Watching LB1067

LB 1067 is one of those bills that does not grab headlines at first glance, but it is worth watching closely, particularly in a community like McCook that has seen steady residential growth and is actively working to expand its housing stock. The measure would increase the documentary stamp tax on real estate transfers by about 65 percent, with the stated goal of providing a more reliable funding stream for two housing programs that lawmakers say have delivered outsized returns.

Introduced by Bob Hallstrom of Syracuse, LB 1067 would raise the tax from $2.32 to $3.82 for every $1,000 of property value. On a $400,000 home, supporters say, that would amount to roughly $600 more at closing-that’s on top of about $928 already collected under the current rate. Hallstrom argues the increase is modest and necessary, noting that the additional revenue would be split evenly between the Rural Workforce Housing Investment Fund and the Middle Income Workforce Housing Investment Fund, generating an estimated $12 million annually for each beginning in fiscal year 2026–27.

The Rural Workforce Housing Investment Fund is already familiar territory in McCook. The intent is straightforward: housing shortages make it harder to attract workers, and without workers, economic development stalls. The city has successfully applied for rural workforce funding in 2020 and again in 2023, but a third attempt fell short in a highly competitive process, according to local officials.

Amanda Engell, Director of Housing at the McCook Economic Development Corporation, said the program’s strength lies in its flexibility and its ability to operate as a revolving loan fund. Locally, those dollars have supported apartments above Bethany Village, the rehabilitation of long-neglected upper-story units on B Street, financing for the Parkview Townhomes development and, most recently, the St. Catherine’s acquisition loan. In several cases, funds are repaid and redeployed, keeping the original investment working inside the community rather than disappearing after a single project.

The Middle Income Workforce Housing Investment Fund, by contrast, is not directly applicable to McCook under current law. It is intended for households that earn too much to qualify for traditional housing assistance like teachers, healthcare workers and skilled tradespeople. The statute, however, ties eligibility to larger, urban communities with populations over 100,000. Unless that framework changes, smaller cities like McCook are left on the sidelines, even though the underlying housing pressures may feel similar.

Supporters of LB 1067 point to what Hallstrom called an “astonishing” return on investment from both programs and argue that inconsistent legislative funding has limited their impact. Engell noted that McCook has utilized the trust fund for more than a decade, but reallocations have made the funding increasingly difficult to secure.

Opponents, including representatives of the Nebraska Realtors Association, warn that higher documentary stamp taxes increase closing costs, erode seller equity and make it harder for buyers to move up or relocate. They argue that reducing regulations and construction-related taxes would do more to expand housing supply without adding costs at the closing table.

Both sides make reasonable points. Nebraska does face a real housing shortage, and targeted investment has clearly helped projects pencil out in places like McCook. At the same time, housing affordability is sensitive to even “modest” cost increases, particularly for first-time buyers. LB 1067 sits squarely at that tension point. The committee took no immediate action on the bill, but as lawmakers weigh its merits, communities like McCook will be watching closely—not just to see whether more money flows, but where it is ultimately allowed to land.