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Local builder warns council that large volumes of subsidized housing could depress home values
Summary
Jeremy Jensen, a local homebuilder, told the council that plans for dozens of subsidized entry-level homes could reduce comparable sales values, complicate refinancing and raise rental costs; he urged the council to weigh market impacts when approving development incentives.
Mitchell — Jeremy Jensen, a local builder who said he builds about 50 homes annually in South Dakota, urged the council to consider unintended market effects from large-scale subsidized housing projects.
Jensen told the council that homeownership relies on a multi-stage market where buyers move from entry-level to higher-priced homes, and he said that a surge in heavily subsidized entry-level units could interrupt that progression. "With the amount of subsidized housing that has been projected lately, I think it's just some concerns that we should talk about," Jensen said, arguing that the arrival of dozens of low-cost new homes could lower comparable sales prices and affect appraisals for existing homeowners.
He illustrated the concern with an example: if older, remodeled homes that would otherwise sell for $300,000 compete against many new subsidized homes priced substantially lower, appraised values and loan refinance outcomes could be affected, potentially leading to higher costs for homeowners and landlords on loan renewal. Jensen also said Mitchell currently had a sizable inventory of homes on the market and questioned whether adding large numbers of subsidized units (he cited hypothetical developments of 50–80 homes) would solve perceived housing issues or instead reduce home valuations.
Councilors did not take immediate action on the points raised but acknowledged the issues for future planning and policy deliberations. The mayor closed the meeting following Jensen's remarks.
