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Bill helps rural Nebraska towns with few houses for workers

April 9, 2017

LINCOLN, Neb. (AP) — City officials and developers in rural Nebraska are closely watching a measure being considered in the Legislature that would create housing grants, but they acknowledge it won’t solve the problem of a dearth of workforce housing in small towns.

Although housing is a crucial concern when towns try to attract new business, small communities have fewer developers and workers needed for residential construction, and housing must be built on a smaller scale.

It creates a difficult situation for a city like Norfolk, which recently attracted a pipe manufacturing plant that will employ at least 300 people. The northeast Nebraska community of 24,000 only has about 125 homes on the market and fewer than half of them cost less than $150,000.

“It’s one of the first questions employers who are looking to expand ask about,” Norfolk city administrator Shane Weidner said. “It’s schools and housing.”

Norfolk tries to use its tools, like tax increment financing subsidies and developing infrastructure to make it easier for developers to build, but money is still tight, Weidner said.

“Our local problem here in Norfolk, and it’s common in rural Nebraska, is that we need all sorts of housing,” Weidner said.

That assessment is backed up by the most recent University of Nebraska Rural Poll, which queried about 1,750 Nebraska residents living outside of Omaha and Lincoln. The poll found many Nebraska residents living near smaller towns believe their communities don’t have enough houses or apartments to rent or purchase. Residents of central Nebraska are more likely than those in the Panhandle to believe there aren’t housing options.

“You can arguably say there’s a greater housing deficit in rural areas than in metropolitan areas,” researcher Randy Cantrell said.

A bill sponsored by Sen. Matt Williams of Gothenburg that could pass the Legislature this week would provide grants for nonprofit development corporations that build or rehabilitate homes in any county with fewer than 100,000 residents. Groups that receive the grants would have to match the funds.

“It’s not the silver bullet,” Williams said. “It’s not going to cure all these ills. But at least it creates an opportunity for communities to match their own dollars with some grant money and allows those communities to engage in workforce housing opportunities.”

His bill would create the Rural Workforce Housing Investment Fund by transferring about $7 million in unused money from the state’s Affordable Housing Trust Fund. An audit released last month found the state Department of Economic Development let the affordable housing fund accumulate an $11 million balance and failed to guarantee grant recipients had a match.

Subsidies, including grants and tax incentives, are one way developers can try to make a house more affordable, said Grand Island developer Amos Anson. They can also try to find a way to bring down the whole cost of living, so homeowners make up for a high mortgage payment with lower utilities.

Anson is now proposing changes to Grand Island’s zoning code that would allow him to build smaller houses more in line with the town’s older properties. Average home sizes have grown from less than 1,000 square feet in 1950 to close to 2,400 square feet in 2010, and those larger homes cost more to maintain and heat, Anson said.

“I’m not trying to create an affordable house,” he said. “I’m trying to create a sustainable way to live.”

His central Nebraska city of 50,000 has 80 homes on the market, and only about 20 of them cost less than $150,000. More than a third of the homes for sale cost more than $200,000, putting them out of the price range of young families and workers who the city would like to attract, Anson said.

Smaller towns are less likely to have developers, laborers and the demand for as many houses as large cities like Lincoln and Omaha, Hastings Economic Development Corporation executive director Dave Rippe said.

The south central city of 25,000 sees about 40 new housing starts each year, he said, and developers can’t take advantage of the economies of scale like they can in larger cities, leading to higher prices for renters and buyers, Rippe said.

Many people who work in Hastings commute from surrounding towns, and apartments go quickly. Rippe, who also owns apartments, said he usually gets at least one call a week checking if he has vacancies even though he doesn’t advertise his units.

“If there’s not a place for somebody to live, they can’t live here,” Rippe said.

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Follow Julia Shumway on Twitter at http://twitter.com/JMShumway

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