Cindy Gonzalez
LINCOLN — A measure that would prevent local governments from imposing rent controls on private property, with some exceptions, took a step forward in the Nebraska Legislature on Monday.
Legislative Bill 266, introduced by State Sen. Rob Dover of Norfolk, moved ahead on a 32-5 vote despite objections from a handful of Democratic lawmakers.
Under LB 266, cities and counties generally would be prohibited from enacting local laws that have the effect of placing rent controls on private property.
The bill outlines exemptions for ordinances aimed at increasing the affordable housing supply “through land use or inclusionary housing requirements” or for programs in which the landlord voluntarily and contractually agrees to rent restrictions.
Dover told fellow lawmakers that 37 other states had enacted similar legislation prohibiting rent controls, and he believes it is better to “look at what is going on in the country and get in front of it.”
Stifling innovation
State Sen. John Cavanaugh of Omaha was among several lawmakers who said they’ve not heard of any city in Nebraska proposing rent controls and who saw the bill as unnecessary trampling on local control.
“It solves no problem and has the potential to cause other problems,” Cavanaugh said. “We are inadvertently going to stifle any innovation of solving the problem of affordable housing.”
State Sen. Ashlei Spivey of Omaha agreed, saying the law would preempt local governments from exploring policies that might make sense in their respective communities.
State Sen. Terrell McKinney of Omaha said the conversation should be more focused on how to create more affordable housing, which lawmakers regardless of party affiliation continue to say is one of the most pressing issues facing the state.
North Platte State Sen. Mike Jacobson, who supported the prohibition and the bill, said supply and demand should rule. He said private landlords should have the ability to set higher rents to make their own payments.
“The more things we could do preemptively to assure people who want to invest in properties or build new properties that they’re not going to be faced with this, the more they’re going to be encouraged to build more housing,” said Jacobson.
“If you want cheaper rent, you’re either gonna drop down in the quality of the home or apartment you live in, or we’re gonna have to get a handle on increased property taxes, increased insurance costs and lower interest rates.”
Potential conflict
State Sen. Rita Sanders of Bellevue, the chair of the committee that earlier advanced LB 266 to the full Legislature, had filed a potential conflict of interest statement with the Nebraska Accountability and Disclosure Commission. She said that her husband’s business owns commercial and residential retirement real estate properties and she is a contingent beneficiary.
She said some might believe the retirement communities could benefit from the prevention of rent control. Sanders said that while that was “highly unlikely,” her disclosure was done out of “abundance of caution.”
Sanders did not recuse herself from chairing her committee when LB 266 surfaced, because she said any potential benefit is “extremely remote.” The form stated that if the senator had a conflict with LB 266, “it would seem that every senator who owns or has an interest in residential rental property in Nebraska is subject to a potential conflict of interest.”
Dover, whose business manages real estate properties and who has rental properties, said he did not see a potential for personal enrichment from LB 266 and did not file a potential conflict of interest form.
He said he views affordable housing as a personal priority during his legislative term and has at least two pending bills. His LB 626 would make it easier to use tax-increment financing in the production of workforce housing.
His LB 622 would create the Statewide Housing Assistance Program, administered by a nonprofit under a contract by the state, to provide downpayment assistance loans toward the purchase of a new home. The bill would raise the documentary stamp tax to help fund the program. Counties collect a documentary stamp tax on the transfer of real estate, a portion of which is remitted to the state and currently used for funds related to such things as affordable housing and homeless shelter assistance.