Bill would end creation of sanitary and improvement districts

Nebraska cities no longer would be able to create new sanitary and improvement districts under a bill considered Feb. 16 by the Urban Affairs Committee.

LB168, introduced by Lincoln Sen. Matt Hansen, would prohibit the creation of such districts after July 1, 2021.

SIDs are limited-purpose political subdivisions primarily used by larger cities to finance infrastructure outside city limits with the expectation that the developed area eventually will be annexed, Hansen said.

He said SIDs contribute to a lack of affordable housing and deter investment in older neighborhoods.

“I believe SIDs disincentive any sort of coordinated housing effort at the local level and lead to a near sole focus on suburban single-family homes,” Hansen said.

No one testified in support of the bill.

Developer Denny Van Moorleghem testified in opposition. He said SIDs provide less-expensive lots, creating lower housing costs.

“In my mind, they are the answer to affordability,” Van Moorleghem said.

Sarpy County Administrator Dan Hoins also spoke in opposition. He said SIDs transfer risk from taxpayers to developers by allowing cities to limit a project’s debt-to-value ratio prior to construction.

Also in opposition was Papillion City Planner Mark Stursma. Eliminating SIDs would hinder economic development significantly in Sarpy County, he said.

“Only a few, large well-funded developers would be capable of financing a development project,” Stursma said.

The committee took no immediate action on LB168.