Task force begins work to solve Kentucky’s 200k housing unit shortage

FRANKFORT, Ky. (FOX 56) — Kentucky’s housing supply gap will keep getting larger if lawmakers don’t act; that was the message for Frankfort as leaders gathered for the first meeting of this year’s housing task force.

“The gap seems to be growing larger every year and appears like it will for the foreseeable future if we don’t do something to really incentivize and spark more production,” Kentucky Housing Corporation’s deputy executive director of housing programs, Wendy Smith, told the panel of lawmakers on Monday.

County by county, for renters and homeowners, KHC reported Kentucky’s housing supply gap has risen to 206,207 for 2024.

“If construction levels stay on trend, given our economic growth, given our household trends, in-migration, out-migration, that’s expected to grow to 287,000 units by 2029,” Smith said.

Monday’s meeting of the state housing task force is a continuation of work started last summer that lawmakers saw fit to continue into this summer, ahead of a budget session when major financial policy has a higher chance to get momentum. The task force’s co-chair, Rep. Susan Witten, said she felt in the past year they had made a lot of effort “in our collective acceptance of the problem.”

“Where last year, we were just trying to kind of set the ideas of really what the problem was. Now we understand it. The bad news is that the problem has not gone away in a year. The good news is that so many of the potential solutions that you all talked about, we’ve already talked about,” Witten said.

Such as adopting state tax credits or state-funded housing programs. Smith told lawmakers there’s a large variety of factors that have put Kentucky, and much of the nation, in such a dire housing position, chiefly a steep decline in the homebuilding rate that still hasn’t recovered from the 2008 recession. But more recently, a financial pinch on any potential homebuyers.

“We have higher average housing costs right now. Kentuckians are spending too much of their monthly income on housing costs. We have lower homeownership rates, too little workforce housing, increased household instability, as evidenced by evictions. And then more homeless Kentuckians,” Smith said.

Smith said that could also be further complicated by the impact of tariffs on construction materials and a proposed 44% cut in HUD’s budget that could eliminate an estimated $286 million in federal funding for Kentucky housing and homeless programs.

The task force will continue to meet monthly in the run-up to the 2026 legislative session.