In final hour, KY lawmakers could not agree on housing bill. Here’s what was in it
Updates to Kentucky’s housing construction process, rules for short-term rentals, guidelines for eviction record expungement and other reforms aimed at reversing the commonwealth’s housing shortage have stalled in the statehouse.
Almost a dozen pieces of housing policy wrapped into one massive bill at the last minute didn’t cross the veto-free threshold last week as lawmakers worked to agree on what they wanted to send to the governor’s desk.
The bill, Senate Bill 9, originally would have only given local governments the ability to use funding and other tools to support large residential developments in their communities, as well as their infrastructure and utility needs. But it was changed drastically from just 15 pages to 60 by a committee substitute that added parts of at least 10 other housing-related bills.
What was in Senate Bill 9
On the House floor Wednesday, members adopted the committee substitute that included concepts from 10 other pieces of legislation across 26 sections to the bill sponsored by Sen. Robby Mills, R-Henderson. They then voted 71-21 to pass Senate Bill 9 as amended. The Senate did not take action on the bill.
Those additional concepts were part of bills originating from both chambers, some of which were passed unanimously by one body and sent to the other, where they died, before the final day Hail Mary to include them in the omnibus bill.
Some included vested development rights, which lock in zoning and development rules for projects at the time of application.
There was also a section from another bill — that in its entirety is referred to in other states as the “Starter Home Act” — to streamline permitting and allow for third-party inspections. Another part of that same bill, to allow multifamily and other middle housing in commercially zoned areas, was added in the substitute.
Part of the committee substitute dealt with occupancy restrictions. Another section added parking reform from another bill, including capping local parking mandates at one space per unit and eliminating minimum parking for affordable housing, assisted living and other types of homes.
The substitute also added language that said local governments could not ban short-term rentals in residential zones, could not cap density or spacing, could not require conditional use permits and could not impose residency rules.
The final sections of the substitute added parts of a bill that passed the House unanimously that would automatically remove an eviction from someone’s record if the case was dismissed and protected minors from being named as defendants in evictions.
Why Senate Bill 9 didn’t cross the finish line
Following the final hours of concurrence April 1, Speaker of the House David Osborne, R-Prospect, told reporters he was under the impression the other chamber was on board with the changes that had been made. Supposedly, he said, that wasn’t the case.
“We were told that the Senate thought it was too much at once,” Osborne said. “Which I don’t really understand, because each of those individual components had been bills that were filed in the Senate. We thought we had communicated.
“The plan the entire time was to have all those bills filed individually again in the Senate ... and then move them as one kind of omnibus bill, and apparently they were struggling to get everybody up to speed about it,” he said.
The Kentucky Housing Task Force’s co-chairs — Sen. Robby Mills, R-Henderson, and Rep. Susan Witten, R-Louisville — did not immediately respond to requests for comment. The pair have led the special legislative committee made to address the state’s housing shortage for the past two interims and sponsored much of the legislation that was tacked onto the end of Senate Bill 9.
Gov. Andy Beshear said April 2, in his weekly news conference, he had not reviewed the policy in its final form but that his office and the legislative branch have spent a significant amount of time studying housing, including working with the Kentucky Housing Corp. to find and fund solutions.
“What my budget proposed, and I continue to push, is we don’t need a new program. We just need the political will to invest in programs that we already have that work,” he said.
What housing policy did pass
As part of the one-time spending bill, House Bill 900, lawmakers agreed to put $5 million into the state’s Affordable Housing Trust Fund over the next two years — an appropriation significantly less than Beshear’s ask of $150 million.
The trust fund is administered by the Kentucky Housing Corp. and helps fill financial gaps for developers and homeowners in building and accessing affordable housing. Money in the fund also supports local nonprofits and local governments in housing projects and repairs to existing units.
Louisville received more funding than Lexington in the one-time spending measure, including roughly $90 million that the city’s government is meant to put toward downtown revitalization projects such as the Community of Care Campus and an effort to turn some vacant office space into residential spaces.
The Community of Care Campus is expected to open next year and is a tight-knit area of resources, on the edge of downtown Louisville and near the city’s hospitals, that provides housing, health care and more to residents experiencing homelessness.
The city’s government was allocated $2.5 million for an affordable housing project in West Louisville that will rehabilitate land previously used by a chemical manufacturing company that has sat vacant since 1994.
No money allocated to Lexington in the one-time spending bill was earmarked specifically for housing-related endeavors.
The General Assembly did pass House Bill 333, which allows religious institutions to bypass local planning and zoning rules to put affordable housing on property it owns, so long as a local body approves of the project.
Lawmakers also delivered House Bill 542 to the governor, changing communications requirements for those involved in an eminent domain cases, when the government takes private property for public use like highways, schools, utilities and even housing.
What happens next to Senate Bill 9
The legislation, like several others, hangs in the balance while lawmakers are in recess to allow the governor to veto bills they did pass.
Once they gavel back in for the final two days of session April 14 and 15, lawmakers can override those vetoes and in the process, make their last attempts at getting bills across the finish line.
Any bills they pass in those last days could be sent to the governor for his signature, but if he issues a complete or line-item veto, lawmakers no longer have the opportunity to override it.
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