What did growth in Sioux Falls look like in 2023?

Megan Raposa -

Simplified: The City of Sioux Falls is seeing growth normalize after a couple of years of "anomaly," officials said Friday morning. That said, 2023 brought over $1 billion in building permit valuation and more than 5,000 new residents.

Why it matters

  • The city surpassed $1 billion in building permits for the first time in 2021, and then nearly hit $2 billion in 2022. Construction leveled out more last year, with just over $1.1 billion in permits.
  • Mayor Paul TenHaken said he's trying to be realistic about projections for 2024, citing some "economic headwinds" like inflation and rising costs, as well as other outside forces like the upcoming presidential election that could influence the local economy. He said he'll be happy to see the city hit the billion dollar mark again.
  • On the population side of things, Sioux Falls added 5,007 new residents and now has more than 213,000 people – about a 2.4% increase over last year. Again, it's less of an increase than in the last couple of years – another indication growth may be leveling off after some particularly big years, TenHaken said.
“Our strong 2023 numbers are evidence of how great Sioux Falls is to live, work, play, start a business, and raise a family," TenHaken said.

Tell me more about the latest data

Last year saw significantly lower building permit valuation than 2022, but taking out that "anomaly" of a year, permits were up 75% from 2021.

A major contributor to Sioux Falls hitting over $1 billion last year was the nearly 20 projects that exceeded $10 million each in valuation. That includes:

  • The One2 Apartments downtown, valued at $35 million
  • Sanford Health Virtual Care Center at $27.8 million
  • BCP Sioux Falls at $25.7 million
  • Maguire Iron at $22.7 million
  • A new elementary school in the Sioux Falls School District at $21.9 million
  • Jacobson Plaza at $21.6 million
  • Spring Creek Apartments - Phase 2 at $21.3 million
  • Excel Energy addition and remodel at $20.4 million
  • Rolling Green Apartments at $18.5 million
  • USD Discovery District at $15.8 million.

On the housing side of things:

Sioux Falls saw the biggest decline in permits for new single-family homes. About 420 permits were issued last year, compared to 636 in 2022 and 850 in 2021.

  • Planning Director Jeff Eckhoff attributes that decline to fewer families choosing to build new homes due to inflation.

Overall, the city added 2,600 housing units last year, compared to about 4,400 the year prior.

  • All types of housing saw decline, including multifamily and townhomes.

What happens next?

TenHaken said he's expecting a "softer" year economically.

"What we’re going to keep doing is balancing the very low tax climate that we’re in, but also delivering the services of a community that’s growing at a record pace," he said.