TIF authorization proposed for areas lacking affordable housing

Nebraska communities could carry out redevelopment projects that use tax-increment financing in areas with little affordable housing under a bill heard Feb. 25 by the Urban Affairs Committee.

Cities currently may use TIF to help pay for redevelopment projects in areas they declare blighted and substandard.

Norfolk Sen. Robert Dover, sponsor of LB626, said many cities have “stretched” current law by including undeveloped areas in redevelopment plans, along with blighted and substandard areas, with the intention of using TIF to build affordable housing on the unplatted land.

He said LB626 would eliminate the need for this workaround by updating the definitions of blighted and substandard to include areas where less than 20% of the housing is affordable housing, which the bill defines as workforce housing, low-income housing or housing intended for households earning less than 60% of the county’s median income.

Emma Craig testified in support of the bill on behalf of the Nebraska Investment Finance Authority. The state needs an additional 100,000 to 120,000 affordable housing units, she said, and the median Nebraska household would have to make almost $20,000 more per year to afford the current median home price.

“Expanding the definition of blight[ed] and substandard to include areas that lack affordable housing could have a positive significant impact, alleviating the affordability and availability pinch currently felt across the state,” Craig said.

Also in support was Carol Bodeen, who testified on behalf of the Nebraska Housing Developers Association and the Nebraska Economic Developers Association. She said TIF is an important addition to the state’s housing programs because it creates additional community investment that can make affordable housing projects more feasible.

“This bill will make this tool more flexible and clear in its purpose,” Bodeen said.

Christy Abraham testified in support of LB626 on behalf of the League of Nebraska Municipalities. She said cities in Douglas, Lancaster and Sarpy counties effectively are barred from using TIF to build workforce housing because current law allows its use for that purpose only in rural communities or within extremely blighted areas of urban municipalities.

Dover’s measure would eliminate those restrictions, Abraham said.

No one testified in opposition to the bill and the committee took no immediate action on it.