FRANKFORT, Ky. (FOX 56) — State lawmakers are exploring many options to energize Kentucky’s housing shortage. At Monday’s meeting of Kentucky’s Housing Task Force, stakeholders from the business and banking community came to the table with proposals.
“Would you consider the housing issue a challenge, or is it a crisis? How would you characterize that?” Sen. Robby Mills (R-Henderson) asked.
“I would probably say it’s a crisis,” Kentucky Chamber of Commerce director of public affairs John Hughes responded.
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And not one that will be solved quickly. As shared with this group of lawmakers by the Kentucky Housing Corporation in the task force’s last meeting, right now, Kentucky is short 206,207 housing units. Monday’s meeting of the task force took another step in exploring pro-growth proposals for possible new laws in 2026.
“Practical, pragmatic, relatively low-cost or no-cost reforms that can help either streamline permitting, remove local red tape that stands in the way of housing construction, reduce litigation risk, or otherwise speed up the production of housing,” researcher Charles Gardner said in his presentation exploring a “menu of options.”
Some of those proposed reforms may just be simple changes to building codes; Gardner suggested changing a requirement for multiple stairwells in smaller apartment buildings, as an example.
Other solutions are a bit more complex. The Kentucky Chamber is proposing a revolving loan fund modeled after an infrastructure assistance program in Indiana.
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“The Residential Housing Infrastructure Assistance Program provides low-interest loans to communities to finance infrastructure projects that support residential housing development. As the loans are repaid and the money again becomes available for future financing, that fund resolves,” Hughes explained.
The banking community also wants to work with lawmakers on a loan pool for creating new housing. The Kentucky Bankers Association wants to commit $20 million to a fund that is matched with tax credits. KBA general counsel Tim Schenk said it is something the organization is more hopeful to get accomplished in a budget session, which 2026 will be.
“By virtue of utilizing some tax credits, with developers, builders, and bankers. We can typically offer tenant rents that are 15% lower than that of traditional,” Schenk explained. “So if you think of a community like Morehead, where maybe their average tenant rate is $1,200 a month, you take that down to $800 or $900 a month. All of a sudden, that can cover their utilities,” he said.
The task force meets again to continue the discussion for next year’s housing legislation on Aug. 25.
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