SIOUX FALLS, S.D. — Apartment builders in Sioux Falls saw a record year in 2016, adding more rental housing than in any single year in the city’s history.
Building permits filed with the city show the number of apartments added last year rose nearly 1,600, the Argus Leader reported .
The industry’s future is moving toward fewer but more grandiose apartment projects, said developer Joel Dykstra. Sioux Falls apartment complexes are growing in size because developers said they’re opting for bigger lots outside of town.
“You’re seeing people going out a little bit, buying bigger parcels and building bigger projects,” Dykstra said.
Mike Cooper, who leads the city’s planning department, first noticed higher demand for rentals soon after the economic recession and the collapse of the housing bubble.
“People were still hesitant about getting into a house because of the number of foreclosures,” Cooper said. “We just started to see more people choose to rent instead of going out and looking for a house.”
Dykstra said an increase in demand for rentals is due to young professionals who want to avoid the debt that can come with home ownership. He said that young workers may have a job lined up in the area, but they want to get to know the city before buying a house.
“They want to experience Sioux Falls before they commit to a 30-year mortgage,” he said.
Dykstra said there’s also demand from retirees looking to downsize, especially with Sioux Falls’ increasing home prices.
“Lifestyles are changing,” he said. “There’s an awful lot of people who have to look at alternatives, so they’re doing town homes or they’re doing twin homes or they’re looking at apartments.”
Information from: Argus Leader, http://www.argusleader.com