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​​​Housing affordability and accessibility are national issues impacting cities and communities from coast to coast. Solving Kentucky's housing supply gap is a collective effort that will take the help of cities and counties, business leaders and local decision makers, the housing community, the financial community, nonprofits, governmental agencies, developers, and builders.

Possible causes

  • Fewer builders after the 2008 recession - many went out of business.
  • Inability to get a loan - banks are reluctant to extend enough credit to fund many projects, or high interest rates deter builders and developers.
  • High land and construction costs - land and material costs are escalating pricing many builders out of the market or causing them to scale back their projects.
  • Lack of public funding - federal funding for affordable housing has not increased in many years despite higher costs, and Kentucky provides little funding for housing development.
  • Local resistance - communities challenge the construction of affordable or alterative housing in their area and create restrictive zoning laws preventing multifamily units, income-restricted units, manufactured housing construction.
  • Time - most units are stick built which takes time to add units to the market.
  • Natural disasters - the Western Kentucky tornadoes and Eastern Kentucky flooding of 2021 and 2022 damaged or destroyed more than 5,000 housing units, displacing thousands of families, and their counties did not have sufficient housing to rehouse them.
  • ​​ Economic development - while more jobs is a win for the state, we need housing for the new workers.

Possible solutions

  • ​Update land use and zoning policies and decisions locally.
  • Encourage development projects that meet market demand.
  • Fund disaster recovery efforts.
  • Identify available land for development.
  • Address local issues including homelessness, community revitalization, insufficient infrastructure.
  • Discuss barriers to creating new units, including outside investors buying available units, appraisal values are not covering the development costs.

KHC already has taken steps to close the gap. It now uses the majority of its Low Income Housing Tax Credits to create new rental units for low-income Kentuckians. Previously, KHC used its annual allotment to fund both new development projects and rehabilitation of existing units.

As part of its regular programs, KHC provides housing by:​

  • ​Providing mortgages and down payment assistance to new homebuyers.
  • Funding the construction of new rental properties for low-income renters.
  • Funding the construction of new homes for moderate- to low-income homebuyers.
  • ​Paying a share of the monthly rent for more than 26,000 households.
  • Administering programs focused on homelessness and energy efficiency.

Ideas in Practice

Learn how other states and agencies are addressing their housing gaps.  ​​



​National Association of Homebuilders
Blueprint to Address Housing Affordability Crisis

With a nationwide shortage of roughly 1.5 million housing units that is making it increasingly difficult for American families to afford to purchase or rent a home, the National Association of Homebuilders (NAHB) provides this 10-point housing pla​n to help tame shelter inflation and ease the housing affordability crisis by removing barriers that hinder the construction of new homes and apartments.

  1. Eliminate excessive regulations;
  2. Promote careers in the skilled trades;
  3. Fix building material supply chains and ease costs;
  4. Pass federal tax legislation to expand the production of affordable and attainable housing;
  5. Overturn inefficient local zoning rules;
  6. Alleviate permitting roadblocks;
  7. Adopt reasonable and cost-effective building codes;
  8. Reduce local impact fees and other upfront taxes associated with housing construction;
  9. Make it easier for developers to finance new housing; and
  10. Update employment policies to promote flexibility and opportunity.

Details on each point are available at


Other Resources

  • National League of Cities - Housing Supply Accelerator Campaign​A solutions-oriented campaign to improve local capacity, identify critical solutions, and speed reforms that enable communities and developers to work together to produce, preserve and provide a diverse range of quality housing by realigning the efforts of public and private stakeholders in the housing sector to meet housing needs at the local level. 

  • Terner Center Housing Lab​: Established in 2015, the Terner Center is a leading voice in identifying, developing, and advancing innovative public and private sector solutions to the nation's most intractable housing challenges. A core focus area is “Increasing the supply and lowering the cost of housing in ways that align with equity and environmental goals."

  • Local Housing Solutions (LHS):​ LHS is a one-stop housing policy platform with actionable tools and step-by-step guidance to help cities develop, implement, and monitor local housing strategies. Developed for policymakers and practitioners from cities of different sizes and different levels of resources and technical capacity, LHS presents resources to support housing strategies. Launched in 2018, LHS was developed through the National Community of Practice on Local Housing Policy, a joint project of the NYU Furman Center and Abt Associates.

  • Main Street 2023 Housing Guidebook for local leaders​​​​

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Kentucky Housing Corporation
1231 Louisville Road, Frankfort, KY 40601
502-564-7630; 800-633-8896 (KY only); TTY 711
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