. (KELO) — When the city of Sioux Falls has houses it wants moved from a neighborhood such as the Lotta area near Tomar Park, it calls Lynne Keller Forbes.

Keller Forbes and the South Eastern Development Foundation (SEDF) have moved dozens of houses donated by the city, Sanford and other entities to SEDF-developed neighborhoods and lots in the city.

“It can cost us $15,000 to tear a house down,” said Matt Tobias of the city’s public works department. “Rather than us tearing a home down…we are donating them to SEDF.”

SEDF is a nonprofit that helps income-based homebuyers in a five-county district. The South Eastern Council of Governments (SECOG) provides staff for SEDF.

“Nobody else is really doing this,” Keller Forbes said of developing neighborhoods with Governor’s Houses and recycled houses.

Governor’s Houses are part of a program started by then Gov. Bill Janklow in which inmates in the Springfield prison build houses for income eligible owners across the state.

Recycled houses are like the house Sanford needed to move from a corner of its parking lot. Or the house moved from Pam Road last week to make room for road project at 41st Street.

Recycled homes can be sold at market rate. The price range should be affordable for workforce housing, she said.

Tobias said SEDF’s work has helped when houses are in short supply.

“With our housing crunch, any houses that we can save,” Tobias said.

Keller Forbes said there are stories attached to each Governor’s House or recycled house SEDF sells.

Veterans, single parents, older buyers and young families are among those who have been able to buy the SEDF homes.

“Certainly we are impacting people’s lives,” she said. She estimated that about 70 homes have been sold through the SEDF program over the past several years.

Keller Forbes may be the name attached to SEDF housing but she said it’s an entire “amazing team” that makes the housing projects happen.

A house she’d want to live in

“Affordable housing doesn’t mean it’s not nice,” Keller Forbes said.

It’s important to have features such as decks and a washer and dryer, she said. A Governor’s House or a recycled house may have a two-stall or three-stall garage. People need the garage space to store items, otherwise, those items will be outside, she said.

In short, Keller Forbes said SEDF wants houses to be houses they would want to live in.

South Dakota Housing lists the maximum purchase price for a home under the South Dakota loan program based on income and household size as $300,000 for first-time homebuyers. For those that haven’t owned a house in three years, it’s $366,000.

Grasslands subdivision

A section of SEDF-owned acres will be filled with at least 20 recycled houses along streets like Bent Grass in the Grasslands addition. The neighborhood is western Sioux Falls, just off Marion Road.

“I think it’s kind of refreshing,” said SEDF employee Joe Croal. “Instead of wasting a decent house, you are re-using it.”

Croal was working inside a recycled house on Bent Grass on Thursday morning. The house had been stripped of its interior insulation, floor and other items.

“For the most part, we strip them to the bone,” Keller Forbes said of recycled houses.

It’s important to Keller Forbes to make use of every inch of space including keeping an original odd nook of a closet that had been expanded into a walk-in closet.

She and construction manager Dave Swier may need to negotiate on the use of space, Keller Forbes said with a laugh.

“Every house is a different or new challenge,” construction worker Brad Top said.

Top and Kurt Prange joked that Keller Forbes may change her mind during the remodel.

“Sometimes they don’t always see my vision,” Keller Forbes said in a good-natured response.

While Bent Grass Street will have recycled houses, an earlier phase of development contains recycled houses and Governor’s Houses.

“There’s 13 on this street,” Keller Forbes said of SEDF houses while driving on Lyme Grass Street.

There’s another 10 on a different street.

An original covenant would have prevented SEDF from bringing in ready-made Governor’s Houses or recycled houses to the Grasslands Addition.

Keller Forbes said SEDF bought the development since it couldn’t work under the covenant.

“We bought the whole thing so we could control it,” Keller Forbes said.

SEDF also bought the property where the Sioux Falls Boys and Girls Club was located on Sneve Avenue and 14th Street.

The old Boys and Girls club neighborhood

Under the agreement of the property purchase, the SEDF neighborhood needs to be a mix of Governor’s House and recycled houses, Keller Forbes said.

Neighbors were worried about SEDF’s plans for the development but Keller Forbes said once they learned about Grasslands and other projects, they were less worried.

“They thought it might bring the property values down. I told them it would bring their property values up,” Keller Forbes said.

One or two houses at a time

Although SEDF will often get asked if it’s interested in receiving or buying a house, Keller Forbes is always looking for possible houses or lots.

“Oh,…I should buy that. I think I will buy that,” Keller Forbes said after noticing a for sale sign in a yard. Odds are she will buy it.

SEDF construction workers or subcontractors were working on at least five houses on the morning of March 31.

One house in progress is near the corner of 4th Street and Cliff Avenue. The house had been abandoned for at least a year and a half. The backyard became an apparent gathering spot for drug use as it was filled with syringes. The windows were boarded and graffiti had been painted on the exterior walls.

But it was worse inside.

“We bought it sight unseen,” Swier said.

When Keller Forbes and Swier went to look at the interior they discovered hundreds of TVs, laptops and other items piled from floor to ceiling on the main level and in the basement.

On March 31, subcontractors were taping the drywall to prepare for paint. Keller Forbes pointed out the bedroom, kitchen and how, in this house, the washer and dryer would be moved to the basement to free up more space on the main level.

Keller Forbes and SEDF recently sent letters to lot owners in a Sioux Falls neighborhood.

“We bought four lots and closed on two this morning,” she said.

How it works for SEDF

SEDF originally used money through USDA Rural Development and South Dakota Housing to finance home buying for qualified individuals.

Keller Forbes said as conditions changed, she asked to use the money for construction and or purchase.

The sale of market rate homes helps to fund the Governor’s Houses for those making 80% of the median income, she said.

SEDF also works a bank and trust institution from Iowa. through the Community Reinvestment Act program where banks must make community development fund investments.

SEDF also works with the state prison system to hire inmates who qualify for community work release, Keller Forbes said.

The inmates do the demolition work inside houses, Keller Forbes said. They get paid $1.25 an hour but gain work experience. SEDF has been able to hire some inmates when they finish their prison terms, she said.

The debris in the house at 14th and Cliff filled eight loads of garbage. Swier said it saved SEDF thousands of dollars to have the inmates remove that debris.

Michael Crane is a consultant in housing, including affordable housing.

SEDF’s approach works in part because the cost of materials to build new houses is expensive.

If a house can be repurposed “it makes economic sense,” Crane said.

There are limits

Although SEDF will buy one or two or four lots at a time, it’s ideal if it can buy 10 acres, Keller Forbes said.

That space is increasingly difficult to find in Sioux Falls.

SEDF has four lots in Beresford. Those will be Governor’s Houses because it’s not efficient to have employees drive an hour and back to Beresford each day on a recycled house, Keller Forbes said.

The labor force is also limited in the state so like any other employer, it can be difficult find additional employees, she said.