In most of Spearfish, buying a home starts with a lender. The preapproval sets your ceiling, and you shop below it. Sky Ridge, the workforce-housing subdivision off Colorado Boulevard near I-90 Exit 17, adds a step before that. Your household income can decide which homes you are allowed to buy, and a South Dakota Housing table decides the highest price each home can be listed at.
Both limits come from the same source. The tier price caps are percentages of South Dakota Housing's first-time homebuyer purchase price limit, and the buyer income limits proposed in the city's 2025 agreement update are percentages of that program's income limits. When South Dakota Housing updates its tables, Sky Ridge's price caps and income limits change with them, and that changes how you should approach a purchase here.
Your income picks the tier
Hills View Homes builds Sky Ridge homes in three tiers. In its report on the city's amended agreement with the builder, the Black Hills Pioneer laid out each tier's minimum size and maximum original sale price, measured against the first-time homebuyer purchase price limit for new construction. That limit is currently $410,000.
| Tier | Minimum finished living space | Garage and parking | Maximum original sale price | Reported current cap |
|---|---|---|---|---|
| Tier 1 | 800 sq ft, garage excluded | 1-stall garage, 2 driveway spaces | 70% of the state limit | $297,000 |
| Tier 2 | 1,000 sq ft | 2-stall garage | 85% of the state limit | $348,500 |
| Tier 3 | 1,200 sq ft, unfinished basement allowed | 2-stall garage | 100% of the state limit | $410,000 |
Ahead of the April 2025 vote on the restated agreement, the City of Spearfish published proposed income limits for each tier. Tier 3 buyers would be at or below 150% of South Dakota Housing's "Maximum Family Income by Family Size," Tier 2 buyers at or below 130%, and Tier 1 buyers at or below 110%. That reverses how a normal market works. The smallest, lowest-priced homes have the tightest income limit, and a household that earns more may only qualify for the larger, higher-priced tiers.
South Dakota Housing's current income limits, effective May 30, 2026, don't list Lawrence County separately, so it falls under "All other Counties." That figure is $103,400 for households of two or fewer and $118,910 for households of three or more. If the city's proposed percentages apply to those limits, the income ceilings work out roughly like this:
- Tier 1, at 110%: about $113,740 for two or fewer, about $130,801 for three or more
- Tier 2, at 130%: about $134,420 for two or fewer, about $154,583 for three or more
- Tier 3, at 150%: about $155,100 for two or fewer, about $178,365 for three or more
These numbers are arithmetic on the proposed percentages. They are not a published eligibility chart. The city's 2025 notice described them as proposed changes, so ask Hills View Homes to confirm the criteria in force on the day you apply.
The cap moves when the state's number moves
A Sky Ridge price cap is set against the state limit "at the time of the home's original listing for sale," according to the Black Hills Pioneer. The caps shift when that limit shifts, and they already have.
In February 2025, the city's notice gave the first-time homebuyer purchase price limit as $385,000 and the base South Dakota Housing income limit as $95,100 for households of two or fewer. South Dakota Housing's current table lists a $410,000 purchase price limit for new construction, effective April 30, 2025, along with the higher May 2026 income limits above. Under the same percentages, the Tier 3 cap rose by $25,000 and the income ceilings rose with it. No one renegotiated anything in Spearfish.
This has a practical effect on timing. A home listed after the state raises its limit can carry a higher cap than an identical home listed before the change. When you compare two Sky Ridge homes listed months apart, check which limit each one was priced against.
One figure is also worth confirming. The Pioneer reports the current Tier 1 maximum as $297,000, but 70% of $410,000 is $287,000. For a buyer looking at a Tier 1 home, that $10,000 gap matters, so ask the builder which number applies to the home you're considering.
Who covers the difference
A home can sell below market here because the expensive parts of a subdivision were paid for in advance. Sky Ridge sits in Tax Increment Finance District 6, which the City Council created on September 18, 2020. In the Black Hills Pioneer, Spearfish Finance Officer Michelle DeNeui described it as "a city-funded development," with $17.8 million in planned costs for water, sewer and dry utilities serving 150 affordable home lots.
The district's growth is real. DeNeui told the Pioneer the parcel's taxable valuation was $84,000 when the district was created and just over $14 million at the end of 2025. Tax increment payments back to the city have totaled about $5 million, and the district matures in 2040. Her assessment was direct: "At this point in time, I don't believe this TIF district is going to pay the full $17 million off." That debt also covered the Keating Resources Sports Complex.
The city recovers part of its investment through lot sales. Hills View pays $21,800 per lot under its agreement. Some ground has cost more to build on than expected. In late 2025, the city transferred 12 lots to Hills View for a total of $222,000, with reduced prices of $18,200 for some lots and $20,000 for certain lots on Centauri Avenue and in Blocks 5 and 6, to offset excavation and grading costs. Those discounts went to the builder. The home price caps stayed the same.
For anyone with a construction background, the takeaway is simple. The price ceiling is fixed by formula, so lot conditions, grading and finish levels affect what fits under the cap. They don't change the cap itself. Comparing floor plans, foundation types and garage sizes within the same tier is where your choices actually matter.
What the October vote says about pace
The biggest risk in any subdivision built over several years is a stall, and Sky Ridge has had one. City Administrator Bobby Falcon described production delays with the developer in 2024, and the city then worked out an arrangement for Hills View to restart the project in early 2025. Hills View, previously a subcontractor to Dream Design International, took over the development agreement that year.
The record since then points the other way. In 2025, Hills View sold 48 homes at Sky Ridge, closed on 31 and scheduled starts on 59 more. It is now aiming for 178 homes, up from the original plan of 150. In early October 2026, the City Council voted unanimously to lower the builder's financial assurance from $600,000 to $450,000, according to KDSJ. City Administrator Peter Wysocki told the council that Hills View "has been in full compliance with the development agreement" and has been buying lots as required.
A financial assurance is the bond or letter of credit that guarantees the builder finishes its contracted work. Lowering it means the city sees less risk of the project being left unfinished. For a buyer, that is a reasonable sign that the streets around a new home are more likely to be built out than left as empty lots for years.
More construction is planned next door. The City Council approved a preliminary plat for East Side Acres, a 40-acre, 50-lot development west of Sky Ridge at 6025 E. Colorado Boulevard. It is planned in three phases, with single-family and multifamily homes, commercial or office space, and a road meant to connect south to Vega Street eventually. A Sky Ridge buyer near that edge should expect construction activity nearby for a while.
What to confirm before you make an offer
Because a contract and city agreement shape so much of a Sky Ridge purchase, a few questions belong at the start:
- Which income criteria apply today? Ask how household income is counted, which household-size limit applies to you, and which percentage applies to each tier.
- Which state limit was this home priced against? Confirm the listing date and the cap for that tier, especially for Tier 1.
- What do the covenants say about rentals and resale? Earlier Black Hills Pioneer reporting, from before Hills View took over, said covenants prohibited rentals and that profits from a sale within two years would go to the city. Get the recorded covenants for your specific lot and read the current terms.
- Are you also using South Dakota Housing's financing? The Sky Ridge price caps reference the First-Time Homebuyer program, but the program has its own requirements, including not having owned a home in the past three years, with stated exceptions. Qualifying for one doesn't automatically qualify you for the other.
The city's notice lists Hills View Homes at (605) 210-5538 for buyer questions. This post is general information about how Sky Ridge is structured. It isn't legal, tax or financial advice, so please confirm your own eligibility and contract terms with the builder, your lender and an attorney.
If a Sky Ridge home might fit your budget, Michaela Anderson can help you compare the three tiers side by side, gather the covenant and eligibility questions before you sign, and weigh a capped-price new build against other homes and lots around Spearfish. Let's Connect.
