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BLAIR — For about three years, Jason Thiellen of E&A Consulting Group watched client after client turn down the prospect of developing a housing subdivision on a tract of land near the Walmart in this town of about 8,000 people.
At the same time, Blair City Administrator Phil Green was on a mission to spur new residential dwellings that would grow the town and its tax base and keep local workers from living away.
He and Thiellen, who is also president of Welcome Home Coalition, a nonprofit that advocates for better housing access, teamed up with others including Bluestem Capital Partners in the municipal securities industry and state Sen. Mike Jacobson, a banker from North Platte.
Together they pushed for change they believe will prod developers to take on small-town homebuilding projects previously shrugged off as too risky.
The change came in the form of a newly passed law that allows for creation of “Community Improvement Districts” — zones inside a city’s boundaries where property owners essentially tax themselves to fund infrastructure and public improvements.
Blair is the first Nebraska town trying to establish a CID, and those working on the 137-unit Bear Creek residential project said the price of a house there could drop by as much as 30% by applying the new provisions.
“It’s a model that is good for the developer and equally as good for smaller communities where having housing development in the city limits is really really important,” said Green.
Known as Legislative Bill 1130 before folding into LB 1114, the CID is viewed by supporters as a tool to confront a statewide housing affordability and supply shortage that, according to a still-cited 2023 report, had reached crisis proportions. Committees formed at the time of that report continue to pursue its recommendations, including creation of tens of thousands of affordable dwellings.
Under the CID Act, property owners within a Nebraska city’s limits can voluntarily form a district that has power to issue long-term, income tax-exempt bonds to finance streets, sewers and other public infrastructure needed to build and support a new neighborhood.
Given required approval by the respective city government body, a CID board will set a tax levy on property owners within the district and that revenue pays down bond debt over a period of 20 to 30 years.
That’s on top of other property taxes the homeowners pay. But supporters say the CID model lowers up front costs of home lots, making the price of the house more accessible and affordable. On average, the cost of a CID house is 15-20% less.
