A ROOF OVER YOUR HEAD

	December 1, 1999
	Fred de Sam Lazaro of KCTA-St. Paul-Minneapolis reports on using the prison system to solve housing problems in South Dakota.

FRED DE SAM LAZARO: The hardest thing to find in South Dakota is people. At three quarters of a million, the entire population is that of an average U.S. city, except here they're spread across 300 small towns, which continue to wither due to a changing farm economy, according to Governor Bill Janklow. GOV. BILL JANKLOW, South Dakota: South Dakota in 1972 had 185,000 K-12 kids. Today we have 131,000. We have lost 50,000 kids, K-12. FRED DE SAM LAZARO: Armour is a typical small South Dakota town struggling to hang on to its 854 residents. Communities like these could be attractive to growing families raising children, but housing is a huge problem. There's not much available. At the same time, Janklow said many elderly residents are rattling around in homes they no longer need. GOV. BILL JANKLOW: They had a lot of children, they had a lot of bedrooms, different floors, big yards. They can't care for that stuff anymore. And they'll move to another bigger community that has elderly facilities, and it helps kill the town. FRED DE SAM LAZARO: In an ideal world, Janklow said smaller homes would be available right in town for retirees. That would free up some larger homes for young families. So the governor decided to build a small home factory in Springfield, South Dakota. Springfield's attraction? An abundant supply of low-cost laborers, all in fact residing at the same, somewhat confining address. Inmates at the medium-security Mike Durfee State Prison produce about 100 of these modular homes each year. They come in two sizes: 800 And 1,200 square feet. Over the past three years, about 400 of them have been trucked out and cranked onto foundations across the state. The pay for Donald Mallow and about 90 fellow inmates is even more modest than the homes they build-- 25 cents an hour. DONALD MALLOW, Inmate: We make top $40 a month, okay? And 40 bucks a month, that barely buys your shampoo and your necessity, your health items. And that's it. You know, you can't save any money here. FRED DE SAM LAZARO: Construction supervisor Steve Maruska says the real savings go to those who are eligible to buy the homes, people 62 or older, or disabled. STEVE MARUSKA: This is a 1,200 square-foot house, the one that we're in right now, and that's just under $30,000, I think. FRED DE SAM LAZARO: $30,000, Delivered to any lot? STEVE MARUSKA: Delivered to any lot within the state. FRED DE SAM LAZARO: It was a deal that allowed Janice and Lyle Dierks to remain in Armour where the recently retired couple have spent their entire lives. JANICE DIERKS, Homeowner: We weren't about to stick a whole lot of money into a home at our age, and we both had health problems. We didn't see, you know, getting anything too elaborate. SPENCER MICHELS: The size and price of their new place was perfect, the Dierks say, and that's echoed by the family that purchased their old place down the street. BETH ADAMS, Homeowner: They priced this home reasonable so it would sell, and so that somebody like us, you know, a family, could afford to buy it, you know? So we were very fortunate. MIKE ADAMS: I think they had their "for sale" sign in the yard one day and then... BETH ADAMS: Yeah, and then we came in. FRED DE SAM LAZARO: Mike and Beth Adams spent two years looking for a home in the area where she works in a nursing home office. He is a highway patrolman. BETH ADAMS: It has four bedrooms, which we like, because we have a boy and a girl. They each have their own and we have ours and then we have a guest room that we can put company into. FRED DE SAM LAZARO: By putting down roots, families like the Adams, with two young children, put money into the bank of Armour's financially strapped school district. State education dollars are based on a head count, says Superintendent Wally Weatherford. WALLY WEATHERFORD, Armour School Superintendent: It's vital to us that we have young families that have their children going to school in Armour. And, you know, with the governor's housing program, it's a great idea, a great plan. It does help open up some housing. FRED DE SAM LAZARO: It also opened up a big row will private contractors who say the prison program has cost them jobs. Kurt Hanson of South Dakota's Builders Association says there's no way to compete with 25 cents an hour. KURT HANSON: There's lots of good things that people need, but when you develop a social welfare program, there are costs. And some of those costs are that unfair competition with the private sector, which costs people jobs. And when you lose those jobs that are very few to start with in those small towns, we're going to impact negatively on that population growth in those towns in that way. So we're paying, you know, robbing Peter to pay Paul here. FRED DE SAM LAZARO: Governor Janklow calls the contractors' criticism hypocritical since they've long benefited from government- sponsored loan programs. GOV. BILL JANKLOW: I found it ironic when I met with them, and I so told them. I said, "never have I heard from you people that you object to us competing with the banks and the savings and loans, offering loan rates that are less than banks and savings and loans to buy the houses you people are building. GOV. BILL JANKLOW: Now, can you get from your chair into the other chair? ROD TAYLOR: Yeah. GOV. BILL JANKLOW: You can? And then you run your TV? ROD TAYLOR: Yeah. FRED DE SAM LAZARO: Janklow says most buyers in the prison housing program, like Rod Taylor, have modest incomes and could not afford the typical privately built home. But Mike Kauffenberg says his home-building company has lost business to the state. MIKE KAUFENBERG, Building Contractor: There's one house right near Madison that we know we lost because we priced it out specifically for this customer, and he opted for the governor's house. And of course, like I said, we don't know how many we didn't get because we don't know how many customers never call us. KURT HANSON: If we could limit this program to people that were not being served by the private sector, right now you could be a multimillionaire making $100,000 a year. You can live in the house as a primary residence and in two weeks sell it and pocket a tidy profit. FRED DE SAM LAZARO: Governor Janklow says he will fine-tune the program to prevent abuses, but he also plans to expand it. Low-income people need homes, and prison inmates need job skills, he said. GOV. BILL JANKLOW: When people work a full eight-hour shift a day, forty hours a week or so or more, they don't have time for crime. (Hammering) FRED DE SAM LAZARO: Inmate apprentices we spoke with complained about the low wage, but each of them readily volunteered for this detail, hoping it would some day launch productive careers. JAMES BASHAM, Inmate: I'm originally from out west. Out there stuff like this pays really good, so the more experience, the more money you'll make. So do this for a year or two years, you get out on the outside, you'll be set with a good-paying job. ANDY GRAF, Inmate: Before I came in here, I just split up with my wife, and just working at a burger stand because I didn't know much of anything else, and needed some more cash and I went out and robbed a bar and came in here. And now I'm trying to better myself and hopefully this out here will top it off. And when I get out, I'll stay out of trouble, you know? FRED DE SAM LAZARO: It's not certain yet whether the prison training will help inmates launch successful futures. Many we talked to had complications with chemical dependency. Also, there are few alumni so far from the three-year program. Nonetheless, Janklow plans to double the output of these so- called governor's homes before his own term ends in 2002.

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