Session Review 2020Urban Affairs

Urban Affairs

Proposals to address blighted property, affordable housing needs and municipal law were among the topics taken up by the Legislature this session.

Housing and development

Senators passed bills to encourage the development of affordable housing and help cities across the state address problem properties.

LB866, sponsored by Omaha Sen. Justin Wayne, adopts the Municipal Density and Missing Middle Housing Act. The bill incentivizes affordable housing projects by requiring affordable housing action plans in certain cities.

The bill requires cities with populations greater than 20,000 to submit a report every two years, beginning July 1, 2021, to the Urban Affairs Committee detailing their efforts to incentivize affordable housing.

All cities with populations greater than 50,000 will be required to adopt an affordable housing action plan by Jan. 1, 2023, and all cities with populations between 20,000 and 50,000 will be required to adopt a plan by Jan. 1, 2024.

LB866 also includes provisions of LB1155 that create the Middle Income Housing Investment Fund within the state Department of Economic Development to support development of workforce housing in Nebraska counties of 100,000 or more residents.

Only nonprofit organizations may apply for grants, which will be based on a demonstrated need for additional owner-occupied housing in communities with an unemployment rate higher than the state average.

The fund will receive a one-time, $10 million general fund transfer. Any grants awarded will require one-to-one matching funds.

LB866 passed on a 31-7 vote.

A bill that provides more options for the use of land banks passed this session.

LB424, introduced by Grand Island Sen. Dan Quick, allows any municipality in Nebraska to join an existing land bank—a tax-exempt political subdivision that acquires, manages and develops vacant and tax-delinquent properties—under the Nebraska Municipal Land Bank Act.

Metropolitan and primary class cities are allowed to create stand-alone land banks under the bill.

LB424 contains a number of safeguards, including provisions that:
• prohibit a land bank from issuing bonds;
• prevent a land bank from investing in a property that financially could benefit a board member, their businesses or their immediate family members;
• limit the total number of parcels that a land bank may own;
• expand land bank reporting requirements;
• prevent a land bank from receiving property tax revenue from an agreement under the Joint Public Agency Act;
• prohibit a land bank from temporarily holding real property for a nonprofit corporation or private entity in most cases; and
• allow an entity that creates or joins a land bank to withdraw from the agreement by a two-thirds vote of the governing body.

The bill passed on a vote of 31-12.

North Platte Sen. Mike Groene’s LB1021 creates an expedited review process of tax-increment financing for certain redevelopment projects under the state’s Community Development Law. If authorized by the governing body of a municipality, a project will qualify for expedited review if it:
• involves repair, rehabilitation or replacement of an existing structure in an existing substandard and blighted area;
• is in a county with a population of less than 100,000;
• involves a structure that is at least 60 years old; and
• does not exceed $250,000 for a single-family structure, $1 million for a multi-family or commercial structure or $10 million for a structure on the National Register of Historic Places.

The bill passed 49-0.

Other measures

Senators also passed an omnibus bill that makes several changes to state law governing cities and villages.

LB1003, introduced by Sen. Lynne Walz of Fremont, allows any second class city or village to annex land, lots, tracts, streets or highways to relocate all or part of a city or village because of catastrophic flooding, while waiving a requirement that annexed areas be contiguous or adjacent and urban or suburban in character.

Such annexation will require a two-thirds vote of either the city council or the village board.

The bill, passed 42-1, includes provisions of eight other measures:
• LB795, introduced by Lincoln Sen. Matt Hansen, which amends the Enterprise Zone Act to define unemployment criteria;
• LB799, introduced by the Urban Affairs Committee, which makes technical changes to statutes covering primary class cities;
• LB801, also introduced by the committee, which makes technical changes to the Community Development Law related to tax-increment financing;
• LB821, introduced by Sen. Tom Brewer of Gordon, which allows the planning commission of a first or second class city or village to cancel a quarterly meeting if there is no business pending;
• LB885, introduced by Lincoln Sen. Kate Bolz, which changes requirements for grants under the Civic and Community Center Financing Act;
• LB957, introduced by Walz, which allows a mayor of a first or second class city to be considered a member of the town’s city council to establish a quorum if the council consists of four members;
• LB984, introduced by Omaha Sen. Megan Hunt, which requires vacancies on airport authority, metropolitan transit authority, land bank, riverfront development authority boards and housing authority boards to be filled within six month after the date of the vacancy; and
• LB993, introduced by Kearney Sen. John Lowe, which allows cities with a population between 10,000 and 25,000 to expand the size of their city council from five to seven members under the City Manager Plan of Government Act.

LB870, introduced by Bellevue Sen. Sue Crawford, allows cities and villages to borrow directly from a financial institution to repair or rebuild property or restore public services damaged or disrupted by a natural disaster.

The bill, approved 48-0, limits direct borrowing to 20 percent of the annual budget of a second class city or village or 10 percent for a first, primary or metropolitan class city.

The Urban Affairs Committee considered a bill late in the session that would have adopted the Municipal Police Oversight Act. LB1222, introduced by Omaha Sen. Justin Wayne, would have required any city that employs full-time police officers create a seven-member citizen oversight board to investigate police shootings, alleged misconduct and complaints against police departments and to monitor and evaluate policing standards, patterns and practices.

LB1222 did not advance from committee.

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