SPEARFISH | The City of Spearfish has entered into an agreement with Dream Design International and developer Hani Shafai of Rapid City to build between 140 and 150 affordably priced homes in a new development east of Spearfish.
“The city has identified a need for affordable housing,” Spearfish city administrator Mike Harmon said.
Harmon said in 2013 the city completed a study with other community partners that identified the need to complete about 20 new affordable homes each year.
The city requested proposals for housing last year and chose Dream Design International’s proposal from three submissions received.
The development is to be located on about 156 acres of land off Interstate 90 Exit 17, west of the Elkhorn Ridge Campground and south of the travel plaza.
The Dream Design proposal calls for homes ranging from $175,000 to $275,000, with 80 percent of the homes to be priced under $225,000. The remaining 20 percent will meet the state’s first-time home buyer’s price limit of $275,000.
“Our goal is to really keep this project affordable,” Harmon said. “One of the key components of Dream Design’s proposal is keeping 80 percent of the homes under $225,000.”
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Terms of the design agreement still remain to be set, Harmon said.
A proposal before the Spearfish City Council at its upcoming meeting on Tuesday would restrict purchase of the homes to individuals or couples in certain income tax bracket -- meaning potential buyers with incomes ranging from $78,950 to $168,400 -- based on income for married taxpayers, filing jointly.
“Once the construction is complete, if someone in those two tax brackets has not entered into a purchase agreement for the home, we’ll open up the purchase to anyone,” Harmon said.
Once the final design agreement is complete, Harmon expects hopes to begin design in mid-March, and let bids for initial site work and utility installation in mid- to late summer
“It is our goal that home construction begins in late spring and early summer of next year,” he said.
The concept for the new development also could include green space and sports complex amenities, including a mountain bike park and soccer and softball fields, to solve the need for more sports complex space as well as housing.
Harmon said he hopes the project, to be completed over the next five years, will be only the first to alleviate what he calls a “pent-up demand” for affordable homes.
“We hope this is phase one, with additional phases set to come in the future,” he said.