Bill seeks to limit local rent control ordinances

A measure that would prohibit local government entities from imposing rent controls was considered by the Government, Military and Veterans Affairs Committee Jan. 29.

LB266, introduced by North Platte Sen. Robert Dover, would prohibit any Nebraska municipality, county or other political subdivision from enacting or enforcing an ordinance that would have the effect of imposing rent controls on private property.

The bill would not apply to programs meant to increase affordable housing or a program entered into voluntarily by a property owner.

Dover said Nebraska is one of only 13 states without a law prohibiting rent control, a policy that he said “throws off market dynamics” and disincentivizes housing development. Builders choose not to take on new projects if they don’t see the potential for a return on their investment, he said.

“With that in mind, prohibiting rent control may foster housing development and help address housing supply shortages,” Dover said. “A free market approach allows prices to reflect the actual value of housing based on location, amenities and demand.”

Testifying in support of the measure was Lynn Fisher, president of the Statewide Property Owners Association. He said association members in Omaha are concerned that rent control may be part of the city’s long-term plan to address a lack of affordable housing.

Fisher said a recent rent control ordinance enacted in St. Paul, Minnesota, is now being rescinded because new property development ceased and housing costs climbed as property owners raised rents to the maximum amounts allowed.

“When government at any level adds more regulation and chooses winners and losers in the economy, everyone loses,” he said.

Also supporting LB266 was Dennis Tierney of the Metropolitan Omaha Property Owners Association. Rent control has been used as a means to encourage affordable housing, he said, but research has shown it to have the opposite effect.

“We need to keep private property rents market driven rather than government determined,” Tierney said.

Testifying in opposition to the measure was Erin Feichtinger, policy director for the Women’s Fund of Omaha. Calling LB266 a “solution in search of a problem,” she said there are no political subdivisions in Nebraska currently proposing rent control policies.

Omaha’s affordable housing action plan does not recommend rent controls, she said, but merely mentions in a report that the concept was raised during a community engagement process mandated by the state law that requires cities to develop such plans.

Feichtinger said the lack of affordable housing is a “crisis” across Nebraska, but not one that should be solved by a one-size-fits-all approach imposed by the state. Housing instability and housing needs look different in each community, she said, and lawmakers shouldn’t preemptively remove from consideration any tool that might prove useful.

“Local government is the best government because it’s closest to the people,” Feichtinger said.

The committee took no immediate action on LB266.