Legislative committee endorses use of housing infrastructure fund for airport loans
by Joshua Haiar, South Dakota Searchlight
February 19, 2026
A South Dakota Senate committee advanced a pair of bills Thursday at the Capitol in Pierre that would expand a state housing infrastructure fund’s definition of infrastructure, and also allow some of the money to go toward large airport projects.
Both plans target the Housing Infrastructure Financing Program, which legislators and Gov. Larry Rhoden’s predecessor, Kristi Noem, created in 2023. They used a mix of state and federal money to create a $200 million fund.
Awards from the program cover up to a third of a developer’s cost for things like roads, water and sewer lines, and sidewalks. The fund has supported 85 projects statewide, helping to create 7,421 single-family housing lots and 5,754 apartment or other multi-family units.
Half of the fund went out as grants. About $65 million remained from the other half of the fund as of late last year, devoted to loans.
In October, Rhoden proposed moving the $65 million from the housing infrastructure fund to the state’s Revolving Economic Development and Initiative Fund, known as the REDI Fund, which offers low-interest loans to startup firms, businesses that are expanding or relocating, and local economic development corporations. He also proposed using $30 million of that transferred money to offer interest-free loans of up to $15 million each for expansion projects at the Sioux Falls and Rapid City airports.
Legislators and governor make competing proposals to take money from housing fund
Rather than that plan, the Senate Commerce and Energy Committee endorsed an amended version of the legislation proposed by Sen. Casey Crabtree, R-Madison. Instead of transferring the money to the REDI Fund, it would allow the housing infrastructure fund to make loans to airports in metropolitan areas with a population of at least 125,000.
The loans would have to be used to improve or maintain airport infrastructure and would be capped at $15 million per recipient. They would carry 0% interest and 20-year repayment periods.
Rhoden’s commissioner of economic development spoke in favor of the plan, saying the move made sense since airports are infrastructure, and it advanced 8-0.
“Airport and airport development, regardless of where it is, in any community, in any state, is incredibly important, not only for the citizens, but also for the businesses that are operating in our state,” Governor’s Office of Economic Development Commissioner Bill Even said.
The committee also advanced another housing infrastructure fund bill sponsored by Crabtree on a 7-1 vote. That bill would expand the fund’s eligible “public infrastructure” project expenses to include “necessary site work.”
“The single greatest barrier to new housing development is not demand, it’s infrastructure,” said South Dakota Municipal League Director Sara Rankin.
The bill would also increase the maximum loan size from one-third to one-half of a project’s total cost.
Supporters from local development and housing groups told lawmakers the changes would help communities close infrastructure funding gaps that can stall housing development, particularly in smaller towns where projects can be harder to finance.
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South Dakota Searchlight is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. South Dakota Searchlight maintains editorial independence. Contact Editor Seth Tupper for questions: info@southdakotasearchlight.com.
