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Omaha plans to sell vacant lots for $1 to generate housing

The Omaha City Council is considering selling 54 city-owned vacant lots in North Omaha, many of them for $1 each, in hopes of speeding up the development of affordable housing in the area.

The lots would be sold to 10 different buyers, including nonprofit developers and for-profit private companies, under the proposal from the Omaha Planning Department and Mayor Jean Stothert.

The council is scheduled to hold a public hearing and vote on purchase agreements when it meets Tuesday afternoon.

“We’ve owned the properties for an average of 16 years,” Assistant City Planning Director Kellie Johnston Dorsey said. “We’re ready to sell them so they can be put into productive use again.”

The buyers plan to build housing on 50 of the 54 lots. Not only do they plan to do that, but under the terms of the purchases, they must. The deals for many of the lots include deed restrictions that give the city the right to buy the properties back for the purchase price if the buyers have not started construction within two years of the closing date. The city could also buy the properties back if the buyer does not substantially complete construction within 42 months.

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“We’ve heard from residents: Don’t sell (the property) to someone who’s just going to sit on it,” Johnston Dorsey said.

Generally, the city is requiring a minimum of one housing unit per lot.

“Most of the proposed buyers have indicated they’re going to build more than the minimum,” Johnston Dorsey said.

She said the result should be “at least 50 affordable housing units,” and possibly a lot more than that.

For the four lots not intended for housing, the buyers would pay the appraised market value. Those properties comprise an unbuildable lot, one that the homeowner next to it wants to buy and two parcels used by a neighborhood association as urban gardens to address food insecurity.

Spencer Management owner Justin Moore said he plans to build 20 units, including townhomes and duplexes, on the 13 lots his company proposes to buy from the city.

“We’re just doing affordable housing,” Moore said. “We’re trying to just contribute to the housing that needs to be built in this area.”

The lots that Spencer, a Black-owned firm based in North Omaha, proposes to buy are near 28th and Charles Streets and 29th and Franklin Streets.

As with several other buyers, Spencer would pay $1 each for the properties. Nebraska community development law allows a city to sell lots for $1 when the properties are in an area with a city-adopted community redevelopment plan, and the buyers’ plans are in accordance with that redevelopment plan.

If those conditions are not met, the city must sell the lots at appraised value.

N16th Street LLC, an arm of Lincoln-based Hoppe Development that is rehabilitating Omaha’s historic Chambers Court apartments, is slated to buy 13 lots. Other proposed buyers include Omaha 100 Inc., Holy Name Housing Corp., Forever North Real Estate and Solica Development.

The lot-selling proposal is likely to engender debate during the public hearing and council deliberations. Council member Juanita Johnson said she heard concerns from constituents about the property sales and about Stothert’s proposed appointments to the board of Omaha’s new Inland Port Authority.

“First and foremost, the sale of city property at such a nominal amount raises significant questions about adherence to community development laws and regulations,” Johnson said by email Monday. “It is essential that any transaction involving public assets is conducted with full transparency, proper valuation, and due process to ensure that the public interest is safeguarded. I urge all stakeholders to thoroughly review this transaction to confirm its compliance with all applicable laws and to provide a clear rationale for the sale price.”

Many of the lots came from the Land Reutilization Commission, a former agency that, before the Omaha Municipal Land Bank was created, took title to properties that had been foreclosed on for non-payment of property taxes. Some have been vacant for many years. In some cases, the city has demolished buildings and prepared the sites for building.

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