SIOUX FALLS, SD (KELO) – A billion dollars in building permit values are likely for 2022, said Butch Warrington, the building official for the city of Sioux Falls.
“I think we’ll be over a billion in the next two months,” Warrington said. This won’t be the first year that Sioux Falls has reached this level.
The city cracked $1 billion in building permit values last year.
“It’s going to be a good year,” Warrington said of 2022
It’s been a good six months already. The city issued about 400 more permits at the end of June compared to the same period in 2021.
The total value of permits is almost double from 2021 to the end of June. The city recorded $868,537,859 in building permit values compared to the end of June in 2021 when $492,205,460 was recorded.
More projects, bigger projects and even an increase in the cost of materials are the reasons for the increase in value.
Warrington said contractors do not specify in permit applications whether or not material and other costs have increased. However, “I hear it from entrepreneurs. I know it’s there,” Warrington said.
Forbes said the average cost of a newly built home in South Dakota was $204,420. This cost price does not include basements, garages, land and similar items.
The bill for materials needed to build a new mid-size single-family home rose 42% from 2018 to 202, according to MarketWatch.
The Bureau of Labor Statistics reported in June that high prices for building materials remained high in May after an overall increase of about 21% in 2021.
Sioux Falls is seeing the strongest growth in apartment values, but there were no apartment building permits in June, Warrington said.
“It’s (a stroke of luck). That’s just how it went,” Warrington said.
Even without any apartment building permits in June, the value reached $226 million in the first six months of 2022. The value was $114 million for the same period in 2021.
Warrington is confident in the $1 billion forecast as several large construction projects are still planned for 2022.
A parking ramp project at Sioux Falls Regional Airport still needs a permit and the project is expected to be valued between $40 million and $50 million, Warrington said.
Other high-value projects include an ice hockey arena at Augustana University and a parking ramp at Sanford Health, Warrington said.