Living in Hill City
A central hills tourism town with the highest ranked high school in Pennington County, and the strictest short-term rental trap in the region.
- Population
- About 950
- Drive To Rapid City
- About 30 to 35 minutes on US-16
- To Ellsworth AFB
- About 45 minutes
- School District
- Hill City School District 51-2
A small mountain main street that swells every summer and empties out by October.
Hill City is a small town with an outsized summer, an unusually strong school, and one short-term rental rule that can quietly cost a buyer a great deal of money. Start with that rule.
Read this before you buy an STR here
In June 2022 Hill City voters banned new short-term rentals in residential zones. Existing rentals may continue, but the right does not transfer when the property sells. That is the sentence that matters. A home marketed with rental history and rental income does not automatically come with the ability to keep renting it, and roughly 10 percent of the town's housing was in short-term rental use at the time of the vote.
For buyers, that means income figures in a listing may describe a use you cannot legally continue. For sellers, it means pricing a residential-zone home on rental income is a claim that has to be verified before it is made. Commercial zones remain possible, and outside city limits Pennington County's Vacation Home Rental license applies instead. I check zoning and jurisdiction for the parcel before we talk about numbers.
The town itself
About 950 people live here year round, and the summer population is a different thing entirely. Hill City sits in the heart of the central hills on US-16, roughly 30 to 35 minutes from Rapid City, with Crazy Horse Memorial about 12 miles away. The 1880 Train runs from downtown and the Mickelson Trail passes straight through town, which is one of the more genuinely useful amenities you can have at your door in this region.
Heavy summer tourism shapes daily life in both directions. Main street businesses are busy and the restaurants are good for a town this size. It also means traffic in July, seasonal employment patterns, and a rhythm where October feels like a different town than June. Buyers should visit in both seasons before deciding, and I encourage that.
My take
Hill City is the heart of the Hills, and living here means the good stuff is genuinely at your door. The Mickelson Trail runs through town, the 1880 Train leaves from downtown, Crazy Horse and Sylvan Lake are a short drive, and the restaurants punch well above the population. Summer is busy and October is peaceful, and the people who love it here love both versions. Visit in each season, then decide, because that rhythm is a real part of the appeal.
Can you rent it out?
The resale trap is the headline: existing short-term rental rights in residential zones do not transfer when a property sells.
- In June 2022 voters banned new short-term rentals in residential zones. Roughly 10 percent of the town's housing was in short-term rental use at the time.
- Existing rentals may continue, but the right ends at sale. Buying a home currently used as a short-term rental in a residential zone does not give you the right to keep renting it.
- Commercial zones remain possible, so the zoning of the specific parcel is the first thing to check.
- Outside city limits, Pennington County's Vacation Home Rental license applies instead, a different jurisdiction with different rules.
- Statewide requirements still apply either way: a South Dakota sales tax license once you rent 10 or more days a year, the 4.2 percent state tax and 1.5 percent tourism tax, and Department of Health lodging licensure.
Short-term rental rules change, and they change fast. This summary reflects my research as of August 2026 and is general information, not legal advice. If rental income is part of why you are buying, verify the current requirements with the city or county that has jurisdiction over the specific address, and read the subdivision covenants, before you write an offer.
Schools
Hill City School District 51-2 is small and genuinely strong, rated B plus by Niche.
- Hill City High School is ranked 20th in South Dakota and first in Pennington County by Niche.
- It reports a 90 percent graduation rate and an average ACT score of 25.
- Dual credit coursework is available to students.
- Graduation is traditionally held at Mount Rushmore, which is a fair summary of what makes this town different.
- Verify attendance for a specific parcel with the district before making a school-driven decision.
School ratings are as published by Niche and GreatSchools using 2024 to 2025 data and change over time. Attendance boundaries do not follow city lines in this region and can differ parcel to parcel, so confirm the assigned schools for any specific address directly with the district before you make a school-driven decision.
Where to eat
A strong lineup for 950 people:
Things to do
Most of it starts within walking distance of main street:
- The 1880 Train, departing from downtown
- Mickelson Trail access straight through town
- Crazy Horse Memorial, about 12 miles away
- Stone Faces Winery and Naked Winery
The weather, honestly
Using NOAA 1991 to 2020 normals, Rapid City averages a 59 degree high and a 37 degree low across the year. January runs 37 over 16, July runs 84 over 62. Summers are bright, with the National Weather Service putting sunshine at 65 to 75 percent of possible.
Snowfall varies enormously by elevation, which is the single most useful climate fact in this region. Rapid City averages 48.5 inches a year. Lead averages 183.9 inches. Those two towns are less than an hour apart. Meanwhile the foothills corridor running from Rapid City toward Hot Springs, the so called banana belt, runs warmer in winter thanks to chinook winds that can push winter days into the 50s and 60s.
Those winds are not a rumor. Spearfish holds the world record for fastest temperature change: on January 22, 1943, it went from minus 4 to 45 degrees in two minutes.
For gardeners and anyone planning outdoor work, the growing season runs about 131 days, with last frost around May 22 and first frost around October 1. And the hazard to actually budget for is hail, the region's most common severe weather from late May through August. It is why I ask about roof age and roof documentation on every home I show.
Common questions
Can I buy a short-term rental in Hill City?
In residential zones, generally no. Voters banned new short-term rentals there in June 2022, and while existing rentals may continue, the right does not transfer on sale. Commercial zones remain possible, and outside city limits Pennington County's Vacation Home Rental license applies instead. Verify zoning and permit status for the exact parcel before you write an offer.
A listing here advertises rental income. Is that reliable?
Treat it as a question, not a fact. Income earned under an existing residential-zone rental does not come with the house, because that right ends at sale. I confirm the parcel's zoning and current permit status in writing before we discuss what the income is worth.
How are Hill City schools?
Small and strong. The district is rated B plus by Niche, and Hill City High is ranked 20th in South Dakota and first in Pennington County, with a 90 percent graduation rate, an average ACT of 25 and dual credit options. Graduation is traditionally held at Mount Rushmore.
What is the drive to Rapid City?
About 30 to 35 minutes on US-16, with Ellsworth Air Force Base roughly 45 minutes. Summer tourist traffic on that corridor can add time, which is worth planning around if you commute daily.
Nearby guides
- Custer
The county seat at the door of Custer State Park, with real fine dining, a new hospital, and rental rules that flip completely at the city line.
- Rapid City
The region's hub for jobs, medicine, dining and flights, and the shortest commute to Ellsworth Air Force Base.
- Lead and Deadwood
High elevation historic towns with Terry Peak, gaming, the Mickelson Trail and the Powder House Pass master-planned community just south of Lead.
Keep reading on Hill City
How South Dakota permits and regulates private wells, the water testing I recommend before closing, what FHA and VA loans actually require, and how to pull a well's history before you rely on it.
Rental rules in this region change at the city line, and in two towns the right to rent ends the day the property sells. Here is the town by town picture and the diligence I run before an investor writes an offer.
Water, waste, and legal access decide whether a rural property is a good buy. Here is the homework I do on every acreage transaction.
My free buyer's guide, written for wells, septic, hail history and PCS timelines in this region.
Price, down payment, rate, taxes, insurance and HOA in one number.
Looking in Hill City?
Call 605-490-2040 or send a note with your budget and timeline and I will tell you what is realistic here right now, including what has actually closed. You can also search every active listing in the area on my search site.
This guide is general information, not legal, tax, lending or financial advice. Facts and figures are cited from public sources as of August 2026 and change over time. Henry Roy is a licensed real estate professional with Ascend Realty in South Dakota. Equal Housing Opportunity.