Aug. 11, 2025

The number of available apartments in Sioux Falls saw a significant decrease through midyear, and rents showed some increases.

A semiannual report issued by the South Dakota Multi-Housing Association showed a 5.43 percent vacancy in market rate apartment units in July, down from 10.14 percent in January.

“This data highlights the continued strength of the Sioux Falls rental market,” Jeff Brooks, chair of SDMHA, said in a statement. “It also underscores the importance of ongoing development to keep pace with population growth and housing demand.”

The report includes data only on apartments reported by property owners and managers.

In the market rate category, there were 17,067 units reported with 942 vacant. An additional 1,306 units of new construction now are leasing and won’t be included until they stabilize at 85 percent occupancy.

“Overall, occupancy has been steady through the leasing months, and we’ve seen similar progress in reducing vacancy,” said Ashley Lipp, vice president of residential property management for Lloyd Cos. “New-unit deliveries have slowed down a bit, which has allowed the market to tighten back up.”

Leasing activity this summer has been strong, especially the past two months, she said.

“We’ve been particularly pleased with the increased traffic to our downtown communities and how those have been leasing,” Lipp said. “There were several new projects built downtown in the past two years, and we are starting to see them stabilize.”

Outside of downtown, renters continue to gravitate to townhomes with attached garages, she added.

“Residents love the house-like feel and the extra space offered,” she said. “We also have some single-family-home communities that have been very popular for people who may be downsizing or not quite ready to buy a home yet.”

At Cresten Properties, the company had its best leasing day of the year in late July, according to Austin Tuenge, area director.

“Our portfolio has maintained occupancy above market throughout the year. We continue to see this being the trend in our portfolio,” he said. “All of our floor plans are popular; however, villa and townhome communities offer a great alternative to traditional apartment-style living.”

Throughout the city, rental rates are up slightly over the same time last year:

• A one-bedroom averages $1,002 versus $994 last year.
• A two-bedroom averages $1,220 versus $1,999 last year.
• A three-bedroom averages $1,480 versus $1,461 last year.

Those don’t include new-construction properties still being leased up.

Property managers are continuing to offer incentives to draw new tenants.

“Sioux Falls is a competitive market, and most companies are still offering various concessions,” Tuenge said. “We are currently offering one month free on a 13-month lease.”

At Lloyd, “we are still offering concessions, particularly on our new projects that we are trying to stabilize before the winter months,” Lipp said. “Now that occupancy has started to gain momentum, we’ll likely start to see these taper off as well.”

The overall multifamily vacancy rate, which takes into account income-qualified housing, was 5.68 percent compared with 9.46 percent in January.

HUD properties saw an increase in vacancy from 0.64 percent in January to 1.85 percent in July — representing eight vacant apartments out of 433 units available, “which indicates that income-based properties are being utilized,” according to to SDMHA.

Tax credit properties also saw a slight increase in vacancy, from 6.35 percent in January to 7.17 percent in July. Of 2,816 available units, 202 were vacant.

Building activity in the multifamily sector is outpacing last year through July, with permits for 679 units issued compared with 574 in 2024, though still well behind the 1,175 units for the same time in 2023.

New projects this year include:

• The Nova, 4501 E. Bison Trail, Empire Construction.
• Jefferson Reserve phase two, 1105 N. Career Ave., Veldhouse Construction.
• The Wondery, 5600 S. Rateliff Ave., Empire Construction.
• Briarwood Reserve phase two, 6000 S. Coneflower Ave., Veldhouse Construction.
• Foss Flats, 1050 S. Foss Ave., Developers & Associates.

At Lloyd Cos., development has slowed “to allow the market to catch up,” but new options are opening this year, Lipp said. A new townhome community with attached garages, Harvest Ridge, is opening at 41st Street and Ellis Road, and Split Rock Commons is opening at 26th Street and Six Mile Road.

At Cresten, “we’re thrilled about what’s ahead,” senior partner Erica Mullaly said, adding that “while the development landscape has evolved,” the company will start the final phase of its Brixx community in northwest Sioux Falls later this year.

“Beyond 2025, we have additional land in Sioux Falls and are actively exploring creative options to bring thoughtfully designed, quality living spaces to the market,” she said. “There’s plenty more on the horizon.”