There were a few rumbles of discontent when Gov. Bill Janklow unveiled a plan in the mid-1990s to use prison inmate labor at South Dakota’s Springfield Correctional Facility to build low-cost homes for the elderly.
“I always believed the Governor’s House program was a good program, but it did take away work from general contractors,” said Mike Jung, an Aberdeen builder.
The Governor’s Senior Housing Program as approved in August 1995 by the South Dakota Housing Development Authority called for 672-square-foot homes that sold to qualified buyers for $15,900. The very next year the size of the homes rose to 768 square feet and the price rose to $18,100.
But more building contractors were noticing, meanwhile, that the new program had the state competing with private enterprise.
“For years we were sort of at odds with this program because, quite frankly, it’s our competition,” said contractor Mel Zelmer of Tea. “They had a bit of an advantage with their labor costs.”
But there’s a new development in what has since been renamed the Governor’s House program, which now provides 1,008-square-foot homes — two bedrooms, one bath — moderately priced at $35,500. In one of the most significant changes since the program began, the South Dakota Housing Development Authority now allows qualified families to buy the homes through private builders.
But there are also other newly approved changes:
• Annual income limits of $42,280 for households of one or two people and $48,320 for households of three or more;
• School districts in rural communities are now allowed to buy Governor’s Houses to house teachers;
• Developers will now be allowed to buy Governor’s Houses for rental purposes when financed under programs requiring long-term affordable rent limits targeted to low-income families.
“These are very important changes for the program. They’re very significant, especially the partnership with builders,” said Paul Kostboth, director of single family development for the South Dakota Housing Development Authority.
He added that allowing rural school districts to buy the homes is another innovative twist.
“If it’s another tool that schools can use to help recruit and retain qualified teachers, what a wonderful use for the program,” Kostboth said.
As of this week, there are 1,994 Governor’s Houses scattered across all 66 counties in South Dakota.
Zelmer, who co-chaired a group representing the South Dakota Homebuilders Association that helped hammer out the details, agreed the changes amount to a major remodeling project for the program.
“What the program does is open it up to where a builder can buy a house, put it on a foundation and sell it at a minimal profit,” Zelmer said.
Mike Jung, the Aberdeen contractor who also helped work out the changes in the program, said most builders probably won’t use the program because the margins of profit are so slim. But some will do it as a service to homebuyers in their area, who don’t have the expertise that builders have in lining up the contractors necessary to finish a home.
Jung adds that he believes the program has definitely been a benefit to the state in one of its main purposes — teaching prisoners valuable job skills.
Kostboth agrees. He said a total of 1,952 inmates so far have received a total of 1,937,216 hours of on-the-job training through the program.