As Kentucky continues to face a growing housing shortage, the business community is urging lawmakers to treat housing as a top economic issue. During two legislative hearings this week, Chamber leaders explained how the lack of housing is holding back economic growth, raising costs, and making it harder for communities to attract new jobs. The Chamber is actively encouraging legislators to explore a model program in Indiana called the Residential Infrastructure Assistance Program as a key solution.
John Hughes, Public Affairs Director for the Kentucky Chamber, spoke to the General Assembly’s Interim Joint Task Force on Housing. He shared findings from the Chamber and the Home Builders Association of Kentucky’s report Building a Foundation for Growth, which shows how housing shortages limit opportunity across the state.
“In a statewide survey, 90% of local leaders said their region couldn’t support a 1,000-job project due to lack of housing,” Hughes said. “Housing is no longer just a local planning issue—it’s a major part of Kentucky’s economic future.”
Later in the week, Chamber Vice President of Policy Charles Aull spoke to the Interim Joint Committee on Economic Development and Workforce Investment, offering a look at the data behind Kentucky’s housing challenges and the solutions needed.
Drawing on statewide listening sessions, market data, and national research, Aull warned that Kentucky may need to build between 360,000 and 500,000 new homes by 2050 to meet projected demand.
He pointed to several reasons for the shortage: fewer homes being built after the Great Recession, rising construction costs, a lack of skilled workers, outdated zoning policies, and increasing regulatory burdens and infrastructure costs that builders are absorbing. He emphasized that these compounding factors—such as energy codes, labor regulations, and local approval processes—can significantly affect the final cost of a home.
The Chamber also urged stronger investment in the construction workforce and greater promotion of existing training and scholarship programs for skilled trades. Aull pointed to programs such as the Work Ready Kentucky Scholarship and Kentucky Educational Excellence Scholarships for Qualified Workforce Programs as tools to help grow the talent pipeline for electricians, HVAC workers, roofers, and other in-demand roles in the construction industry.
The return on these investments is significant, Aull said. According to the National Association of Home Builders, constructing 1,000 homes in Kentucky generates about $57 million in one-time state and local tax revenue and $16 million in recurring annual revenue. The Kentucky Home Builders Association estimates that building 1,000 single-family homes also supports more than 3,500 full-time jobs.
To help communities build more housing, Aull and Hughes recommended that lawmakers create a Residential Infrastructure Fund—similar to a program in Indiana that gives low-interest loans to local governments to cover the cost of roads, water lines, and other infrastructure needed for new housing developments. That program has already helped build thousands of new homes, including in rural areas. A key element of the program is that it also incentivizes regulatory reform at the local level.
“Indiana’s model helps bring housing online without over-inflating the market,” Aull said. “It also encourages communities to conduct housing needs studies and align their land use and zoning policies with best practices to accommodate growth.”
Hughes praised recent legislative progress in updating local zoning rules and encouraged lawmakers to build on that momentum.
“If we’re serious about attracting investment, keeping young talent, and growing our local economies, housing must be a priority,” Hughes said. “Kentucky has the land and the momentum—now we need the leadership to meet the moment.”
Read the full Building a Foundation for Growth report at www.kychamber.com/housing.
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