Development in Rapid City slows from record year

RAPID CITY, S.D. (KOTA) – Development in Rapid City has slipped from a record 2023 year.

The city issued 2,593 permits last year, valued at roughly $384 million. In 2023, more than $463 million worth of permits went out.

Officials say the $56.2 million permit approved for the Block5 facility in 2023 was a factor in the year having a healthy lead over 2024. Another setback for any hopes of at least tying the record from 2023 was the continued drop of single-family home permits last year.

“Mortgage interest rates are, you know, on the rise again, so that’s obviously going to affect the single-family homes,” Jasmine Berg, a building permit tech for Rapid City, said, “People are gravitating more towards apartments, they’re choosing to stay in the home that they have and remodel it … our permits there were one of the highest on record.”

Last year, 119 single-family home permits were approved, a drop from 133 permits in 2023. The city has had consecutive year-over-year declines in single-family home permits since 2021, when 263 permits were issued.

“I would really like to see that single-family number go up, back up to where it was five years ago, really that boom year. But you can only wait and see,” Berg added.

She noted that single-family home permits have slowed nationwide.

Despite the year-over-year drop, 2024 was still the city’s third-highest year for development on record. In fact, December was an especially active month for the city, with officials signing off on 162 permits valued at $21.5 million. The largest of those permits, which is valued at more than $6.6 million, is for the development of a U-Haul multistory building on Stumer Road in South Rapid City.

Eight of the 10 highest-valued permits approved last year were from apartment complexes. The city approved 27 apartment building projects last year, which Berg notes is a high number.

The city set a notable record for the number of new storage buildings last year. 19 storage unit buildings were approved, representing more than 730 individual units.

The largest permit to be signed off on was the near $29 million expansion approved for the Rapid City Regional Airport.

“It was a very busy and active year for building in the Rapid City community,” City Community Development Director Vicki Fisher said. “We knew it would be a challenge to reach the permit valuation level of 2023, but any time you are approaching the shadows of $400 million in valuation, it’s a good year. We’ll take it,” Fisher said.

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