Lack of affordable housing is a growing problem in Lincoln
Everyone agrees that the city of Lincoln has a shortage of affordable housing, but city government, community organizations and homebuilders have differing ideas on what to do about it.
City officials said they will be taking a deeper dive into the issue in 2019 through the formation of a housing subcommittee and a housing affordability task force.
The shortage of affordable housing in the city has led to a majority of the low-income housing to be concentrated in the Everett and Near South neighborhoods while also resulting in increases in rent, which can cause higher rates of poverty in the area, said Shawn Ryba, executive director of the South of Downtown Community Development Organization.
“What we’re seeing is a very hot, hot housing market in Lincoln,” he said. “We’re seeing a high demand for home ownership, and rental, but what we’re not doing well with is we’re not keeping up with the demand for the housing, So what it’s causing is prices to go up for everyone.”
Ryba and his organization have been going door to door in the two neighborhoods to field the concerns of the residents as part of Collective Impact Lincoln, a project focused on addressing the needs of the six extreme poverty neighborhoods in Lincoln.
“In the last couple of years, we’re hearing people’s rents in this area go up by $100 a month,” he said. “I think this is the very beginning stages of gentrification and displacement. Since I’ve started this work, that is the biggest fear and threat for people who live in this area because they don’t have choices; this is the affordable housing that they can afford.”
The low supply of affordable housing, coupled with the area’s high demand for it, has led to disinvestment in the area and poor housing conditions, Ryba said.
Wynn Hjermstad, a community development manager with the city’s Urban Development department, said the city’s analysis shows that those most affected by the affordable housing shortage in Lincoln are households that make between 50 and 80 percent of Lincoln’s median income, about $29,672 to $47,475 per year. These households have low incomes, but aren’t considered in poverty, according to Hjermstad.
“What we’ve found in the work we’ve done is that we’re short about 5,000 units for people in that income range,” she said. “In addition to that, it’s not only affordability, it’s quality. It is an issue and it’s something that’s on our radar now.”
The Urban Development department has always known that a lack of affordable housing has been a problem, said Hjermstad, who has been with the city for 25 years, but it’s become a bigger issue and people are becoming more aware of it. The reason that the issue is drawing more attention is because it’s been an issue on the national stage that has been creeping into Lincoln from more populated coastal areas, she said.
From the homebuilding perspective, there are three major factors that make building affordable housing difficult, said Lincoln homebuilder Dennis Van Horn.
The first is the high price of land in Lincoln.
“We are working with the highest lot prices in the history of Lincoln, Nebraska,” he said. “Lots are in short supply and so the costs of land just keeps going up and up.”
Van Horn also points to a labor shortage. As fewer young people want to work in the homebuilding industry, the labor shortage grows and the cost of the labor that is available increases. In addition to record high lot prices and a labor shortage, homebuilders are facing rises in the costs of materials to build homes, according to Van Horn.
Most of the framing lumber used to build houses comes from Canada, he said. Tariffs placed on Canada by the Trump administration have caused the price of the framing lumber and plywood to increase by 70 percent since January 2017, according to Van Horn.
“It’s kind of the perfect storm of all of these costs going up at the same time,” he said.
Van Horn suggested that substandard housing in Everett and Near South could be demolished and new, more quality housing built in its place. The city could then waive the lot fee for the homebuilder or nonprofit, like Habitat for Humanity.
“If you could eliminate the cost of a lot, that’s going to be a significant reduction in the overall cost of the overall cost of what it’s going to cost the homeowner to purchase that new home,” he said.
A housing subcommittee has been organized by the city to work with the South of Downtown Community Development Organization to start looking at problem properties in the area and what policies may be the most effective in addressing the problem, Hjermstad said.
Ryba said the issue is part shortage of housing options for low-income people and part lack of a livable wage. The city government doesn’t have an affordable housing policy or livable wage ordinance in place and hasn’t adequately addressed these problems, he said.
The city is looking at possibly creating a policy that any development project involving housing that is being paid for in part by the city through tax increment financing (TIF) must have a certain number of affordable housing units included, Hjermstad said.
“My only concern is that people put too many eggs in that basket when it’s a lot bigger problem,” she said. “With a shortage of 5,000 units, we’re not going to build our way out of it (the affordable housing shortage).”
Another idea gaining interest is to provide funding to the South of Downtown Community Development Organization to start a community land trust, Hjermstad said. Nebraska is one of three states without such an option. Similar to Van Horn’s idea of the city waiving lot costs, a community land trust would buy the lot, with the help of the city, and then work with a developer to rehabilitate an existing property. The units built through a community land trust would then be more affordable to build and more affordable for people to rent or buy.
The city is also looking at convening a group of stakeholders in early 2019 to talk about these policies and other solutions for the shortage of affordable housing citywide, Hjermstad said.
“There’s a lot of people in Lincoln, or a lot of organizations, that work with affordable housing, but it’s not coordinated,” she said. “We know the city alone can’t solve the problem.”
Van Horn also said that the solution to this problem will take a community effort by all of the involved parties, but sees the city government as needing to provide the leadership for the effort.
“I think it takes somebody to pull it all together,” he said. “I really think the process ought to be shepherded by the city of Lincoln.”