Kentucky Chamber Highlights Housing Challenges Affecting Economic Growth

Kentucky’s ability to compete for economic growth and jobs increasingly depends on whether communities have the housing to support it, Kentucky Chamber Senior Vice President of Public Affairs Kate Shanks and Vice President of Policy and Research Dr. Charles Aull told members of the Interim Joint Committee on Economic Development and Workforce Investment on Thursday.

“Housing is about the economy and economic development,” Shanks said. “We often talk about jobs, but just as much, we have to talk about the people side of the equation. We need to make sure we have the people to fill those jobs in order to reach our economic potential.”

The Chamber’s testimony provided lawmakers with a preview of findings that will be included in a new housing report expected later this year in partnership with the Home Builders Association of Kentucky and Kentucky Realtors. The report will build on the Chamber’s 2024 report, “Building a Foundation for Growth,” by taking a deeper look at barriers to housing development and outlining policy recommendations for the 2027 legislative session.

The Chamber conducted a statewide listening tour earlier this year to understand the impact of Kentucky’s housing shortage. From those sessions, 41.8 percent of business and community leaders said a lack of available housing would be a major challenge for a local business seeking to expand by 100 jobs. Nearly 20 percent said housing issues might even prevent or delay a local job expansion like this.

The challenge becomes greater with larger economic development projects. The listening sessions also found that the majority of business and community leaders said a project creating 1,000 new jobs in their communities would be difficult to accommodate because of the lack of housing in their area.

Aull told lawmakers that many of the housing challenges identified in the Chamber’s previous report have worsened or remained stagnant. A central issue remains the gap between the amount of housing Kentucky needs and the amount being built.

“We simply don’t have enough housing, and that has resulted in a supply-and-demand imbalance,” Aull said. “That’s the key driver behind the significant price increases and the challenges families face in finding homes that meet their needs.”

Shanks said increasing housing supply will require addressing barriers that add time and cost to development, including regulatory and permitting processes and the infrastructure needed to support new housing. She said the Chamber is also focused on giving builders greater flexibility to respond to market needs.

The Chamber’s forthcoming report will examine these and other barriers to housing development and outline potential policy solutions for the 2027 legislative session.