Kentucky Housing Task Force 2.0 Seeking ‘Real World’ Changes

The Kentucky Housing Task Force is meeting once again in Frankfort over the interim session, with hopes of coming up with more practical and less ideological solutions to the housing crisis.  

Senate Housing Task Force Co-Chair Senator Robby Mills, R-Henderson, led the first meeting of the task force, which heard testimony from the Kentucky Housing Corporation (KHC), Pew Charitable Trusts, and Bluegrass Institute for Public Policy Solutions. 

Statewide Housing Gap and Challenges 

KHC Deputy Executive Director Wendy Smith told lawmakers Kentucky faces a housing supply gap of over 206,000 units, split evenly between affordable rental housing and homes for ownership across all price points.  

Smith emphasized that “every county needs more housing” and warned that a continued shortage will hinder the state’s ability to compete for jobs and economic growth. 

The construction industry, still lagging since the 2008 recession, remains sluggish, further contributing to the housing shortfall. Smith said the housing gap across the country is large, and states are competing for construction companies; the winner of the housing build up, she said, will attract jobs.  

Simultaneously, homelessness in Kentucky has increased 11% this year and 10% last year, with Smith cautioning that federal funding for homelessness programs could face significant cuts. 

Many states are beginning to pass bills and push measures to accelerate home building within their borders. Some states are passing bills that offer down payment assistance, while others are moving toward workforce housing programs and employer-assisted housing matches. States like Indiana and Ohio have leveraged their state budgets to attract more housing opportunities.  KHC recommended that Kentucky work on an affordable housing trust fund and state housing tax credit. Also, they said lawmakers could consider allocating dollars to the rural housing trust fund, which had a one-time budget allocation of $5 million in FY26.  

Establishing flexible resources that accelerate housing production like incentivizing public-private partnerships with things like revolving loan funds, economic development tools (incentives) for housing, and employer- assisted housing, Smith said is a way to get Kentuckians and those looking to locate in the bluegrass into homes.  

Controversy Over Local Control 

Another suggestion that city leaders should be aware of would be preempting local zoning laws. Nolan Gray, a California researcher who spoke on behalf of Bluegrass Institute for Public Policy Solutions, says that is part of a solution he would recommend.  

“In many cities and counties, local zoning often doesn’t allow the types of housing a state like Kentucky needs to build,” Gray said, warning that Kentucky can’t turn into California, where he lives.  

 He also stated that local building permitting and fees are factors contributing to increased housing costs. The Kentucky League of Cities Board of Directors has voted to engage on the important topic of housing and will be prepared to be a primary participant in conversations regarding the housing shortage. KLC supports housing policies that ensure land use laws and planning and zoning regulations are made at the local level and based on both local goals and values. However, KLC opposes any effort to preempt or mandate outcomes in local land use decisions, advocating instead for locally driven solutions that reflect community values. 

A presenter from Pew said simplifying office-to-residential conversions, especially in areas with unfilled office space, could be a way to provide housing without changing zoning laws.  

The task force will continue to meet over the interim session, with legislative recommendations expected later this year.