Located about 120 miles from Sioux Falls, Chamberlain, South Dakota, is in the grips of a housing shortage. Building costs run higher here because materials need to be hauled in from distant cities — a common situation across Wyoming.
Fewer contractors work in the area and it’s more expensive to build in Chamberlain — population 2,502 — compared to Sioux Falls because subcontractors need to travel in.
It’s a place many visit for the walleye fishing and bird hunting outside of town, and it’s caught up in a statewide housing shortage.
The Dakota Institute reported that since 2016, the typical South Dakota home has skyrocketed by $170,085 — a staggering 80 percent surge, with single-family homes costing around $380,000.
Meanwhile, the U.S. Census Bureau estimates the typical South Dakota household earns about $72,000 a year.
Infrastructure Holdup
Pushing through these headwinds is Chamberlain, where seven new homes have risen in the city's Smokey Groves Addition since the city began giving away building lots for free.
Covenants set size standards, and the existing homes are mostly three-bedroom houses with two-car garages and a minimum of 1,500 square feet.
They are valued around $350,000, and Chamberlain really wants to give away more lots, so more homes get built.
This land giveaway is part of a municipal subdivision development project that began in 2018, according to the city of Chamberlain, when it spent around $900,000 to buy a 60-acre tract south of downtown and east of Interstate 90.
"The city invested by giving the lots away, so the tax base will get rolling faster," Sheena Larsen, told Cowboy State Daily.
Larsen is the executive director of the Lake Francis Case Development Corp., and she described the lot giveaway program as a way to, “Start building the tax base."
It is a novel approach, and it has hit a bit of a snag.
“We haven't given out any (lots) for probably close to two years trying to get the infrastructure done,” said Larsen. “And we've actually been running into issues with the contractor and engineer. So it's kind of been a struggle.”
There are interested buyers and builders waiting for 30 more residential lots to come available, which Larsen hopes will start happening by next spring when the building season ramps up.
"The lots all appraised, and the appraisals have run anywhere from like $11,000 to $15,000,” said Larsen.
Following Chamberlain's Lead
In addition to the 30 residential lots, the 60-acre Smokey Groves tract includes one multi-family lot for apartments and 11 commercial lots.
The city created a tax-increment financing district and invested about $2 million in taxpayer funds plus another $2 million in state and federal grants for infrastructure development, according to the city of Chamberlain.
The approach has attracted attention from neighboring communities, like Pukwana, where more than a dozen people in the town of 230 expressed interest in four free lots.
Chamberlain's program appears to have some of the same goals as a recent initiative in Pawnee City, Nebraska.
In 2024, Pawnee City announced it was awarded a $640,000 grant from the Nebraska Affordable Housing Trust Fund. And then last December, there was a groundbreaking ceremony for the first two homes in the Vision 2030 25-home initiative.
Now, Pawnee City is offering $50,000 to new residents who want to help revitalize the community — one famously known as the hometown of Larry the Cable Guy.
The $50,000 will bring down the sales price of newly constructed homes and remain attached to the property as a lien, so the savings can be passed on if the property is sold.
That’s not the case in South Dakota, where there are no restrictions for homeowners who receive a lot for free.
Wyoming's Approach
Wyoming has tried similar strategies to address rural housing challenges, though with different approaches than direct lot giveaways.
According to media reports from 2005, the town of Chugwater — then with a population of 244 — attempted to revitalize its struggling economy by selling empty lots for just $100.
The program required buyers to build a house within one year and live there for two years.
Then, the property was theirs.
More recently, Wyoming has focused on state-level funding mechanisms rather than individual municipal lot programs.
The Wyoming Community Development Authority's 2025 Affordable Housing Allocation Plan provides approximately $20.9 million in combined funding through a few main programs to support affordable housing development.
Developers can access funds through competitive application rounds, as candidates are scored across categories including quality of construction and project location.
In Chugwater, for a time, those $100 lots were a prime location. According to zillow.com, the current cost per acre in the Chugwater area is around $71,207.
Moving Forward
Larsen in Chamberlain hopes her city’s program helps some growing families find more room, while also making more starter homes available.
“If someone that has a starter home is ready to expand and get into a bigger, more expensive house, they would then build,” said Larsen. “They would be the ones building new and putting their house up for sale.”
David Madison can be reached at david@cowboystatedaily.com.
