Mayor's budget concerns home builders

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RAPID CITY, S.D. (KEVN) - On Monday night Rapid City Mayor Steve Allender presented his draft of Rapid City's 2019 budget, but one local group is worried about how fee increases for building permits could affect affordable housing.

Last night during a public budget meeting, Mayor Allender proposed a flat rate of $5.50 per $1,000 of a home's valuation as well as an additional $203,000 for the city's general fund for 2019.

Mayor Allender says the increase is necessary because the building permit fee schedule has not been updated in more than 25 years.

Steve Allender says, "It's (building permits fees) are for all construction projects, residential, commercial, remodel, everything. It's across the board because that is a large item. It is perhaps the item that the rate has not been adjusted for the longest period of time, and it's the one that took the most research."

However, the Black Hills Home Builders Association says they're concerned about how the proposed fee increase could affect affordable housing.

Dean Hedrick, president, Black Hills Home Builders Association, says, "The Black Hills Home Builders Association, the South Dakota Home Builders Association, and the National Association of Home Builders believe in home ownership for everyone. For every thousand dollars the price of a home goes up, over 150,000 people nationwide can no longer afford a home. We don't want that to happen here in Rapid City."

Hedrick also says the rates the city charges may not have changed, but the fees that they collected have increased proportionally to the rising costs of a home.

Mayor Allender counters that the fee increase should've happened years ago so that the spike wouldn't be as huge.

Steve Allender says, "The culture here says you can't do that. You can't be the mayor or the council member who votes to raise fees because then you're going to lose a political point down the road."

The Rapid City Council would like to host a public budget hearing to get the community's input, but they did not schedule a date yet.