Blog Post | 114 KY. L. J. ONLINE | September 11, 2025
The Solution to Kentucky’s Housing Crisis Starts at Home? Local Zoning Should Promote Progress, Not Prevent It
By: Will Cox, Staff Editor, Vol. 114
In Kentucky, rural areas often restrict “middle housing” through zoning, limiting multifamily construction. Middle housing refers to “multi-unit structures”—such as duplexes, triplexes, fourplexes, and townhomes—that sit between single-family homes and large apartment buildings.[1] While the state regulates baseline building codes, KRS Chapter 100 grants local governments ultimate zoning authority.[3] Given the growing housing shortage, local zoning reform is needed to create more predictable and market-determined pathways for middle housing development. Expanding housing options is critical for economic growth: 75 percent of local leaders support new developments, and 66 percent agree that limited housing is holding back growth.[4]
The scope of the state’s housing shortage is staggering. Kentucky faced a roughly 206,000 home deficit in 2024, affecting every county, and hitting low-income households the hardest.[5] By 2029, the shortfall is projected to reach approximately 287,000 homes.[6] Extremely low-income renters have only forty-three “affordable and available” homes per one hundred families, leaving nearly 100,000 families without adequate housing.[7] In Eastern Kentucky (“EKY”), about 40 percent of Appalachian counties report rental vacancy rates near 2 percent—under half the national average—and further tightening the housing market.[8]
The shortage is especially burdensome in EKY, where decades of industrial decline and population loss have left communities struggling.[9] Since 2000, the region has lost over 55,000 residents,[10] and counties like Bell, Owsley, and Martin saw double-digit population decline from 2010 to 2020.[11] Recognizing these trends, Shaping Our Appalachian Region (“SOAR”), an Appalachian-focused non-profit, set goals to add 32,000 residents and expand the regional workforce by 150,000.[12] Achieving these targets requires not only jobs, but predictable and affordable housing—a solution obstructed by restrictive local zoning.
Pressures on low-income residents are compounded by rising interest rates, higher land and material prices, and limited access to capital.[13] These challenges are particularly severe in EKY, where income lags behind state and national averages.[14] While macroeconomic forces lie beyond local control, zoning can exacerbate the problem by suppressing middle multifamily housing under the guise of preserving “neighborhood character.”[15] Nationwide, regulatory compliance alone accounts for about 40 percent of multifamily development costs; unnecessary delays or mandates directly reduces a project’s feasibility.[16]
Because zoning decisions are made locally, communities have the immediate power—and responsibility—to remove barriers to new housing.[17] In 2025, the General Assembly enacted HB 443, requiring planning decisions to rely on objective, ministerial standards.[18] Yet, meaningful reform still must occur from town to town; otherwise, local governments risk inviting broader state preemption.[19] In Oregon, for example, the state legislature prohibited exclusive single-family zoning policies in many localities, adopted a model code allowing middle housing, and eliminated parking minimums in its sixty-one metro regions.[20] Here, Kentuckians recognize the need for action: 86 percent of those polled believe policy makers should do more to address housing.[21]
Still, local resistance to middle housing remains a primary obstacle to the shortage.[22] A practical, cost-effective starting point lies in two simple reforms. First, allow multifamily dwellings by right—at least up to eight units—in all designated medium and high density districts. Second, scale back rigid off-street parking requirements, which inflate land development costs while offering limited community benefit.[23] These steps would efficiently unlock middle housing like duplexes, triplexes, and small apartments while signaling to employers that communities are prepared for investment.
Consider Morehead, a small city nestled in the Appalachian foothills, and the seat of Rowan County. Home to a university, and constrained by limited usable land, Morehead faces a 1,100-unit housing shortage.[24] Its zoning imposes multiple barriers: in R-2 (Medium Density), minimum lot sizes start at 6,500 square feet and increase by 2,000 for each additional multifamily unit,[25] capped at five.[26] In R-3 (High Density), multifamily units are capped at fifteen per acre.[27] Parking requirements—one space per bedroom[28]—further raise costs by forcing developers to purchase adjoining lots or otherwise expand site footprints.[29] These facially objective rules rigidly constrain the community’s ability to respond to market demand. Local sentiment mirrors reality: a recent survey found 62 percent of respondent residents believed affordable housing conditions in the county to be at least “poor.”[30]
Morehead is far from unique. Many EKY and rural communities impose similar limits on lot size, density, and parking, suppressing multifamily housing development. By contrast, Lexington has modernized these levers. Its R-2 (Mixed Low Density) district permits multifamily dwellings multifamily units by right up to eight, with 2,500 square feet lot minimums.[31] Medium and high-density zones use a form-based approach without strict unit caps, and off-street parking minimums have been eliminated in favor of market based standards.[32] This combination of a by-right multifamily framework and flexible parking requirements offers a guidance compass for EKY communities seeking to grow.
Expanding multifamily housing options with predictable approval and market-based parking standards represents one of the fast, lowest-cost strategies local governments can utilize.[33] Kentucky must be more competitive; many local leaders doubt their regions are well positioned to support a major 1,000-job investment under current housing restraints.[34] Beyond affordability, these reforms give rural communities a chance to modernize their middle housing supply while supporting workforce retention, economic growth, and community revitalization. Kentucky’s communities can’t afford to wait—the time for action is now.
[1] Cameron Rifkin, Middle Housing: Filling a Gap in Available Housing Options, Nat’l Conf. State Legislatures (last updated May 4, 2023), https://www.ncsl.org/human-services/middle-housing-filling-a-gap-in-available-housing.
[2] Ky. Rev. Stat. Ann § 100 (LexisNexis 2025).
[3] Ky. Rev. Stat. Ann. § 100.203 (LexisNexis 2025) (“City and counties may enact zoning regulations . . . .”).
[4] Building a Foundation for GROWTH, Meeting Ky.’s Current & Future Housing Needs, Ky. Chamber for Pol’y & Rsch. (June 2024) [hereinafter GROWTH Report], https://www.kychamber.com/sites/default/files/uploads/Building%20a%20Foundation%20for%20Growth%20Executive%20Summary%20-%20Web_1.pdf.
[5] Bowen Nat’l Rsch., Housing Supply Gap Analysis (Phase II), 8–9 (2024) [hereinafter KHC Supply Gap Report], https://www.kyhousing.org/Data-Library/Housing-Gap-Analysis/Documents/Statewide%20KY-23-557%20(Housing%20Supply%20Gap%20Analysis%20Phase%20II)%20Final%2012-31-24.pdf.
[6] Id.
[7] National Low Income Housing Coal., 2025 Ky. Housing Profile (March 2025), https://nlihc.org/sites/default/files/SHP_KY.pdf.
[8] Housing Can’t Wait Kentucky, FAHE, https://www.housingcantwait.org/housing-advocacy/kentucky (last visited Aug. 29, 2025).
[9] See generally Mel Jones & Samuel Spencer, Housing Needs in Central Appalachia and Appalachian Alabama, VCHR, 22 (2018), https://www.fahemembers.com/wp-content/uploads/VCHR-Assessment-of-Housing-Need-and-Trends-and-Central-Appalachia-and-Appalachian-Alabama-August-2018-final-copy-edited-version.pdf (“Appalachia exhibits housing trends that are like regional . . . ones. That is, the lack of affordable housing is very apparent.”).
[10] The State of Eastern Kentucky in 2022, Shaping our Appalachian Region (2022) [hereinafter SOAR 2022 Report], https://soar-ky.org/blueprint-for-appalachia/; Bill Estep, Lower Taxes, More Space, Beautiful Landscape Bringing New Residents to Eastern Kentucky, Lexington Herald Leader (last updated July 11, 2024, 4:44 PM), https://www.kentucky.com/news/state/kentucky/article289490604.html.
[11] Bailey Loosemore, Did Your Kentucky County Gain or Lose Population in 2020 Census?, Louisville Courier J. (last updated Aug. 17, 2021, 1:14 PM), https://www.courier-journal.com/story/news/local/2021/08/13/kentucky-census-2020-population-by-county/8121415002/.
[12] SOAR 2022 Report, supra note 10.
[13] 2025 Ky. Housing Profile, supra note 7.
[14] SOAR 2022 Report, supra note 10.
[15] See Will Johnston, The Myth of “Neighborhood Character”, microLife Inst. (Jan. 8, 2025), https://www.microlifeinstitute.org/micro-insights/the-myth-of-neighborhood-character (“When the community is built on exclusivity, it can’t adapt to change. On the other hand, neighborhoods with a mix of housing types and incomes are more resilient. They’re better equipped to weather economic shifts, cultural trends, and the challenges of modern life.”).
[16] Paul Emrath & Caitlin S. Walter, Regulation: 40.6 Percent of the Cost of Multifamily Development, NAHB and NMHC, 5 (2022), https://www.nmhc.org/globalassets/research--insight/research-reports/cost-of-regulations/2022-nahb-nmhc-cost-of-regulations-report.pdf; see Jeff Spivak, A Business Case for Dropping Parking Minimums, Plan. Mag. (June 1, 2022), https://www.planning.org/planning/2022/spring/a-business-case-for-dropping-parking-minimums.
[17] Ky. Rev. Stat. Ann. § 100.203 (LexisNexis 2025).
[18] Ky. Rev. Stat. Ann. § 100.275 (LexisNexis 2025).
[19] See Owen Minott & Julia Selby, Eliminating Single-Family Zoning and Parking Minimums in Oregon, Bipartisan Pol’y Ctr. (Sep. 26, 2023), https://bipartisanpolicy.org/blog/eliminating-single-family-zoning-and-parking-minimums-in-oregon/ (prohibiting localities from single-family zoning, implemented by Oregon’s state legislature).
[20] Id.
[21] GROWTH Report, supra note 4.
[22] Robby Mills & Susan Witten, Final Report Ky. Housing Task Force, Ky. Legis. Rsch. Comm’n Memorandum (Nov. 11, 2024).
[23] Spivak, supra note 16.
[24] KHC Supply Gap Report, supra note 5, at 211, 216.
[25] Rowan Cnty., Ky., Code of Ordinances § 154.162, tbl. 162–1.
[26] Id. § 154.148, tbl. 148–1 (permitting multifamily dwellings of 3 to 5 units in “R-2” zones if lot size and parking spaces are met).
[27] Id. § 154.148, tbl. 148–1.
[28] Id. § 154.174(B), tbl. 174–1.
[29] Spivak, supra note 16.
[30] Anabel Peterman, Housing Recommendations Report Acknowledges Rowan’s Lack of Affordable Housing, Morehead State Pub. Radio (Mar. 12, 2025, 11:00 AM), https://www.wmky.org/news/2025-03-12/housing-recommendations-report-acknowledges-rowans-lack-of-affordable-housing (citing Morehead-Rowan Economic Development Council’s survey that “analyz[ed] the area’s housing shortage.”)
[31] Lexington-Fayette C’nty., Ky., Zoning Ordinance § 8-11.
[32] Id. § 16-5.
[33] Mills & Witten, supra note 22.
[34] GROWTH Report, supra note 4.