Workforce housing bill stalls

A bill intended to expand workforce housing in urban communities stalled on general file March 4.

LB1155, as introduced by Omaha Sen. Tony Vargas, would create a grant program within the state Department of Economic Development to support development of workforce housing in Nebraska counties of 100,000 or more residents. Sarpy, Lancaster and Douglas counties would be eligible for the program and only nonprofit organizations could apply for grants.

The Middle Income Housing Investment Fund would receive a one-time, $10 million general fund transfer. Any grants awarded would require one-to-one matching funds.

The program could be used for new construction, substantial repair or rehabilitation of dilapidated housing or upper-story housing development for occupation by a homeowner.

An Urban Affairs Committee amendment would define workforce housing as homes with an appraised value of $150,000 to $250,000.

Vargas said expanding the inventory of middle-income housing would enable young adults to stay in Nebraska.

“There’s a shortage of this type of housing,” Vargas said. “In my district, specifically, there has been a lot of new construction of higher-income condos and higher-income rental units. While the investment in the neighborhood has been positive in many ways, it has also resulted in longtime residents being pushed out.”

Sen. Justin Wayne of Omaha spoke in support of the bill, saying it was similar to a law passed three years ago to promote workforce housing development in rural areas. LB1155, Wayne said, would enable people to move out of low-income housing.

Sen. Steve Erdman of Bayard opposed the bill. He said that such a program would obscure the real reason private developers aren’t building workforce housing—high property taxes.

“We’ve been putting a Band-Aid on the problem,” Erdman said. “We spend too much, which makes our property taxes too high, and then we have to incentivize people to do things that the common investor can’t do.”

Sen. Dave Murman of Glenvil also opposed the bill, saying government shouldn’t subsidize housing.

“Government is not effective or efficient in doing these types of things,” Murman said.

After several senators opposed using general fund dollars for the program, Vargas offered an amendment to remove that provision from the bill. He said he would work to find other funding sources.

After three hours of debate, the Legislature moved on to the next item on the agenda without voting on LB1155 or any pending amendments. Per a practice implemented by Speaker Jim Scheer, the sponsor of a bill that is facing a potential filibuster must demonstrate sufficient support for a cloture motion before the measure will be scheduled for additional debate.