Kentucky Housing Task Force approves final report

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FRANKFORT, Ky. (FOX 56) — Hours of testimony in Frankfort on the state’s housing crisis have concluded for the year. As lawmakers begin to turn the page, they are eyeing some proposals for the 2025 session.

The task force was the starting point for looking at the issue, understanding it, and hearing from all the stakeholders about possible solutions. The Kentucky Housing Corporation reported that today Kentucky is more than 206,000 housing units short.

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“There are folks who can’t move up from their starter home because there’s not a home that they can afford to buy. There’s folks who five years ago could have become a home buyer in Kentucky, and they cannot afford, you know, a home now even though it wasn’t out of reach just a few years ago,” Wendy Smith told FOX 56.

Smith, deputy director of housing programs for KHC, said there are many factors to the current crisis, chiefly that home construction even in 2024 remains below the average prior to the 2008 financial crisis. Smith said the pandemic compressed most people’s ability to see a crisis over a decade in the making.

“We had interest rates go up, supply chain costs made houses, you know, jump in cost,” she explained.

In Smith’s words, homes are where jobs go to sleep at night. She said a housing shortage hurts economic growth. The task force report has collected many of the recommendations that lawmakers may try in 2025.

“We look at, you know, some statutory changes. We look at tax changes, we look at zoning change, we really looked at everything,” Rep. Susan Tyler Witten said during the final meeting on Tuesday.

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There are some suggestions like state-level changes or incentives to zoning laws, like for example, allowing a tiny home to be built on an existing property without extra legal hoops. Revolving loan pools to pay for the up-front infrastructure work that often slows construction is another possibility. Smith said introducing a state housing tax credit is something several other states have tried and already happens at the federal level.

“We are a bit of an island to not have one,” she said. “It basically gets private investors to invest money into the projects. And for every dollar they invest, they might get, let’s say, a dollar and $0.10 off their federal taxes. And so, you can do a similar thing at the state level, which brings in another source.” As for which proposal works best, smith really can’t say. Many are still very new, but make up the menu of options Kentucky now has to amplify its own response to the housing shortage in the next session.

The full report can be read here.

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