Bill would let Omaha and Lincoln use local economic development tools for affordable housing

Senator John Kavanaugh introduced LB850 to allow cities of the primary metropolitan class—specifically Lincoln and Omaha—to use local-option municipal economic development funds for affordable or workforce housing as other Nebraska municipalities already do. He said the change would impose no state cost and would be subject to local voter approval.

Developers and community development organizations supported the bill, saying it creates another tool to close financing gaps, particularly for infill and small-scale rehabilitation projects where traditional financing is limited. Fred Hoppe (Hoppe Development) and SPARK representatives described how local gap financing can make marginal projects viable and argued the bill simply provides an optional tool for local leaders.

League testimony described the existing LB840 framework and noted many smaller communities already use it; advocates said Lincoln and Omaha might not have adopted programs in the past because the list of qualifying uses for LB840 traditionally favored smaller economic development incentives rather than housing. Committee members asked about voter-approval mechanics and whether the cities have programs in place; the sponsor said the bill only provides the option and localities would still need to adopt and vote on programs.