How a 120-year-old barn became the 100th house moved to support preservation

Roger and Kelly Osterholt never intended to move from their house near the South Dakota Veterans Cemetery in Minnehaha County. They were happy where they were.

But after they drove by the 120-year-old barn-turned-house near Valley Springs, the Osterholts couldn’t forget about it.

“We have always admired that style of house, and we thought this would be such a cool house to have,” Roger Osterholt said.

Two months later, when they saw the barn house go on the market, he said, “We couldn’t help ourselves.” The couple attended a viewing of the barn house, and “everything kind of snowballed from there. We ended up putting a bid on it and ended up getting the bid. It was one of those things where you just kick yourself if you don’t try.”

The Osterholts, who moved into the barn house about two months ago, have a distinction beyond an unusual dwelling. Their purchase of the house marks the 100th sale of a house through the South Eastern Development Foundation’s recycled and rehabilitated houses program.

“Recycled homes are homes that would otherwise be torn down,” said Lynn Keller Forbes. “They are donated to the South Eastern Development Foundation, who then relocates and renovates these homes for resale at market rate. Rehab homes are homes that need some TLC. The South Eastern Development Foundation purchases these homes and renovates them to bring life back to the home and community.”

Keller Forbes is CEO and president of SEDF and of the South Eastern Council of Governments, which provides staffing for the foundation, along with Dakota Business Finance.

The program started in 2015 as a nonprofit developer of Governor’s Houses being built by prisoners in Springfield. SEDF acquires the land for the inmate-built houses, builds a basement and adds a garage when the house is moved onto the property. The houses then are sold to people interested in affordable housing.

The program expanded when the city of Sioux Falls offered houses that needed to be moved, and since then, other donors have included the Sioux Falls School District, Sanford Health and Augustana University, along with private individuals.

“Individuals will call us — ‘I’m buying a property that has a house on it, and I want to buy a new one,’ so they donate it to us,” Keller Forbes said.

That was the situation with the barn house, then owned by Patrick and Jessica Deering. The 1900-era barn had been converted into a house in the 1970s and sat on 17 acres. When the Deerings bought it in 2017, it had retained that style with shag carpet, saloon doors and a pink bathtub and sink. Undaunted, the couple renovated it completely, making a home for their family, which includes two daughters and several horses.

In 2020, foundation issues developed, however. The Deerings decided to build a new home on their 17 acres but, conscious of the old house’s history, didn’t want to tear it down or burn it.

“It was so unique, and people had put so much work into it,” Jessica Deering said. “Everybody in the area, we’d tell them we’ve got the old barn house, and they’d know what we were talking about it. We didn’t want to … wreck its history.”

Deering had seen a news story on a Facebook page about SEDF’s housing program, and she contacted the agency. After the house was inspected, SEDF agreed to take it on.

“It was the best situation for a bad deal,” she said. “We tried to do the best we could with the cards we were handed.”

The Deerings were settled in their new home when the barn house was moved from about 1 mile west of Valley Springs to Renner — a 20-minute trip if you’re not moving a house. They toured their old residence after it was placed on a new basement.

“It was a good experience,” Deering said of the process. “I would say if you have a house that you want to donate, they’d be a good one to donate it to and be able to pass it on to somebody else. I’m glad we could pass it on and keep the history going.”

Added Keller Forbes: “There’s a lot of memories in those houses. Some we moved, the people had lived there for 40-some years. They were so happy they were not being torn down.”

The recycle-rehab program has made a big difference to many individuals, couples and families with children. For children, homeownership on their parents’ part can mean stability. For some adults, it’s the first time they’ve ever owned a home. The program has helped first-time homebuyers who just graduated from college all the way up to people who are retirement age but have always rented.

“It’s rewarding to look back and see the difference made in these families and lives,” Keller Forbes said.

Since the Osterholts purchased the barn house, SEDF has sold three to five more houses with four currently listed and two more that are close to that status. Each year, 15 to 20 houses are ready for public sales. While traditionally, SEDF has placed houses within the Sioux Falls city limits, it also has moved or rehabilitated houses in Beresford and Lincoln County.

SEDF plans to place nine Governor’s Houses in Sioux Falls and one in Beresford this year. Six recycled houses will be moved this year. Two were near Lincoln High School with four more near the Good Samaritan Society center on North Minnesota Avenue.

“We buy the ugliest house on the block and fix it up, and it’s amazing when we come into a neighborhood and make an improvement,” Keller Forbes said.

An example of that is in the 12th Street and Wayland Avenue neighborhood. SEDF purchased five houses. Two were rehabbed and three torn down, replaced by a trio of houses donated by the city of Sioux Falls.

“We do a lot of work on-site before we moved them, so when they’re dropped down, it won’t take as long to finish them up,” Keller Forbes said.

The issue facing SEDF currently is interest rates, which make it difficult for first-time homebuyers and loan qualifiers, she said. The cost of moving a house from one lot to another also has increased as has the price of vacant lots.

It’s worth it, Keller Forbes said. She is grateful to the board that supported her when she initially suggested this.

“When I brought it up about serving as a nonprofit developer, they said, ‘We don’t know why you want to do this, but we’re going to enable you to do it,’” she recalled. “There’s not a ton of money to be made on it, and larger developers won’t do it. But we don’t need to make some of the same margins as private developers. I’ve got six guys on my construction crew, and a couple of them own Governor’s Houses now.”

The first house was sold in September 2014 to Zenia Gutierrez, a first-time homebuyer who moved to South Walts Avenue. Ninety-nine houses later, Roger and Kelly Osterholt have moved in. The only big project left undone is finishing the basement, and they plan to take their time on completing that work.

Thrilled to own a barn built in the Gothic art style, they have proudly showed it off to their neighbors.

“A lot of the features are really unique, and it’s something you could only dream of most of the time. We were blessed to be able to buy this house,” Kelly Osterholt said. “Knowing that they did the project with apprentice carpenters, that they’ve learned how to renovate a house, is very interesting.”

Without the work put in by SEDF, the Osterholts are unsure they ever would have been able to live in their dream house. “It definitely benefits all parties involved,” Roger Osterholt said.