Twenty years ago, Lexington added 5,400 acres to its Urban Service Area — the boundary that includes city services and effectively the line that determines how many new homes will be built.
That’s the last time land was added to the Urban Service Area.
In 2006, the Urban County Planning Commission considered, but ultimately rejected, adding areas including a 2,000-acre parcel along Winchester Road outside I-75 and several parcels along Richmond Road inside I-75. The commission also rejected the idea of including 7,500 acres as an “urban reserve” for possible expansion.
The only planning commission member at the time to vote against the lack of expansion, builder Michael Cravens, warned that not expanding would drive up prices in Fayette County and told those who wanted a house in Lexington “to get one while you still can.”
With the housing market finally emerging out of the 2008 recession, some are saying it’s time for Lexington to consider more space for home building — as buyers bleed into fast-growing Scott, Jessamine and Madison counties.
So far in 2016, Fayette County has issued 445 single-family building permits while Scott has issued 336, Madison 235 and Jessamine 129.
Inventory in the Fayette County housing market is low, according to Elaine Hangis, chief executive officer of the Lexington-Bluegrass Association of Realtors.
“But inventory is low in all of our market, it’s low nationwide,” Hangis said. “They (city government) talk about all the acres that are available, but a lot of it is infill. So a lot of business is going to Scott County, Jessamine County, where the zoning is not as strict as it is in Fayette County.”
Although Scott is Kentucky’s fastest-growing county, Jessamine County also frequently appears in the area’s new-home listings at what is called the “entry” price point for buyers: $200,000 and under.
In fact, if you take Fayette County’s projected growth over the next 20 years — from 315,249 to 396,970, more than 81,000 — you’ll find it’s just about even with the combined growth of the three surrounding counties with which it is competing for residents who need homes.
Scott County is projected to grow from around 55,000 in 2015 to 91,779 in 2035. Jessamine County expects similar, if less robust, growth: up from 53,645 in 2015 to 73,722 in 2035. Madison County is also expecting robust growth: from 89,055 in 2015 to 113,562 in 2035.
Home builders say they are feeling the pinch, too. “We’re running out of developable land in the Urban Service Area,” said Todd Johnson, executive vice president of the Home Builders Association of Lexington.
In Scott County, for example, “Land is definitely more available and cheaper there than in Fayette County. But there are trade-offs: Are you tied to where your job is? ... But the thing about these counties is, even Clark County has seen a really good boom in those outlying areas — Clark, Scott and Madison have seen some good economic growth,” Johnson said.
Ty Brown of Weichert Realtors-Towne & Country, is president-elect of the Realtor group. He said that Georgetown lists “lately have done very, very well. ... Lot costs are less there, so the end price of the home is cheaper — or the home buyer can get an amenity such as a bigger lot.”
Dennis Anderson of Anderson Communities, who works in both counties, said, “We’re doing more work in Scott County today than in Fayette County.”
He’s building 40 houses in both counties, but is also building 336 apartments in Scott County.
His Townley Center homes in Lexington are completed, Anderson said, but the company is still building in McConnell’s Trace off Leestown Road. His developments in Scott County are Sutton Place and Amerson Orchard.
While Realtors and builders may be feeling a pinch, since 1996 city officials haven’t seen a need to expand the Urban Service area and some wonder if they will now.
The city’s comprehensive plan is reconsidered every five years.
In 2013, “The planning commission felt there was enough vacant land and infill opportunities,” said Lexington planning director Jim Duncan.
There’s still developable acreage within the expansion area, Duncan said, including the 900-acre Overbrook Farm on Delong Road in south Lexington. Some smaller parcels of land, he added, are still undeveloped because of “challenges” such as environmental concerns.
Within the next few months, Lexington city planners will start taking input on the 2018 comprehensive plan update, and would not be surprised to see requests for additional land to be developed for houses.
Mayor Jim Gray was noncommittal about adding additional land. While he said in a statement “it only makes good sense to take a good look at community needs, today and in the future,” he made no commitment to supporting either the growth-is-good or growth-destroys-Bluegrass side.
“When we start the Comprehensive Plan process we will continue to emphasize the importance of infill development, but also examine whether there is a need to expand the Urban Services Area, both in terms of residential development, but perhaps more importantly to encourage job growth and economic development,” Gray’s statement said.