FRANKFORT, Ky. — Addressing the state’s housing gap continues to be at the forefront of some Kentucky state lawmakers’ minds during the interim.

What You Need To Know

  • Kentucky is currently short 206,207 units between rental and for sale homes

  • Housing stakeholders believe the state should offer zoning incentives, state housing tax credits or state funding for housing infrastructure and development  

  • The biggest factor contributing to the housing shortage is a loss of builders as a result of the 2008 session 

  • In the last year 65 housing supply bills were enacted across 20 states 

The Kentucky Housing Task Force met for the second to last time this interim and heard solutions to helping aid the housing problem in Kentucky. Currently, Kentucky is short 206,207 units between rental and for sale homes. The gap is projected to push to 287,120 units by 2029.

Those numbers are according to deputy executive director of the Kentucky Housing Corporation, Wendy Smith. Smith presented the corporation’s supply gap analysis Monday.

“It’s not just our urbanizing counties, and it’s not just our rural or urban, it is really spread across the commonwealth,” Smith said.

Smith said the state should consider zoning incentives, state housing tax credits or state funding for housing infrastructure and development to supplement federal funds. Indiana and Ohio among other states have similar programs.

“It slows us down and we can’t be nearly as nimble in designing our programs as we could be if it was state dollars,” Smith said.

Smith said many factors are contributing to a housing shortage, but the biggest is a loss of homebuilders after the 2008 recession.

“We have never in any year rebuilt, even the average we used to build before the ‘08 recession,” Smith said.

Developers of affordable housing said lack of land, rising construction costs and access to funds are affecting their ability. They also asked lawmakers to consider implementing tax credits and raising the funding to the affordable and rural housing trust funds. Heath Duncan, executive director of Habitat for Humanity Pennyrile Region said those funds have not been funded in recent years to account for inflation.

“Pre-COVID, we could build a Habitat house for $80-90k. Today, that same house with the same materials costs $130,000,” Duncan said.

Darryl Neher, CEO of Lexington Habitat for Humanity said state funds helped support the purchase and eventual transformation of a former Transylvania University baseball field into an affordable housing complex.

George Eklund, director of education and advocacy of Coalition for the Homeless, said homelessness is a housing issue. He said it affect those with the least amount of resources; seniors or anyone on fixed income, veterans and young people.

“We are looking at the need out-passing our capacity to meet the demand that we have, we housed 1,600 people in Louisville last year, we also saw 4,500 people enter homelessness for the first time so this is a growing problem that we are trying to navigate every day,” Eklund said.

In the last year, 65 housing supply bills were enacted across 20 states according to the KHC study.

The last housing task force meeting for the interim will be Nov. 12.

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