Let Kentucky Build: New Report Calls for Action on Kentucky’s Housing Challenges

Bold housing reform is essential to strengthening Kentucky’s economy and solving workforce challenges, a new report from the Kentucky Chamber Center for Policy and Research concludes.

Let Kentucky Build, a joint report from the Kentucky Chamber, the Home Builders Association of Kentucky, and Kentucky REALTORS®, outlines the challenges limiting housing development across the Commonwealth and recommends 12 policy reforms for state lawmakers to consider.

“Kentucky has worked hard to attract new jobs and investment, but that progress depends on having enough homes for the people who fill those jobs,” said Ashli Watts, president and CEO of the Kentucky Chamber. “These reforms offer practical solutions to help communities grow, and the 2027 legislative session is an opportunity to take action.”

The report shows that home building in Kentucky plummeted by 46% in the decade following the Great Recession of 2007-2009, resulting in a housing supply shortfall. Government regulations, bureaucratic delays, and infrastructure have since made home building more difficult and expensive.

According to the report, the consequences have been significant:

• The state missed out on an estimated $3.7 billion in economic activity and 32,600 jobs from 2008 to 2025.
• 1.5 million Kentucky adults are non-homeowners, with homeownership falling from 60.1% of adults in 2006 to 57.9% in 2024.
• In certain areas of the state, median home sale prices are now 4 times median household incomes, up from 2-3 times median incomes 30 years ago.
• 93% of local Kentucky leaders are pessimistic that their communities could provide the housing necessary to accommodate an economic development announcement of 1,000 new jobs.
• While 91% of Kentucky voters view housing as part of the American Dream, only 1 in 2 voters think the American Dream is still attainable in the Commonwealth.

“This isn’t about government interfering in the market,” the report states. “This is about making government work better by removing barriers to home building, supporting economic growth, and expanding opportunities for more Kentuckians to achieve the American Dream.”

The reforms, which are focused on removing barriers to building and improving costs for homebuyers, include:

• Modernizing parking requirements so that the free market determines how many parking spots are needed for new homes instead of the government
• Making sure that rules for builders are consistent and predictable
• Reducing costly delays by allowing builders to partner with qualified private parties for mandated inspections
• Encouraging public-private partnerships between builders and governments to help reduce the financial impacts of infrastructure on homebuyers
• Ensuring that governments fully consider the impacts of regulations on housing and the economy when they create new rules for home building
• Making it more practical for builders to develop infill housing and convert existing structures – like office buildings – into new housing

“The number one reason that housing is so expensive and hard to find is because it’s too hard to build,” said Anetha Sanford, CEO of the Home Builders Association of Kentucky. “Regulations and delays can have serious impacts on housing availability and affordability. As this new report details, every $1,000 increase to the cost of a median-priced home keeps 2,112 Kentucky households from being able to afford it. If we can cut red tape, we create more housing and lower costs.”

“Every day, realtors across Kentucky see firsthand the challenges facing Kentucky homebuyers,” said Josh Summers, CEO of Kentucky REALTORS®. “When we hear about 1.5 million Kentucky adults who don’t own their own home, that’s 1.5 million Kentuckians not living the American Dream and not experiencing the economic and social benefits of homeownership. By making it easier to build in Kentucky, we can strengthen local communities and working families across the state.”

Let Kentucky Build expands on the Kentucky Chamber Center for Policy and Research’s 2024 report, Building A Foundation for Growth, which has helped drive a statewide conversation on the importance of bold housing reform.

Lawmakers in Frankfort received a preview of the new report in a hearing before the Interim Joint Committee on Economic Development and Workforce Investment of the Kentucky General Assembly in September.

Let Kentucky Build can be read in full at kychamber.com/housing. Also available are an executive summary, a housing reforms brief, and a slide deck featuring the report’s key data points.