In the rush to address potential solutions to Kentucky, and the nation’s housing crisis, some interest groups are setting their sights on local government regulations.

Members of the Interim Joint Committee on Local Government heard testimony on Tuesday regarding housing development and land use as legislators work towards fixing a 206,000-unit housing supply gap.

Charles Gardner, a research fellow at George Mason University’s Mercatus Center, said he believes that state government could, and perhaps should, preempt local land use regulations. His argument to committee members: localities have been slow to act. Gardner said some states are looking at minimum lot size reform, reduction of parking minimums, and streamlining the permitting process, among others. Gardner said Mercatus plans on releasing 18 recommendations next month.

However, several lawmakers expressed skepticism about a one-size-fits-all approach.

Senator Julie Raque Adams, R-Louisville, said red tape is often in place in cities to protect surrounding neighborhoods, and pushed back on the idea that there needs to be a state law to preempt local requirements.

“We have some communities with planning and zoning, and we have some communities that don’t have planning and zoning, so it kind of makes it tricky to pass a state law that requires somebody to do something that they may not have the expertise to do,” she said. 

Senator Chris McDaniel, R-Ryland Heights, also questioned the premise with a question to the free market – essentially saying whoever at the local level can create the most advantageous structure to building will grow faster. Gardner said the issue is big enough that housing should be available in all areas and not limited by local government decisions

McDaniel asked a second question during the meeting that cut to the heart of the issue – supply.

“You talk about supply here and things we can do to increase supply, which is critically important,” he said to a second presenter. “We also have to talk about things that have reduced supply – in particular we have a lot of municipalities that allow for short-term rentals. Two companies alone have pulled about 17,700 units out of the housing stock in the last decade or so, would you support us implementing legislation that would ban short-term rentals or any approval of short-term rentals at the municipal level to improve housing stock?”

The presenter, M. Nolan Gray, said there are many reasons why the state or local governments may want to regulate short-term rentals, but he has not seen data that banning regulations or tightening them would affect housing supply.

One thing is clear: the housing crisis did not start because of municipal regulations that protect the foundation of a community. Instead, many, including the Kentucky Housing Corporation, point towards a construction industry that has lagged since the 2008 recession due to a lack of affordable materials. The housing gap is also impacted by inflation and high interest rates.

The Kentucky League of Cities Board of Directors has voted to engage directly on housing issues and be a leading voice in crafting solutions. KLC supports housing policies that maintain local authority over land use decisions and uphold planning and zoning regulations that reflect community goals and values. KLC opposes state-level mandates or preemption efforts that override local decision-making, instead advocating for flexible, locally driven solutions to address the housing shortage.