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With 289 new units, demand for Mitchell housing still high

Pictured is Edgerton Place, a new three-story, 65-unit apartment building located south of County Fair Food Store in western Mitchell. (Sean Ryan/Republic)

After living in the dorms at Dakota Wesleyan University, Taylor Kinyon had no trouble finding her own place in Mitchell.

That's notable, when less than two years ago a study identified an overwhelming need for more housing in Mitchell and found the vacancy rate among all of the existing apartments in the city at the time was a measly 1 percent.

Kinyon, a 20-year-old nursing student, moved into a one-bedroom apartment last week at Edgerton Place, a new three-story, 65-unit apartment building located south of County Fair Food Store in western Mitchell.

"I know it's really hard to get a nice one-bedroom apartment," Kinyon, a 2012 Plankinton High School graduate, said earlier this week. "I wanted to live by myself, so this was the most obvious choice."

Edgerton Place opened in late March and has a combination of one- and two-bedroom apartments. Already, 23 of the 65 apartments have been leased and a few renters have moved in, according to John Clarke, one of the building's owners.

Clarke, also president of County Fair Food Stores, is one of a handful of developers who have acted on the apparent housing shortage. Since the study, six Mitchell projects, either recently completed or still under construction, will add a total of 289 apartments or townhomes, with the potential for hundreds more to be added if those fill up.

In total, the cost of all six projects is approximately $16.9 million, according to the city's building permit records. The estimated cost listed on a building permit includes only the cost of the structure, which means the estimate is lower than the actual cost of the project.

"Is overbuilding a possibility? Yes. But so is under-building," said Bryan Hisel, executive director of the Mitchell Area Development Corporation and the Mitchell Area Chamber of Commerce.

Though less than half the apartments at Edgerton Place are occupied at the moment, Clarke said he isn't worried about finding renters.

"It's a process," Clarke said. "You can't open a building this large and have it full the first month."

A sense of urgency remains among those looking for a place to live in the city, even with more options coming on the market.

"I knew that I had to get into somewhere now rather than later," Kinyon said. "I would have been worried if I didn't find this place."

The monthly rent at Edgerton Place, between $610 and $825, is slightly higher than average for the existing one- and two-bedroom apartments in Mitchell, which is $460 and $710, according to the housing study.

"It's definitely on the higher side for Mitchell, but I think it's pretty fair," Kinyon said, referring to the monthly rent.

The slightly higher monthly rents are the result of the often exorbitant costs involved in the construction of new apartment buildings, according to Hisel. MADC funded the housing study along with several area partners in response to a shortage of rental housing in Mitchell that became apparent in the last several years. Before the study, developers questioned whether affordable apartments could be built given high costs of construction, Hisel said in an interview this week with The Daily Republic.

"The new units cost more because they cost more to put up, so the monthly rents are higher," he said.

But even with millions of dollars already invested in new apartments across the city, developers are now considering plans to build more if demand stays high.

Building plans

If the first apartment building at Edgerton Place is successful, Clarke said another 65-unit building could be built nearby as early as next spring. The project was split into phases to allow developers to monitor the housing market and adjust their plans accordingly.

"You don't want to overbuild," he said. "That's not good for anybody."

Two of the other new projects -- South Point Village, located in southern Mitchell, and Pheasant Ridge Apartments, located in northwestern Mitchell -- could potentially have additional units built, given the right conditions.

Steve Boote, president of Eagle Construction in Sioux Falls, said construction of Pheasant Ridge, a 64-unit apartment building, will be completed later this spring. If it fills up, Boote said a second apartment building could be built at the site.

"We would need to be full, or close to full," Boote said. "Our goal in any project is to hit 95 percent (occupancy)."

Already, Boote said, there has been interest from potential renters, even though the building is still under construction. Boote, like Clarke at Edgerton Place, said he isn't concerned about finding renters.

"We wouldn't have built it if we were worried," Boote said.

New apartments attract renters looking for a place to live, but also those looking to upgrade from older apartments, Boote said.

"I think it almost becomes a lifestyle choice," he said. "You get some occupancy from people that choose to have the newer lifestyle."

Construction at South Point Village, a 52-unit townhome development, was completed in November and, with the exception of one three-bedroom unit coming available in the near future, has no vacancies.

Eventually, as many as 273 units could be built at South Point Village, along with an outdoor swimming pool and community clubhouse.

The renovation of Whittier Lofts, a former school building being turned into apartments and offices, is nearly complete, according to Brad Ciavarella, a local architect and investor in the project.

Originally planned to have 19 loft-style apartments, Ciavarella said one more unit was recently added to the plan.

Of the 16 finished apartments at Whittier Lofts, all but two are occupied, Ciavarella said, adding that renters are already lined up for the other units under construction.

"We've advertised once, but other than that word of mouth has kept us full," he said.

At Mitchell Technical Institute, construction of a new 57-unit apartment building for students was completed last summer, according to Julie Brookbank, MTI's director of marketing and communications. That adds to another 45-unit student apartment building located near the school's campus in southern Mitchell.

The apartments are owned by Puetz Development on land leased by the MTI Foundation.

"I think it has just been one more piece of the campus' development that has greatly benefitted the school," Brookbank said.

Elsewhere, the first eight townhomes are expected to be completed by mid-June for another development near Mitchell Middle School, where 31 townhomes are expected to be built before the end of the summer, according to Tammy Frost, executive director of the Mitchell Housing Authority.

The project is being done by Antach Management Corporation, a developer based in Madison, Wis.

It will include a combination of one-story, handicapped-accessible, cottage-style townhomes and two-story townhomes. Rent for some of the units will be set at the market rate, but the majority will be based on the renter's income, Frost said.


With the potential for hundreds of additional apartments to be built in the city, developers will need be cautious not to build more units than necessary, Clarke said.

"Everybody has plans for more units, but they make those decisions based on the market and the community," he said. "Nobody sets that in stone until they're ready to turn dirt."

Hisel, the development official, said the risk of overbuilding is a risk worth taking given the consequences that come with not having enough housing.

"It absolutely stymies the growth in the community and the employment potential," Hisel said.

Since 2009, Mitchell has added as many as 1,120 jobs, when the city's total employment fell as low as 8,010 and the unemployment rate peaked at 7.4 percent, according to the South Dakota Department of Labor and Regulation. In July, the city's job count reached 9,135 and the total available labor force reached 9,410, the highest totals since at least 2006, when the department began tracking statistics at the city level.

"From what we can tell, we are at record workforce numbers," Hisel said.

The city's total employment fluctuates from summer to winter, as the number of seasonal jobs in the tourism and construction industries start to vanish.

The city's total labor force was 8,760 in February, the last month for which data is available. That's 315 more jobs than in February 2013.

If the city's workforce continues to grow at this pace, Hisel said the need for more housing will remain and the risk of overbuilding will be reduced.

"People that are employed need a place to live," he said. "I really think that we're at a point where we may be adding more (housing) if these growth opportunities continue in our business environment."