Lexington needs an additional 22,780 housing units in the next eight years to fully meet the demand of a projected influx of 40,000 new residents by 2025, according to the final report on housing demand.
Released Wednesday, the report concludes that projected housing demand includes the need for 15,160 new single-family detached houses, 6,275 apartments and 1,345 condominiums and “other units” by 2025.
That works out to more than 3,000 new housing units per year, which would require more than doubling current production levels.
The study, which was sponsored by Fayette Alliance, home builders, Realtors and local government agencies, does not make pricing and economic predictions.
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However, Fayette PVA David O’Neill said in a news release accompanying the study that “continued failure to keep pace with demand will drive up housing costs and place the heaviest burden on those at lower incomes. ... The poor, working class and millennials are increasingly looking to surrounding counties for better affordability. Jessamine, Madison and Scott counties are growing faster than Fayette, especially Scott by a factor of 2 1/2 to 1.”
Susan Speckert executive director of the Fayette Alliance had argued in an op-ed published in the Herald-Leader and on Kentucky.com in March that the community should respond to changing demographics by recommitting to infill and redevelopment as its primary growth strategy.
“Done in an intentional and planned way, infill and redevelopment is sustainable and ensures continued investment into and improvement of our city while protecting our iconic Bluegrass landscape,” Speckert wrote.
Although the final version of the study says that Lexington’s “eds and meds” sector — school, college, university and health care — is thriving, Fayette County jobs are increasingly filled by commuters.
In 2014, less than half of all jobs located in the county were filled by Fayette residents, compared with 61.1 percent in 2002.
O’Neill also said that the housing shortage is driving home buyers and investors into neighborhoods in and around Lexington’s urban core, displacing current residents, increasing housing prices and decreasing the number of affordable housing units.
For single-family homes, the median price for homes purchased with a 1/4-acre to 1/2-acre lot from 2011 to 2016 was $232,500. The least costly single-family median home price for that period was for townhomes, at $140,953; however, the number of townhomes sold runs far behind the number of single-family homes.
The number of affordable apartments is also on the decline because of increasing rents, but even rental vouchers and redeveloped units are not coming close to bridging the gap, the report notes.
“As a community we have a duty to address these complex and interrelated issues in the 2018 Comprehensive Plan update, regardless of whether we increase the availability of build-able land through expansion of the Urban Service Area, we must proudly and rapidly improve our strategy for incentiving and increasing infill, redevelopment and urban density,” O’Neill said in his release.