Local governments could issue bonds to encourage multifamily homes under KY Senate bill
Local governments could encourage the addition of badly needed apartments, condos and townhouses by issuing bonds to help cover the private developers’ construction costs under a bill headed to final passage in the Kentucky House.
The House Local Government Committee on Tuesday approved Senate Bill 25.
Under the bill, cities and counties could issue industrial revenue bonds to finance the construction of multifamily housing projects with at least 48 housing units.
Ordinarily, local governments use industrial revenue bonds to finance industrial buildings that create jobs, covering the costs of land, engineering, site preparation, buildings, machinery and equipment.
Local governments aren’t responsible for repaying the bonds; they simply get the borrowers — the private businesses — a lower interest rate, which saves them money. The borrowers repay the bonds using revenue their projects generate.
The Senate bill would expand the category of projects eligible for industrial revenue bonds to include large multifamily housing projects. An earlier version of the bill also would have limited the right to challenge such housing projects to the contiguous property owners, but the Senate dropped that language.
The bill’s sponsor, state Sen. Robby Mills, R-Henderson, said it’s one of several measures that were inspired by the legislature’s 10-member housing task force last year that concluded the state is 206,207 housing units short of what it needs for its population of more than 4.5 million people.
There will be several housing-related bills coming out of this legislative session and next year’s session, too, Mills told the House committee.
“We’re moving forward on this housing issue,” he said.
The committee did not act Tuesday on another housing bill originally on its agenda, House Bill 7, which would let local governments establish “housing development districts.” Within those districts, developers would be given tax breaks and a degree of freedom on planning and zoning rules.
The House bill’s sponsor, state Rep. Josh Bray, R-Mount Vernon, said he needs time to keep working on it.
“Housing continues to be a priority for me as we look for ways to address the shortage,” Bray said Tuesday after the committee hearing. “I am incredibly pleased with the conversations surrounding House Bill 7 and will work on the issue through the interim as we approach next year’s budget session.”
This story was originally published March 11, 2025 at 12:31 PM.
