Free lots, other incentives for rural population growth
You couldn’t pay me to live there. Or, could you?
At least one state senator, Dan Hughes of Venango (population 165), wants his colleagues to discuss incentives to attract new residents to settle in small, rural communities. He has captured enough interest that an interim study hearing has been scheduled to do just that.
He said places such as Curtis (population 900) have offered free land for building houses, as well as golf course memberships and swimming pool passes. Families with young children can earn up to $1,000 for moving there.
It’s not a new idea. North Dakota and Kansas have taken similar approaches with mixed results.
But a hearing is planned in North Platte later this month to hear public comments. Hughes said some of the impetus for the discussion comes from concerns about Sidney (population 6,888) in the aftermath of the sale of Cabela’s—the city’s largest employer—to Missouri-based Bass Pro Shops.
Hughes said keeping jobs and people in smaller cities is a huge concern, especially for industries not tied to agriculture.
But, based on Kansas experience with the idea, demographers question whether financial incentives can overcome long-standing trends and a variety of factors that drive decisions on where people live. They say people are more inclined to move for a job, family, community amenities or even the weather than for financial incentives.
The Kansas program waives state income taxes for five years for people who move from out of state into any of 77 counties designated as rural opportunity zones. It also promises to pay off up to $15,000 in student loans to people—whether they’re new to Kansas or not—who move to one of the struggling counties. Governor Sam Brownback said that people are coming to Kansas for opportunity and growth.
Curtis City Administrator Doug Schultz said the economic development corporation relies on grants to pay for incentives such as down payment assistance and cash awards for families with school-aged children who plan to buy or build a home in town. He said 15 to 20 families have taken advantage of the 15-year-old program.
Sutton City Administrator Jeff Hofaker, who previously worked in Phillips County, Kan., said the Kansas program was and still is a good deal. He said the Kansas program helped attract recent college graduates to return home. He said Nebraska communities need more flexibility with how they spend local money.
The head of the Nebraska League of Municipalities, Lynn Rex, said the challenge is using public money. Nebraska’s constitution imposes restrictions on lending the state’s credit, which prevents governments from giving tax money directly to individuals for a private purpose.
One exception is for cities that have adopted so-called LB840 programs, which allow them to use local tax revenue for economic development projects with voter approval. Senators passed a law in 2013 to let cities use that money for relocation incentives. But not all cities have adopted LB840 programs.
There are downsides. A Florida couple and their twins who moved to Hazelton, N.D., for the incentives have given up after several years and are moving back to Miami. They said they encountered unfriendly, cliquey people, struggled to run their own business and eventually wound up commuting to larger communities to work.
Would Nebraskans be nicer? One could hope. Is the incentive program the best way to go? Not necessarily.
Incentives are unsustainable. Communities should invest in making the town better with: new or expanding businesses and jobs; a clean and safe environment; decent housing; good schools; broadband access; and a welcoming attitude. Progressive towns and those in good geographic locations have a better chance at survival.
Grants for small businesses or employee relocation assistance for existing businesses make more sense. That brings housing, storefronts and manufacturing. Amenities and opportunity can lure people from the cities. Communities need to be places where people want to be. Free money won’t do it.
Lawmakers need to give the problem more than just lip service. Let’s hope that the discussion will have positive outcomes.