Kentucky’s economic progress could be stalled by our housing crisis | Opinion

Kentucky is currently at an economic crossroads. State leaders have prioritized economic growth and workforce development by attracting new business investments and implementing public policies. However, a major obstacle stands in the way of Kentucky reaching its full potential – housing.

Earlier this year, the Kentucky Chamber and the Home Builders Association of Kentucky partnered together to release a report titled “Building a Foundation for Growth: Meeting Kentucky’s Current and Future Housing Needs,” outlining the significant housing challenges facing communities and families across the state. About one-third of Kentucky’s housing stock is more than 50 years old. Home prices have surged compared to incomes, with median sale prices in some metro areas now five times higher than median household incomes. Overall, the housing shortage in Kentucky may be as high as 206,000 units statewide.

These challenges are already affecting economic growth, according to local leaders surveyed during the Chamber’s statewide listening tour last year. Two-thirds of Kentuckians stated that their communities are being held back by housing challenges, and nearly 90% said their communities could not meet housing needs if a major project were announced. By 2050, Kentucky may need over half a million new housing units to maintain a healthy housing market and keep up with population growth.

Kentucky’s housing crisis stems from several factors. After the 2008 financial crisis, home-building slowed by 45%, even as the population grew. The result: fewer homes and skyrocketing prices. Local zoning rules, excessive regulations, and labor shortages in the construction trades are also key factors in Kentucky’s housing challenges.

This issue is not going unnoticed. The Kentucky legislature recently released its housing task force report, which aligns closely with our report’s recommendations and underscores the urgent need for action. With the 2025 legislative session on the horizon, now is the time for lawmakers to take meaningful steps to address these challenges. The task force’s findings affirm our call for a bold, collaborative strategy to expand housing availability, reduce costs, and meet the needs of our growing economy.

The good news is that Kentuckians want state and local leaders to act. More than 75% of community leaders support new housing developments, even near their own homes, and 86% say policymakers must do more to boost home construction and address the housing shortage.

Meeting our housing needs will require a multipronged approach:

▪ Empowering cities and counties to reform restrictive land use and zoning rules that hinder home building

▪ Reviewing regulations driving up housing costs and providing incentives to build affordable homes for working families

▪ Making strategic investments in housing infrastructure like roads, water, and sewer systems

▪ Expanding our construction workforce through high schools, colleges, and enhanced training programs

Kentucky’s economy has reached new heights, with new jobs, investments, and growth on the horizon. However, we cannot sustain this momentum without addressing the critical housing shortage.

Without adequate housing options, Kentucky risks losing skilled workers to other states, undermining the critical investments we have made in workforce training and business recruitment.

The legislative session in 2025 presents a pivotal opportunity for state leaders to work collaboratively with employers, home builders, and local governments to build on the recommendations of the housing task force and deliver solutions for communities across the Commonwealth.

Now is the time to build the foundation Kentucky needs to support our current and future population. Housing is crucial to our growth, and we must address our housing needs as we strive to make our state the best in the nation to live, work, do business, and raise a family.

Ashli Watts, President and CEO of the Kentucky Chamber of Commerce, and Anetha Sanford, Chief Executive Officer and EVP of the Home Builders Association of Kentucky.