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- Salem, South Dakota, residents and businesses invested their own money to fund a new housing subdivision.
- The project aims to help the community recover from two derecho storms that caused significant damage in 2022.
- Local leaders raised about $1 million through grants, corporate donations, and contributions from community members.
SALEM, S.D. – In an effort to build new housing that will help this small eastern South Dakota city recover from two weather disasters in the same year, community leaders, local businesses and even individual residents have put up their own money – without any potential financial return – to help make it happen.
The town of about 1,300 people just north of Interstate 90 midway between Sioux Falls and Mitchell is still rebounding from two separate derecho wind storms that took no lives but damaged numerous homes and businesses in 2022.
To lay the groundwork for a new subdivision that could include up to 24 new houses, Salem economic development leaders needed to find roughly $1 million in 2023.
Two years later, the city and the Salem Economic Development Corp. (SEDC) have reached their funding goal and are using a combination of a state grant, donations from a local bank and insurance company, and contributions from about 50 businesses and individual residents to fund the project.
“It was amazing to see people wanting to invest in their community because they’re not getting any return on their money up front,” said Jeremy Grady, an executive at First Dakota Bank in Salem who also serves on the SEDC board.
At the time of the storms, Salem faced many of the same challenges in housing development as other small, rural South Dakota cities. That included a shortage of buildable lots, limited interest from homebuilders seeking to make a quick profit, and a lack of population and employment growth.
“Economic development had been dormant for some time,” said Mayor Glenda Blindert, co-owner of Blindert Insurance Agency and a leading proponent of housing and commercial development in Salem.
The SEDC was revived in late 2021 and obtained non-profit status, a board and bylaws to guide its efforts.
“For us, it wasn’t a chicken-or-the-egg thing because we know that in order to have more businesses we are going to need more housing,” said Grady.
In 2023, the SEDC began raising the roughly $1 million needed to buy the land and build the infrastructure for a new housing subdivision.
The SEDC was able to secure about $330,000 in a matching grant from South Dakota Housing, a state agency that uses state and federal funds to boost local development projects.
First Dakota Bank in Salem donated $50,000 in seed money and matched further donations up to $50,000, making the bank’s total contribution $100,000, Grady said. The Blindert Insurance Agency, the business co-owned by the mayor, contributed another $50,000, he said.
After that, the group was able to raise another $100,000 from 50 other local businesses and individuals who did so knowing that there would be no other return on investment other than helping the community grow and thrive, Grady said.
To date, four of the 24 lots in the subdivision have been sold and one twin home has been built as a “spec” home, he said.
Brian Kappenman is a developer who so far is the only buyer of lots in the new Salem subdivision. He bought three lots with plans to build two twin homes, which are essentially side-by-side duplexes. One of the twin homes is fully built and both sides are available for sale, Kappenman said.
Kappenman said he paid $42,000 for each of the three lots, less than half the per-lot price he paid in nearby Hartford, where he is also building homes.
Kappenman said efforts by the city and the SEDC to build out the infrastructure made his housing project more attractive by reducing overhead costs.
Kappenman said he hoped he would have sold his twin homes faster but high interest rates and location have dampened interest.
“They need to bring in some new businesses because nobody is going to build if there’s nobody to buy,” he said.
Mayor Blindert said the new subdivision will be a first step in what she believes will be a positive future for Salem.
“We’ll see more businesses, more property and sales tax dollars, and more families and children in our school system to keep it viable,” she said.
This story was produced by South Dakota News Watch, an independent, nonprofit organization. Read more stories and donate at sdnewswatch.org and sign up for an email to get stories when they’re published.
