Aug. 16, 2021

A semiannual vacancy report shows a dramatic decrease in apartment availability in Sioux Falls.

With 16,737 units reporting, the July survey by the South Dakota Multi-Housing Association showed an overall vacancy of 3.21 percent, down from 6.6 percent in January.

“It has been over 10 years since we have seen numbers like this,” the report said.

“We are in a remarkable time with a record number of people moving into the area. This, with a tight real estate market, makes for limited choices to purchase. The rental industry is seeing a rare occupancy rate for the area.”

The last time the number of vacant units approached this level was 2012, the report said, while noting new apartments are under construction and “should relieve some pressure in the future.”

Through July, the city has issued building permits for 1,181 apartment units, up from 537 for the same time last year.

The drop in vacancy for market-rate properties was “astounding,” the association said. It fell to 2.69 percent in July from 6.39 in January.

That represents 387 vacant units citywide.

Studio apartments are especially hard to find, with just 10 reported available citywide. One four-bedroom unit and one five-bedroom apartment were available at reporting time.

Vacancy among properties qualifying for federal Housing & Urban Development, or HUD, assistance, also are experiencing historically low vacancy at just 0.43 percent vacancy, or one unit, compared with 1.27 percent in January.

Tax credit property vacancy dropped to 7.4 percent in July from 9.1. percent in January. Those numbers can lag because of the time it takes to qualify for such housing.

Policy changes are needed, the multihousing association suggested, pointing to a summer study of workforce housing needs by the Legislature.

“We are actively participating and hopeful for some positive changes for our industry in the 2022 legislative session,” the association said in its report.

With nearly 100 percent occupancy, apartment market enters historic territory