FRANKFORT, Ky. — As Kentuckians confront rising rents, a scarcity of starter homes, and an uptick in homelessness, legislators appear poised to take significant steps in the 2025 session to address what many observers have called a “housing crisis.” During a series of interim meetings culminating November 12, the Kentucky Housing Task Force examined causes of the state’s ongoing housing shortfall, weighing potential proposals that could shape legislation when the General Assembly convenes. A Growing Shortage Testimony and data presented to the task force showed a gap of roughly 206,000 housing units across Kentucky, spanning everything from subsidized apartments to single-family starter homes. Many stakeholders emphasized that the shortage particularly affects seniors, lower-income families, and people with disabilities, who can be left cost-burdened or pushed into homelessness. According to the Kentucky Housing Corporation (KHC), the shortfall could rise to an estimated 287,000 units over the next five years if present trends continue. One official from KHC underscored the economic implications by noting that “homes are where jobs go to sleep at night,” suggesting that without sufficient housing, a growing workforce may not find suitable places to live, and employers could seek opportunities elsewhere. Some regional leaders voiced similar concerns, especially where job creation has begun to outpace homebuilding, leaving workers without housing options aligned to local wages. Possible Legislative Solutions The upcoming legislative session could see an array of bills drawing from ideas and testimony heard by the task force: Regulatory Reforms – Several stakeholders, including the Kentucky Chamber of Commerce, attributed high construction costs partly to zoning complexities and local resistance to higher-density housing. Streamlining these processes might reduce delays and expenses. State-Level Housing Tax Credits – Many presenters advocated establishing a state Low Income Housing Tax Credit to supplement federal credits. Most surrounding states already offer such incentives to increase private investment in affordable housing. Starter Home Incentives – Building-industry representatives pointed to Ohio’s new single-family housing tax credit as a model. A similar program in Kentucky could encourage the construction of smaller, entry-level homes for middle-income families. Infrastructure Investments – Following the example of Indiana’s Residential Infrastructure Fund, task force members said Kentucky could create a dedicated fund or low-interest loan program to help local governments finance roads, utilities, and other infrastructure essential for housing development. Expanding Local Land Banks – Affordable-housing advocates urged legislation that would allow nonprofits to purchase tax liens on vacant or abandoned properties for redevelopment. They noted that unused lots, particularly in urban areas, could become new sites for workforce and affordable housing. Enhanced Homelessness Services – Various organizations also asked lawmakers to consider eviction-expungement measures, more robust matching of federal housing grants, and greater support for the Kentucky Affordable Housing Trust Fund. Impacts of Natural Disasters A Kentucky National Guard flight crew from 2/147th Bravo Co. aided in flood relief efforts in response to a declared state of emergency in eastern Kentucky on July 29, 2022. Their mission consists of supporting Soldier movement, joint support transport, delivery of emergency supplies, and surveying flooded areas looking for Kentucky survivors. (U.S. Army National Guard Photo by Sgt. Jesse Elbouab) Though housing costs and shortages affect communities statewide, they have been felt acutely in regions hit by the 2021 Western Kentucky tornadoes and the 2022 Eastern Kentucky floods. Local officials noted that around 5,000 housing units were damaged or destroyed by these disasters—an added strain on a market where construction is already running behind demand. Local Perspectives Lexington mayor Linda Gorton testifies before Kentucky Housing Task Force. (Kentucky League of Cities) Throughout the interim, leaders from both rural and urban counties described chronic underbuilding relative to job growth, rising rental costs, and steep prices for starter homes. Lexington Mayor Linda Gorton discussed efforts to expand the city’s urban service boundary and update zoning laws to accommodate a broader range of housing types. Meanwhile, Louisville Mayor Craig Greenberg’s office has stressed the importance of linking housing reforms with broader economic development efforts. Outside the state’s largest cities, regional officials—from northern Kentucky to Hardin County—highlighted similar challenges, asserting that permitting and infrastructure barriers can slow the pace of new construction. They also pointed out that major economic projects, such as new manufacturing facilities, often require rapid increases in local housing capacity—something that can prove difficult without state-level assistance. Lawmakers’ Next Moves FRANKFORT, Aug. 26 – Rep. Lindsey Burke, D-Lexington, asks a question about expanding the Lexington-Fayette County Urban Services Boundary Development during the August meeting of the Kentucky Housing Task Force. (LRC PIO) Members of the task force broadly agreed that Kentucky’s housing shortfall stems from multiple factors, including a shrinking pool of construction workers after the 2008 financial crisis, a spike in building costs and interest rates, and persistent regulatory obstacles. Sen. Jimmy Higdon, R-Lebanon, indicated his plans to file legislation focusing on affordable housing, while Rep. Susan Witten, R-Louisville, said she was proud of the “comprehensive” approach the task force took, explaining that no potential policy idea was left off the table. With the task force’s final report released, legislators and stakeholders have called for swift action to address what they deem a critical shortage of affordable options. Many stressed that safe, stable housing is a key ingredient for community well-being and economic progress—and that the status quo risks leaving vulnerable Kentuckians further behind. For the legislative session ahead in 2025, momentum seems to be building around bipartisan solutions that might reduce housing costs, spur construction, and bolster both urban and rural areas. How far those efforts will go remains to be seen, but the Task Force’s findings have sparked a sense of urgency among many who say Kentucky can’t afford another year of inaction in the face of a deepening housing crunch. The post What action might lawmakers take in 2025 to address Kentucky’s housing crisis? appeared first on The Lexington Times.