Kentucky needs at least 200K houses, report says
The Kentucky Chamber of Commerce and the Home Builders Association of Kentucky released a 50-page report this week that says the state needs a lot more houses.
More than 200,000, at least, the report says.
It found that 66.2% of community leaders say that housing challenges are holding back economic growth and opportunity in their communities and almost 90% expressed doubt that their communities could meet the housing demands of a major economic development announcement.
Local homebuilders picked up 90 permits for single-family homes in the first six months of 2023.
That was one of the lowest starts to a year in decades.
But in the first half of this year, there were only 88 single-family home permits.
Adam Hicks, executive officer of the Home Builders Association of Owensboro, said, “Our nation has seen 40% inflation over the past three years on cost of goods across the board. Unfortunately, that does not exclude the building industry.”
He said, “That paired with 7-8% interest rates has made it very difficult for the home builders and buyers in our area. Another thing that slows down the production of new homes is the lack of work force development in our area. Finding a skilled laborer that can get jobs done in a timely manner has been increasingly more difficult over the past few years.”
Hicks said, “We have amazing trade schools that allow people in our community to learn the trades and develop the tools necessary for a wonderful and fulfilling career in our industry. Promoting the industry is the top priority in our association right now. In the past two years, we have partnered with many of our members to put on a Construction Career Day which allows students across our area to meet with businesses in the building industry and even experience hands on activities to spark their interest.”
He added, “Our local builders are fortunate to have a great relationship with the Owensboro Metropolitan Planning Commission. Other counties in Kentucky are finding it very difficult to find desirable land that can be used to develop neighborhoods because of the strict stipulations that are placed on them by their local regulators.”
Candance Castlen Brake, president of CEO of the Greater Owensboro Chamber of Commerce, said, “Our chamber hosted a focus group earlier this year to contribute to the findings for this report, and that conversation was representative of the report as it was released. The findings are not surprising, but are cause for concern.”
She said, “We hear daily from people from all walks of life and income levels that housing is an issue, and we hear particularly from the businesses we represent that lack of housing is an issue in recruiting talent, particularly in professional sectors and in key leadership roles.”
Brake said, “This is a great opportunity for our region to create housing solutions that span needs across the spectrum. Our homebuilders are second to none. We look forward to working with them and other partners across the community to identify ways to address this need.”
She added, “The communities that begin addressing this crisis innovatively will win economically with job creation and talent growth. It is an opportunity to seize.”
As many as 529,000 houses
The state report says, “Kentucky already faces significant housing challenges, including an aging housing stock, a growing gap between home prices and household incomes, and statewide housing shortages estimated to be as high as 206,000 housing units.”
It added, “Housing challenges will intensify in the state as Kentucky leaders seek to accelerate economic development and workforce growth, and the state may need to build as many as 529,000 new housing units by 2050 to keep pace.”
Key priorities, the report said, “emphasize encouraging local land-use and zoning reforms, being smarter about government regulations, incentivizing more affordable housing and supporting and growing the home building workforce.
It said, “Home building is a significant driver of economic activity and state and local tax revenue, with estimates showing that building 1,000 single-family homes would yield a one-year economic impact of 3,764 full-time jobs and $57.4 million in tax revenues.
And it said, “A study from 2017 concluded that housing shortages in America’s metropolitan areas over the past 50 years have caused the U.S. economy to be 9% smaller today than it otherwise would be, robbing the average American worker of $6,775 in higher annual wages.
The report said, “While a majority of Kentucky’s housing units were built between 1970 and 2009, more than 30% were built before 1970. Pre-1970 homes tend to be less energy-efficient and more in need of remediation and repairs.
And it said, “Home prices are rapidly outpacing household incomes. In some of the areas of the state, the median sale price for a single-family home is now 5.1 times the median household income, up from 2.4 times the median household income 30 years ago. A rising share of Kentucky renters spend more than 30% of their monthly income on housing, including 44% of renter households in 2022.
In Owensboro, the report said, the median rent is $760 a month and the median renter income is $32,000 a year.
By Keith Lawrence Messenger- Inquirer