Can a widely used financial tool for redevelopment help Omaha solve its affordable housing problems? With an approval by City Council members Tuesday, the city may soon find out.
After five months of research, the city’s planning department recommended the City Council approve five new policies and procedures around affordable housing and tax-increment financing (TIF).
- A TIF applicant must submit information on all existing housing units within the TIF boundary, including number of residential units and rent rates.
- A TIF development project that would require the demolition of residential units won’t be approved unless the new project will create at least as many bedrooms. Instead of constructing affordable units, the developer could make a payment to the Affordable Housing Development Fund.
- Rent rolls must be submitted to the city annually for TIF development projects with a rental housing component.
- Sale price documentation must be submitted for all TIF projects with a “for sale” housing component.
- The city will assist developers through the application process for projects with income-restricted housing.
The recommendations are the result of a resolution passed in March that called for the Mayor’s Affordable Housing Task Force to work with the city Planning Department and the Tax Increment Financing Committee on a policy that would incentivize or require affordable housing in development projects that receive TIF.
That March resolution put a timeline on ideas and proposals that have been discussed for years among city leaders and affordable housing advocates. The City Council requested the Planning Department present a proposed policy on or before Sept. 1.
An additional seven recommendations will be considered at a later date. Those include changes to state law around TIF and a state constitution change to allow tax abatement for smaller developments or developments that include affordable housing.
TIF, as it’s currently regulated, only works with an increase in property value. Mandating affordable housing, which limits the increase in property values, is somewhat counter to the TIF program, Kellie Johnston Dorsey with the City Planning Department told council members Tuesday.
“It is understandable that we were directed to look at the TIF program as a way to increase Omaha’s supply of affordable housing,” Johnston Dorsey said, “as it is one of the very few incentives available in the state of Nebraska.”
A number of studies have found that Douglas County needs to develop as many as 30,000 additional affordable-housing units in the next several years to meet demand. Generally, housing is considered “affordable” if it does not exceed 30% of a household’s income.
TIF is meant to encourage the revitalization of stagnant areas considered “blighted.” The developer of a city-approved project takes out a loan to help cover eligible redevelopment expenses tied to a project. The loan is paid back, generally over a 15- or 20-year period, by using the increased property taxes that are generated on the new development.
Through TIF, vacant lots and decaying buildings have transformed into shopping centers, mixed-use developments and, increasingly, apartments.
The planning department recently estimated that in 2024 about 10% of the housing units TIF helped bring online over the last five years were affordable. In 2025, that estimate was 23%.
Johnston Dorsey said there are a lot of misconceptions around the TIF program. TIF is not a bucket of funds that the city hands out. The funds come from increases in tax revenue generated by a specific development.
“Currently, Omaha’s TIF program is geographically limited,” Johnston Dorsey said. “Tying affordable housing to TIF districts would geographically concentrate those affordable units when we need affordable housing throughout our city.”
With that in mind, the planning department presented the “part one” recommendations with the goal to eliminate the possibility of losing affordable units with TIF projects. “Part two” recommendations will add tools to increase the supply of affordable housing.
The part one recommendations were approved by City Council on a 5-2 vote. Council members Brinker Harding and Aimee Melton voted against the resolution after calling for more time to hear from the public and assess the potential impacts of the changes.
Councilman Pete Festersen called the approval “an important step forward.”
“But we can’t stop the conversation now,” Festersen said. “There’s much more that needs to be done.”
Other Nebraska cities have passed similar stipulations around TIF and affordable housing. In Hastings, a proposed change to the city’s micro-TIF policy would allow more eligibility for residential properties.
In Lincoln, housing projects that receive TIF and are within the urban core are expected to include at least 10% affordable housing. If the project proposes the elimination of existing affordable housing, there is an expectation that displaced units will be replaced on a one-to-one basis.