Sections 19-5501 to 19-5506 shall be known and may be cited as the Municipal Density and Missing Middle Housing Act.

The Legislature finds and declares that:

(1) Residential density is beneficial in making better and more cost-effective use of municipal resources and services;

(2) There is a need for affordable housing in municipalities of all sizes in Nebraska. Affordable housing contributes to economic growth by providing housing options for workers of all levels;

(3) Following World War II, municipal zoning codes, ordinances, and regulations in Nebraska and throughout the United States prioritized detached single-family homes and mid-rise to high-rise apartment buildings over other forms of housing stock;

(4) In addition to zoning restrictions, the historic practice of redlining in Nebraska communities has contributed to a lack of affordable housing in many Nebraska municipalities;

(5) Housing stock known as middle housing, while prominent in the early 1900s, has been largely missing in the construction of new housing in the United States since the mid-1940s; and

(6) Examining and updating municipal zoning codes and ordinances to permit varied types of housing stock will provide greater availability of affordable housing, increase residential density, promote more efficient and effective land use, and create conditions for successful mass transit, bikeability, walkability, and affordability in residential neighborhoods.

For purposes of the Municipal Density and Missing Middle Housing Act:

(1) Accessory dwelling unit means an interior, attached, or detached residential structure that is used in connection with, or that is an accessory to, a single-family dwelling and is located on the same lot or parcel as such single-family dwelling;

(2) Affordable housing means residential dwelling units affordable to a household earning not more than eighty percent of the income limit as set forth by the United States Department of Housing and Urban Development under its Income Limits Documentation System, as such limits existed on January 1, 2022, for the county in which the units are located and for a particular household size;

(3) City means any city of the metropolitan class, city of the primary class, or city of the first class in the State of Nebraska with a population of at least twenty thousand inhabitants as determined by the most recent federal decennial census or the most recent revised certified count by the United States Bureau of the Census;

(4) Cottage cluster means a grouping of no fewer than four detached housing units per acre with a footprint of less than nine hundred square feet each and that includes a common courtyard;

(5) Density bonus means a density increase over the otherwise maximum allowable residential density under a city's zoning codes, ordinances, and regulations;

(6) Middle housing means:

(a) Duplexes;

(b) Triplexes;

(c) Quadplexes;

(d) Cottage clusters; or

(e) Townhouses;

(7) Townhouse means a dwelling unit constructed in a row of two or more attached units where each dwelling unit is located on an individual lot or parcel and shares at least one common wall with an adjacent unit; and

(8) Workforce housing means:

(a) Housing that meets the needs of working families;

(b) Owner-occupied housing units that have an after-construction appraised value of at least one hundred twenty-five thousand dollars but not more than two hundred seventy-five thousand dollars to construct;

(c) Owner-occupied housing units for which the cost to substantially rehabilitate exceeds fifty percent of a unit's assessed value;

(d) Upper-story housing for occupation by a homeowner; and

(e) Housing that does not receive federal or state low-income housing tax credits, community development block grants, HOME funds as defined in section 81-1228, or funds from the Affordable Housing Trust Fund.

(1) On or before July 1, 2021, and by each July 1 every two years thereafter, each city shall electronically submit a report to the Urban Affairs Committee of the Legislature detailing its efforts to address the availability of and incentives for affordable housing through its zoning codes, ordinances, and regulations. Such report shall include, but not be limited to:

(a) An overview of the city's current residential zoning requirements;

(b) The percentage of areas within the corporate limits of the city zoned for residential use which permit the construction of multifamily housing and middle housing, including whether such areas are zoned specifically for residential use or generally allow residential use, and whether such construction is permitted with or without any additional permit requirements;

(c) A breakdown of new residential construction within the corporate limits of the city over the previous five years, including the percentage of such construction that was single-family housing, multifamily housing, and middle housing;

(d) A breakdown of residential units annexed by the city over the previous five years, including the percentage of such units that were single-family housing, multifamily housing, and middle housing;

(e) An estimate of the per-unit cost of housing within the corporate limits of the city;

(f) Whether such zoning codes, ordinances, and regulations provide for density bonuses or other concessions or incentives which encourage residential density, and the frequency with which such bonuses, concessions, or incentives are utilized;

(g) Whether such zoning codes, ordinances, and regulations allow the construction of accessory dwelling units;

(h) What incentives the city applies to encourage the development of affordable housing, including both direct incentives and regulatory relief;

(i) The percentage of areas within the corporate limits of the city zoned for residential use which have been declared substandard and blighted areas under the Community Development Law;

(j) The percentage of areas within the corporate limits of the city zoned for residential use which have been declared extremely blighted areas under the Community Development Law;

(k) A demographic analysis of the city with trends and estimates of the housing need classified by housing type and price range; and

(l) Efforts to adopt an affordable housing action plan as required under section 19-5505 or efforts to implement an affordable housing action plan after such plan is adopted.

(2) The Urban Affairs Committee of the Legislature may require any city to present its report to the committee at a public hearing.

(1) On or before January 1, 2023, each city with a population of fifty thousand or more inhabitants shall adopt an affordable housing action plan. On or before January 1, 2024, each city with a population of less than fifty thousand inhabitants shall adopt an affordable housing action plan. Such action plan shall include, but not be limited to:

(a) Goals for the construction of new affordable housing units, including multifamily housing and middle housing, with specific types and numbers of units, geographic locations, and specific actions to encourage the development of affordable housing, middle housing, and workforce housing;

(b) Goals for a percentage of areas in the city zoned for residential use which permit the construction of multifamily housing and middle housing;

(c) Plans for the use of federal, state, and local incentives to encourage affordable housing, middle housing, and workforce housing, including the Affordable Housing Trust Fund, the Local Option Municipal Economic Development Act, tax-increment financing, federal community development block grants, density bonuses, and other nonmonetary regulatory relief; and

(d) Updates to the city's zoning codes, ordinances, and regulations to incentivize affordable housing.

(2) An affordable housing action plan required under subsection (1) of this section may be adopted as part of a city's comprehensive plan or as a separate plan.

(3) Each city that adopts an affordable housing action plan as required under subsection (1) of this section shall electronically submit a copy of such plan to the Urban Affairs Committee of the Legislature.

(4) Any city which fails to adopt an affordable housing action plan as required under subsection (1) of this section shall be required to allow the development of:

(a) Middle housing in all areas in the city zoned for residential use that allow for the development of detached single-family dwellings; and

(b) A duplex on each lot or parcel zoned for residential use that allows for the development of detached single-family dwellings.

(5) A city shall amend any building zoning ordinances or regulations as needed to comply with subsection (4) of this section.

Nothing in the Municipal Density and Missing Middle Housing Act shall be construed to prohibit any city from:

(1) Regulating the siting and design of middle housing provided for under section 19-5505, except that such regulation shall not prohibit or have the effect of physically precluding the development of middle housing in any residential area; or

(2) Allowing single-family dwellings in areas zoned to allow for single-family dwellings.