LINCOLN — Calling it a means to preserve local homeownership, a state senator has proposed legislation to keep businesses without a tie to the state from buying single-family housing in Nebraska.
Under Legislative Bill 1405, introduced by Omaha State Sen. Justin Wayne, a corporation, hedge fund or other business would not be able to purchase a single-family home in Nebraska unless that entity is domiciled in Nebraska and its principal members are state residents.
Speaking Monday to the Legislature’s Banking, Commerce and Insurance Committee, Wayne referred to an Ohio-based private company as an example. He said Vinebrook Homes has snapped up scores of homes in North Omaha to become one of the state’s largest landlords. Flatwater Free Press has reported on the company.
“Last year some sources suggest that one out of five homes sold in the country were bought by investors, mostly those under $200,000,” Wayne told the committee. “In Omaha it went from not being a problem to all of a sudden being a huge problem.”
He said the companies have the financial capacity to outbid average families, and the homes become “perpetual renterships.”
Much of the wealth-building in the United States is based on homeownership, Wayne said. “And that can’t happen when these out-of-state companies come in and block homes or buy them overpriced.”
He said he was inspired by the Omaha situation, but also by Gov. Jim Pillen’s idea to prevent foreign adversaries and sanctioned nationals from buying land in Nebraska.
“I was like, Let’s just take it a step further and see if we can save some homes,” Wayne said.
Three people spoke in support of the bill during the public hearing. No one testified in opposition, though pushback came from a couple of lawmakers on the committee.
Omaha Sen. Brad von Gillern said he could imagine numerous ways a company could get around the law, including setting up different layers of ownership and shell companies, and he was not convinced this was an answer to preserving homeownership.
“As a pure capitalist,” he said, that he fundamentally opposes the idea but understood the motivation to want to preserve homeownership for low- to moderate-income Nebraskans.
Wayne said he recognized the proposal was not “perfect” or “ready for prime time.” But he said it was a concept the state had to start talking about.
Wayne Mortensen of NeighborWorks Lincoln told the committee that 13% of single family housing in Lincoln was owned by out-of-state entities. He said some neighborhoods are seeing dilapidation and housing decline due to absentee landlords with no accountability to the local community.
Sen. Mike Jacobson of North Platte said it was hard for him to fathom that the state would restrict property owners on “who they can sell their property to and how much they can sell it for.”
Said Jacobson: “At the end of the day, where do we say that capitalism ceases and we’re going to take over from a socialistic standpoint and put controls on who can control what inside the state of Nebraska?”
The committee took no immediate action Monday on whether to advance the proposal to full legislative debate.
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