Rapid City rental demand rests on four pillars: a growing population, a large health care employer, a tourism economy built around the Black Hills, and, above all, the expansion of Ellsworth Air Force Base as it becomes the first home of the B-21 Raider bomber. The Air Force and local officials expect thousands of additional service members and family members over the next fifteen years, and much of that growth will look for housing in and around the city before the region has built enough of it.
This guide walks through what the official numbers say about each of those demand drivers, where the data is current and where it is dated, and what the picture means for people who own or are thinking about owning apartment buildings in western South Dakota’s largest city. Every figure below is attributed to the agency or organization that published it, with the year it applies to.
Rapid City rental demand in the Census numbers
Rapid City is the county seat of Pennington County and the anchor of a three-county metro area that HUD defines as Custer, Meade and Pennington counties. The U.S. Census Bureau’s QuickFacts profile for Rapid City shows 74,703 residents at the April 2020 Census and an estimated 80,589 as of July 1, 2025. That is growth of roughly 7.9% in a little over five years, a meaningful pace for a city of about 80,000 people.
The same profile shows how much of that population rents. The owner-occupied housing rate for 2020–2024 was 62.9%, which means a little more than a third of the city’s occupied homes are rented. QuickFacts counts 32,368 households with an average of 2.30 people each. For the same five-year period, median gross rent was $1,109 and median household income was $70,870, both in 2024 dollars. The median value of an owner-occupied home was $299,400.
Those numbers say something useful about the renter pool. A household earning the median income and paying the median rent spends a little under 19% of gross income on housing, which is a comfortable ratio by national standards. At the same time, a median home value near $300,000 puts ownership out of easy reach for many younger households, military families on short assignments and health care workers early in their careers. That combination of manageable rents and expensive entry into ownership tends to keep renters renting.
The county-level figures point the same way. Pennington County had an estimated 116,792 residents on July 1, 2025, up 6.9% from April 2020, with 46,370 households and an owner-occupied rate of 69.3%. Median gross rent countywide was $1,120. The higher ownership rate across the county as a whole reflects rural and suburban areas where single-family homes dominate; the city itself has the larger share of renters.
Ellsworth Air Force Base and the B-21 Raider
The single biggest change coming to the local rental market is at Ellsworth Air Force Base, which sits east of the city next to Box Elder. Air Force Global Strike Command announced that Ellsworth was officially selected as the first base to receive the B-21, hosting both the first operational squadron and the formal training unit. The command said it expected “an increase of about 1,600 Airmen” at the base.
The timeline has firmed up. In June 2026, Air & Space Forces Magazine reported Air Force Secretary Troy Meink saying the first aircraft would arrive at Ellsworth slightly ahead of the original schedule but still in 2027, and that it would be one of the two test aircraft then flying at Edwards Air Force Base in California.
The most detailed projection of what that means for population came in testimony to South Dakota lawmakers. At the October 24, 2024 meeting of the Legislature’s Select Committee on Legislative Relationships with Ellsworth Air Force Base, the 28th Bomb Wing commander, Col. Derek Oakley, described “a total estimated growth of 4,064 personnel (1,664 active military, 915 spouses, and 1,485 children) by fiscal year 2041,” according to the committee’s official minutes.
Why the base matters so much to renters
Military households rent at high rates. Assignments typically last a few years, junior enlisted members often arrive without the savings for a down payment, and many families prefer not to buy a home they may need to sell on short notice. Military housing allowances vary by duty location and are paid on a predictable schedule, which gives landlords a steady, verifiable income stream to underwrite against.
The scale of the base today is already significant. Ellsworth’s 2023 Economic Impact Statement lists about 3,100 active-duty members, about 1,000 civilian employees and about 5,000 dependents, with a payroll of $199.8 million and a total estimated economic impact of $799.3 million. The statement also estimates roughly 7,900 jobs created in the local economy. An increase of more than 4,000 people on top of that base is a large shift for a county of about 117,000 residents.
Where the newcomers are already landing
Not all of that demand will land in Rapid City. Box Elder, which borders the base, has been growing quickly. At the same 2024 legislative hearing, Box Elder officials reported that “more than 366 family lots and 461 multi-family units are currently under construction or completed.” The Douglas School District, which serves the base area, reported 2,816 K-12 students, of whom 1,041 were military-connected, and said it expected about 1,500 more military-connected students over the next fifteen years.
For Rapid City owners, that means the B-21 is both an opportunity and a source of competition. Families who want the shortest commute will look first at Box Elder and base housing. Those who want city services, shopping, particular schools or proximity to a spouse’s job at the hospital will look in Rapid City. New supply going up near the base will absorb part of the demand that would otherwise spill into the city’s existing apartment stock.
How much new housing the region says it needs
Elevate Rapid City, the area’s economic development organization, has tried to quantify the gap between expected growth and housing supply. Its CEO, Tom Johnson, told the same legislative committee in October 2024 that the organization projected “demand of 10,175 homes (2,410 in Rapid City, 7,765 in the region)” for 2025 through 2030. The minutes do not split that figure between rental and owner-occupied units, so it is best read as an overall housing target rather than an apartment forecast.
The projection builds on the 2022 Black Hills Regional Housing Study, which Elevate Rapid City commissioned from MSA Professional Services and updated with new data in 2025. The full study is available by request through Elevate Rapid City rather than as a public download.
Even without the study’s detail, the arithmetic is clear. If the city alone needs about 2,410 additional homes over six years, that is roughly 400 a year. QuickFacts lists 563 building permits for all of Pennington County in 2025, a count that covers new homes across the county, not only units inside Rapid City. Whether the region keeps up will depend on how much of the planned construction near the base and on the city’s edges actually gets built.
Health care, education and the wider jobs base
Ellsworth gets the headlines, but the region’s largest civilian employer is in health care. Monument Health describes itself as a system with “over 5,000 physicians and caregivers” across five hospitals and 40 clinics and specialty centers serving 14 communities. HUD’s February 2021 market profile listed Monument Health Rapid City Hospital as the metro area’s largest employer, with 4,983 workers, ahead of Ellsworth at 4,519 (including military) and Walmart at 1,029.
Health care workers are a strong renter segment. Nurses, technicians, residents and traveling clinicians often need housing close to the main hospital campus on short notice, and many are early in their careers. Their demand is less seasonal than tourism and less tied to federal budget decisions than the base.
The Bureau of Labor Statistics’ economy at a glance page for the Rapid City metro shows how the job base breaks down. In September 2026 the metro had about 77,900 nonfarm jobs, with education and health services the largest sector at about 14,100, followed by leisure and hospitality at about 12,500 and government at about 12,200. The metro unemployment rate was 2.1% in August 2026 on a preliminary, not seasonally adjusted basis, with a labor force of about 81,900. A rate that low means employers are competing for workers, and workers moving in for those jobs need somewhere to live.
Students at South Dakota Mines and nearby campuses
South Dakota School of Mines and Technology is the city’s main university. The school reported 2,541 undergraduates in fall 2025, and statewide enrollment reporting in September 2026 put its fall 2026 total at nearly 2,500 students, including a freshman class approaching 500. Black Hills State University in Spearfish reported more than 3,500 students in fall 2026, its highest in five years, though most of its students live closer to that campus.
Mines is small compared with a flagship university, so student demand is a niche rather than a market driver. It matters most for older buildings near the campus, where smaller units and walkable locations suit students and graduate researchers.
Tourism and the seasonal side of demand
Rapid City is the largest city near Mount Rushmore National Memorial and the Black Hills. The National Park Service reported 2.43 million recreation visits to Mount Rushmore in 2023. Statewide, Travel South Dakota reported record visitor spending of $5.16 billion in 2025, up 1.1%, with what it described as moderate growth of about 1% in the Black Hills and Badlands region.
Tourism affects the apartment market in two ways. It supports thousands of hotel, restaurant and retail jobs, many of them filled by year-round residents who rent. It also creates summer seasonal workers who look for short-term housing, which can tighten the market for a few months each year. Owners whose buildings rely on seasonal tenants should expect more turnover and more variation in occupancy than buildings leased mainly to hospital and base employees.
What the last federal look at the market showed
HUD has not published a full housing market analysis for Rapid City in recent years. Its most recent document is a February 2021 market profile for the Rapid City metro, which described the rental market as tight. Apartment vacancy averaged 2.0% in the fourth quarter of 2020 and the average asking rent was $1,003. HUD also noted that 852 multifamily units were permitted in 2020, a record at the time.
Those figures are more than five years old and should be treated as a baseline, not a current reading. They do show two things that still matter. First, the market entered the B-21 era with very little slack. Second, developers responded to that tightness with a record year of multifamily permits. Anyone underwriting a Rapid City building today should look at how much new supply has leased up since then and whether the newest projects are offering concessions before assuming the old 2% vacancy still holds.
Rules that shape the landlord side
South Dakota’s landlord-tenant statutes are short and specific, and the rule on deposits is one of the clearest. Under South Dakota’s security deposit statute, SDCL 43-32-6.1, a landlord “may not demand or receive a security deposit” of more than one month’s rent, unless special conditions pose a danger to maintenance of the premises, in which case a larger deposit can be agreed.
That cap affects how owners screen and price risk. With a deposit limited to one month’s rent, careful screening and well-documented move-in inspections carry more weight than in states that allow larger deposits. It also means a tenant moving from a base assignment in another state may find the upfront cost of renting in Rapid City relatively modest, which helps with lease-up.
What this means for owners of Rapid City apartments
Put together, the official data describes a market with steady underlying demand and one large, scheduled source of new demand. For owners and investors, a few practical points follow:
- Plan around the B-21 timeline, not the headlines. The first aircraft is expected in 2027, and the legislative testimony describes population growth spread through fiscal 2041. Demand will build over years rather than arrive at once.
- Watch supply near the base. Hundreds of multifamily units were already underway or finished in Box Elder by late 2024. Buildings in Rapid City will compete with that new product for military households, so location, unit size and condition matter.
- Know your tenant mix. A building leased mostly to hospital employees behaves differently from one with many seasonal or student tenants. Turnover, lease terms and summer occupancy can vary widely.
- Rebuild the numbers from current data. Rents and vacancy have changed since HUD’s 2021 profile. Current rent rolls, trailing twelve-month statements and a realistic estimate of property taxes after a sale are better guides than older market averages. Our net operating income calculator is a quick way to test how a change in rent or vacancy would affect a property’s income.
- Price in the deposit cap. Because deposits are limited to one month’s rent, screening standards and maintenance reserves carry more of the load in protecting a building.
Owners weighing whether to hold, refinance or exit can find local context, recent posts and contact details on our page about selling an apartment building in Rapid City, and a broader view of the state on our South Dakota market page.
The bottom line on Rapid City renters
Rapid City’s renter base is growing for reasons that are well documented and unlikely to reverse quickly: a population that rose nearly 8% in five years, a health system with more than 5,000 caregivers, a tourism economy that drew record statewide spending in 2025, and a base expansion that local officials expect to add more than 4,000 people by 2041. The main uncertainties are on the supply side, in how fast new apartments near the base and on the edges of the city absorb that demand. Owners who track both sides of that equation, rather than assuming demand alone will carry rents, will be in the best position to make decisions about their buildings.
