Sioux Falls offers loans to spur rental rehabilitationThe Pettigrew Heights rental rehabilitation project in Sioux Falls lets property owners borrow up to $25,000 for exterior repairs with a low interest loan that carries no cost and no interest for six months.
SIOUX FALLS (AP) — Landlords in what some consider a rundown area of South Dakota's largest city have been offered an incentive to spruce up their buildings as part of a pilot program.
The Pettigrew Heights rental rehabilitation project in Sioux Falls lets property owners borrow up to $25,000 for exterior repairs with a low interest loan that carries no cost and no interest for six months. Property owners have five years to pay it back.
Pettigrew Heights has about 250 buildings, totaling about 700 rental units, said Brent Tucker, community development program specialist for the city. The neighborhood was selected for the initial project because many dwellings are in need of repair, he said.
"For years, we've been hearing property owners say they'd like to do it but can't afford to make investments into property," Tucker told the media.
Paul Larson is the first landlord to sign up for the program. He has started work on a new roof, new windows, doors, rebuilding the front porch and repainting the outside of a two-story home. The cost of his project is $15,000.
"I'm not a big debt guy, although in this particular case, this, compared to a standard mortgage or a second mortgage, this is a very good deal," he said. "Plus, I could do a variety of projects at the same time and get it all done quickly."
Larson said he would fix up two more houses if the city decided to expand the program.
Vintage Apartments owner Rod Schmidt estimates half of the rentals in Pettigrew Heights need restoration or repair. He already fixed up the one building he owns in the neighborhood, and he hopes that others take advantage of the program.
"It's a wonderful return on your money," he said. "I think it will help enhance the curb appeal of the place."
The city has received four applications so far. Kathryn Henning, spokeswoman for the Pettigrew Heights Neighborhood Association, said she believes the program will have a snowball effect when people see that their neighbors are improving their homes.
"If all of a sudden your house is the only one that needs to be cleaned up, it will get everyone in gear," she said.