Bill seeking to limit local rent control ordinances advances

A measure that would prohibit local government entities from imposing rent controls cleared the first round of debate March 10.

LB266, introduced by Norfolk 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 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.

“I do believe in local control,” Dover said. “However, I do not believe that any municipality has the right to tell a private property owner what they can charge people for the use of their property.”

Speaking in favor of the bill, North Platte Sen. Mike Jacobson echoed those sentiments. Most real estate developers are leveraged financially, he said, and need assurance that they won’t face rent control policies in the future in order to feel confident taking on additional financial liability by creating more housing.

“This is a supply and demand issue in Nebraska,” Jacobson said.

Sen. John Cavanaugh of Omaha opposed the proposal, saying it would create unnecessary regulations to deal with a “bogeyman” that doesn’t exist.

No city in Nebraska currently is contemplating rent control, he said, and senators shouldn’t pass a law that could preemptively shut down future affordable housing solutions if cities are afraid to run afoul of the bill’s provisions by thinking innovatively.

“I oppose LB266 because it solves no problem and it has the potential to cause other problems,” Cavanaugh said.

Omaha Sen. Ashlei Spivey said she was “leaning against” supporting the bill, in part because it violates local control and also because it would not help to solve any of the core problems that lawmakers were sent to the Capitol to address.

“We are preempting people and removing power from local political subdivisions to be able to organize [and] structure resources, policy and practices in a way that makes sense for them,” Spivey said.

Senators voted 32-5 to advance LB266 to select file.