PAWNEE CITY — You’ll know you’re getting close to town when you pass Alphia, a pet food manufacturer and one of the largest employers in the area. 

Then you’ll see the sign, welcoming you to the cutest little town in Nebraska, and also the home of Larry the Cable Guy. 

Just past the water tower, turn right. It’ll take you by the pool, the park, the daycare. 

And then you’ll see the house for sale: A three-bed, two-bath new build, complete with a two-car garage, massive basement and stainless steel kitchen appliances. 

And, a $60,000 discount, bringing the $319,500 price tag down to $259,500. 

Next door is another house sold this summer with the same markdown, bought by a couple that came to this community of 865 by way of Tennessee. 

A year ago, the Pawnee City Community Foundation announced a new plan to recruit new residents: Buy a home in Pawnee City and we’ll give you $50,000 in down payment assistance. The aid was recently upped to $60,000 with a new infusion of funds. 

The program blew up — news articles sparked thousands of website hits in a matter of days. Some 1,400 people signed up for more information, enticed by the idea of a $50,000 incentive. The city office fielded hundreds of calls for a program they had zero involvement in. 

Since then, the community foundation has built two houses under the program, with plans for a third. 

It has sold only one. The Tennessee family moved in earlier this summer. 

For decades, Nebraska small towns have tested ways to attract new people — and new homes — to keep their tiny communities afloat, even on the smallest of scales. They have dangled down payment assistance, offers of cash if you move to town, free land in exchange for building a house. 

Like much of the country, rural Nebraska saw a downturn in home construction during the recession that threw supply and demand out of whack. A post-pandemic upswing in prices has made it harder than ever to afford a home. In rural communities, labor can be hard to come by, and transporting materials makes it even more expensive to build. The homes that are for sale are cheaper than city living — but they’re also more likely to be older and in need of serious repair. 

“Many people, myself included, would say, ‘Boy, you think the free market would just solve the problem,” said KC Belitz, former head of the state Department of Economic Development. “But because of those different layers, it just hasn’t. And so there has needed to be some sort of incentive. Most of the time, that’s dollars.” 

*** 

It started with an article on Realtor.com. Then Yahoo News. The New York Post. Newsweek. Business Insider. 

“The US city offering $50,000 to move there,” headlines read. 

The calls and emails flooded in. 

There was the college kid who wanted to homestead and farm after graduation — did the city have any nursing positions he could fill? 

Then the man from Pakistan, wanting to escape political and religious turmoil with his wife and three kids. He could teach, he offered, or drive for Uber. He even offered up his “understanding of international affairs for his excellency the mayor.” 

A man in Arkansas wondered how he would get paid and whether the articles he had read were true. A woman asked if it was $50,000 per person. A South Carolina family with six children hoped for a new start after a storm caved in their ceiling. 

What all these emails — and the viral news articles prompting them — got wrong: The city wasn’t just handing out $50,000 checks to anyone moving to Pawnee City. 

The now-$60,000 incentive comes in the form of a 0% interest no-payment loan through the Pawnee City Community Foundation. 

That loan is income-restricted to families at or below 120% the area median income, currently $86,700 for a family of two. And it applies only to the three houses the community foundation built with a $640,000 Department of Economic Development grant. 

It’s essentially “a second mortgage for as long as they own the house,” said Suzanne Borcher, secretary for the community foundation. “Once they sell that, that money is paid back to us and it goes back in the pool so that we can do it again for somebody else.” 

It’s only three houses for now, but it’s a right-sized start for the town. It would be impossible for Pawnee City to build the same number of homes as Grand Island or North Platte, Belitz said. 

“But they don’t need the same number of houses,” he said. Small towns have “made real progress in their local housing market using many of the same tools. The number of units is just going to be different, and that’s OK.”

The hope, Borcher said, is to grow a rolling fund to build more workforce housing. Enough to encourage people to live in Pawnee City and work at the local hospital, school or Alphia; or commute to the prison 20 miles away in Tecumseh or to nearby manufacturers.

But no one read the fine print. Calls inundated the city office, City Clerk Tammy Curtis said. 

Will you really pay me $50,000? No. 

How far is the closest big town? An hour and 20 to Lincoln and an hour and 40 to Omaha. 

The closest Walmart? Forty-two minutes away in Beatrice. 

Is there a hospital? A school? Yes to both. 

Most of them knew nothing about the town, Curtis said. 

At a City Council meeting weeks after the media storm, Steve Glenn, then-chairman of the Economic Development Council for the city’s Chamber of Commerce, reported the stats: 17,000 visits to the program’s website in the past 30 days; 572 forms from interested parties. 

“But you don’t have to have the headline in bold saying we’re going to give a person $50,000 to move here to Pawnee City,” council member Donnie Fisher said, according to meeting minutes. 

The down payment assistance program generated more PR in a month than in the entire 168-year history of the town, Glenn said. 

“So don’t make it a downer, as you should all be saying ‘Hallelujah!'” he said. 

***

The actual real estate scene in Pawnee City is sparse: 11 homes listed for sale in early September, one of them an empty lot.

There’s the bright blue Victorian in need of serious repair, listed at $59,000 after a $30,000 price cut. A 1920s craftsman going for $279,000. A $200,000 property with a 3-bedroom house, greenhouse, barn and pasture. 

The one community foundation home for sale for $319,500 is the most expensive on the market. It’s the closest thing to a spec home the town has seen in years, said real estate agent Jeff Fink. 

While the homes are often cheaper in rural Nebraska than urban hubs, the trade-off is that there are far fewer options, and they’re on average older. 

There are developers willing to build custom homes if you have the money, Fink said. But speculative homes — when a developer builds without a contracted buyer — are rare. 

That’s the reality for much of rural Nebraska. 

Nebraska faces a housing shortage of about 120,000 homes, according to a 2024 legislative report. And that strain unevenly hits rural parts of the state. 

Some roadblocks to building are universal. Materials are costly. Home prices are growing at a rate that can’t keep up with wages. 

And then there are the more rural-specific challenges: lack of developers, contractors and construction workers; the cost of getting already expensive materials out to remote areas. Trying to build new neighborhoods turns risky fast.  

“It’s about de-risking those projects,” Belitz said. “There are only so many developers and contractors doing work in Greater Nebraska, so they’re going to go where they have the lowest risk or the highest rate of return. And why wouldn’t they? That’s business.” 

And every year, aging homes set Nebraska even further back, Belitz said. 

Not all vacancies are bad. A vacancy rate of about 5 to 10% is considered healthy. Statewide, Nebraska is there, sitting at 8% according to census data. But when you take out counties with larger cities, the number goes up to 14.5%. It’s as high as 41% in the Sandhills’ Loup County. In Pawnee County, 23.6% of homes are vacant. 

The fix has to be through incentives and funding, whether it’s through the government or development corporations, said Gary Person of the North Platte Area Chamber and Development Corporation. North Platte has approved 20 new housing developments since 2023 — equal to 2,400 new units built or planned. The range of projects includes low-income and workforce housing, senior housing and luxury high-end apartments. There are apartments above downtown businesses and plans for a mobile home subdivision. 

None of that would have happened without incentives, Person said, especially in Greater Nebraska. 

“It just doesn’t get done without it, and no developer will even look at your town if you aren’t aggressive in doing that,” Person said. 

But North Platte is a regional hub, home to 22,524 people. For places like Pawnee City, the approach must be scaled down. 

“You’re building five homes, you really need those five homes to sell,” Belitz said. “It is a different equation.” 

In Pawnee City, the community foundation’s three new homes were built on land cleared by the city’s demolition program. Demolish your old, vacant property and the city and development corporation will reimburse you up to $8,000. Since 2020, the city already has paid out $100,000, Curtis said. 

“It just makes your community look so much better if you don’t have those houses just sitting out there that have varmints coming in and out of them,” she said. 

Elsewhere in the state, communities have taken to modern Homestead Acts to draw people in and build new homes. In Beatrice, residents can apply to own vacant city lots. In exchange, they “earn” the lot by keeping up with mowing, shoveling snow, managing weeds and trimming trees. 

Farther west, the town of Curtis has been giving away free land for about 20 years, so long as the taker promises to build a house on the lot within a year. It has led to about seven homes built, said Doug Schultz, interim city administrator. The city also offers up to $1,750 in cash to families who move there and enroll their kids in the public school. 

“It’s just good to have new construction. We still get a new house out of the deal,” Schultz said. “It’s definitely been slow. But it’s been successfully slow.” 

The village of Elwood does the same. About 20 years ago, the village bought 15 vacant lots and laid the groundwork for a neighborhood that is walking distance from the school. Since then, 10 families — mostly already living in town — have built homes on free land, said Laurie Jauken, village clerk. 

“Once they move from where they were, it opens up a property either in town or Gosper County,” Jauken said. “Every community will say they need housing.” 

There are no other takers on the down payment assistance in Pawnee City just yet. Maybe it will be the man from Maryland, who recently booked a hotel for a week to try the town on for size. Or the couple from Arizona thinking about retiring to Nebraska. Or someone reading this story. 

“The lesson that we should all take from Pawnee City is that people from all across our country really are open to the idea of living in Nebraska, living in a small town,” Belitz said. “We just have to make them aware that that opportunity exists.”