VIEWPOINT | Managing growth in a booming city

Guest column by Mayor Paul TenHaken

Sioux Falls continues to be recognized as one of the fastest-growing cities in the nation by all accounts, and as our 2023 numbers reflect, the momentum shows no signs of slowing down.

In 2023, building permit valuations in Sioux Falls exceeded $1.1 billion, marking the second-highest valuation total ever at $1,115,671,406. 2023 was behind a historic, unprecedented year in 2022, where we hit almost $2 billion in permit valuations. That year could be considered an anomaly because we permitted large projects like $170 million for the expansion of our wastewater treatment plant, two massive development projects in downtown with the Steel District and Cherapa II, two large healthcare projects for Sanford Health, and the parking ramp for the Sioux Falls Regional Airport. Moving forward, we believe our standard for the annual building permit valuations will reach the $1 billion threshold, and that’s what we are projecting for 2024. While we are anticipating a softer year ahead overall, we do anticipate a few larger projects filing for permits, including the South Dakota One Stop office building that will host over 650 employees in the Dawley Farm Village as well as a new development for the Railyard Site in downtown.

VIEWPOINT: Who's gonna fill their boots?

In 2023, we had a large variety of commercial projects with manufacturing, apartments, office space, strip malls, hotels, and restaurants, which signifies a diverse and healthy economy for our community. We had close to 20 projects worth over $10 million in 2023, with the top five in various industries like education, housing, manufacturing and healthcare.

The number of housing units permitted in 2023 was down. Sioux Falls added just 421 new single-family units, down 33.8 percent from 2022 and 50.5 percent from 2021. A total of 1,930 units for multi-housing were permitted, which was a 42.3 percent decrease from a large growth year in this space in 2022, but a 6 percent increase from 2021. We believe the most significant reason for this decline in housing units is due to higher mortgage rates at about 7 percent in 2023. We’re seeing lower rates to start 2024, which is a good sign heading further into this year.

One other story of note in 2023 was the record number of inspections performed. Our team carried out 68,800 inspections, which is an increase of more than 2,000 from the previous year. This is one of the reasons another building inspector will be added to our team, increasing the total number of city inspectors to 20. As our city continues to grow, we are investing in the resources necessary to ensure we maintain our service levels.

In 2023, we estimate an addition of 5,007 people to our city, which brings our total estimated population to 213,891. This is a 2.4 percent increase, which is considered an average growth year for population. We experienced historic growth in 2021 with an increase of 3.5 percent and 3.1 percent in 2022.