Kentucky lawmakers are signaling a major shift in statewide housing policy as a task force recommends loosening construction regulations and boosting public funding to tackle the state’s worsening housing shortage. The recommendations were released Monday in advance of the legislative session that begins in January, urging fast action to accelerate both infrastructure and homebuilding.
A study commissioned by the Kentucky Housing Corp. estimates the state needs more than 200,000 additional housing units to meet demand. Without intervention, the shortage could balloon to over 287,000 units by 2029, with low-income renters suffering the greatest burden.
Rep. Mike Clines, R-Alexandria, told fellow lawmakers that it’s time for legislative action.
“I do think it’s time for us to really write some legislation that’s going to make some changes for our housing shortage,” Clines said.
The task force’s nine-page memo suggests several regulatory reforms aimed at reducing costs for housing developers. Key proposals include:
Another recommendation encourages religious institutions to build housing on their own land with less regulation, echoing a bill introduced—but not passed—during the last session.
The task force noted that these proposals would add to regulatory changes already passed this year, including a new law preventing local governments from restricting manufactured housing.
Sen. Robby Mills, R-Henderson, co-chair of the task force, said lawmakers must balance deregulation with respect for local control, but emphasized that the housing crisis demands urgency.
“We’ve got to allow more building to take place in Kentucky. And if it doesn’t happen then we need to step in, or we’re going to be, once again, falling behind,” Mills said.
“I do believe the locals need to have an opportunity to act and react.”
The memo goes beyond regulation, recommending the General Assembly consider state funding incentives, especially a revolving loan fund to support housing infrastructure, modeled after Indiana’s program. Another proposal calls for a state low-income housing tax credit to match an existing federal credit.
Housing advocate Adrienne Bush, executive director of the Homeless and Housing Coalition of Kentucky, said she was encouraged by many of the recommendations, especially the proposal to increase revenue for the Affordable Housing Trust Fund, which supports low-income construction and repairs.
“We have this proven tool. It’s been working well for Kentucky,” Bush said. “It just really hasn’t kept pace with what is needed to build and repair and renovate.”
Bush noted that despite fiscal pressure on the state, investment is crucial.
“It is becoming clearer, clearer and clearer every day that without state financial intervention, Kentucky is going to continue to fall further and further behind in terms of our housing stock,” she said.
Mills warned tough budget choices are coming. Medicaid and large government expenditures could swallow funds, but he vowed to fight for housing support.
“A lot of things will fall on the cutting floor because of the cost of Medicaid and other large ticket items,” Mills said, adding he still plans to push for affordable housing incentives.
Originally reported by Liam Niemeyer in Kentucky lantern.
