LA GRANGE Ky. — A new report says Kentucky is facing a housing shortage.
The Kentucky Chamber Center for Policy and Research and the Home Builders Association of Kentucky estimate the state is short as many as 206,000 homes.
Forty new homes are coming to La Grange in Oldham County and of the 29 already built, all but one have been sold in the last year.
“So, it shows the demand, there is nothing comparable to this product in the area that we are in Oldham county right now … and clearly based upon the sales this is a strong need,” said Bill Doelker, owner of Key Homes LLC.
One factor Doelker said contributing to the deficit in housing is the labor shortage.
“Mechanical trades, electric heating and air and plumbing, all three of the ones we use are constantly looking for people. So they never, over these last three years, have ever been able to get to a fully staffed company,” he said.
On top of that, the cost of materials is a challenge, forcing Key Homes LLC to raise the cost of these homes three times in the last year.
“Lumber can be very cyclical when it goes up and down and it’s not bad right now, but that’s only one component of the house where everything else that we’ve got material wise, has gone up, you know, shingles, siding,” Doelker said.
The Kentucky Chamber Center for Policy and Research said after the 2007-2008 financial crisis, home building declined by 45% and struggled to catch up.
“We have to make up that deficit and that’s really hard to do because keep in mind, as all this was happening, our population was continuing to grow and so demand for housing was increasing, increasing and increasing, whereas actual homebuilding was declining or stagnant, and then, eventually started to pick up again,” said Charles Aull, executive director for the Kentucky Chamber Center for Policy and Research.
The report is calling for several solutions, including changes to zoning rules and government regulations, plus better leverage and support for housing funding programs.
“If you’re restricting, you know, say, setback requirements, if you’re imposing esthetic requirements or if there is outright prohibitions on things like duplexes, triplex, townhomes, patio homes, if we’re prohibiting those things, those are really good options for middle-income families and also for some low-income families,” Aull said.
Even if those reforms were to happen, Aull said the shortage will not be fixed unless there are people to build new homes.
“We’ve got to create an incentive to help get the workforce for the skilled trades where it needs to be, you know, whether that’s funding for some of the schools … and you know incentivizing businesses you know maybe from a tax standpoint,” said Doelker.
The report said the state may need to build over half a million new units by 2050 to keep pace with the growing population.
The United States Department of Housing and Urban Development said in its quarterly report that the number of single-family units permitted in Kentucky increased by 19% in the first quarter of 2024 compared to last year’s first quarter. But the number of multi-family units permitted in the commonwealth decline by 14% compared to last year’s first quarter.