The Policy Shifts That Will Shape Kentucky Real Estate Next

[Rob Bergeron]

I hope everyone had a wonderful Christmas and was able to slow down for a moment—take a breath, spend time with people you care about, and remember why you do what you do. Those pauses matter. They reset perspective.

Now the calendar flips, and it’s time to start putting a clear eye toward 2026. Life is short. The people who tend to do best are the ones who decide, move, and adjust along the way.

Frankfort goes back into session on January 6, and while most headlines will focus on politics and budgets, the real story is what those decisions quietly do to housing demand, land values, and deal flow across Kentucky.

Almost every major priority lawmakers are signaling for 2026 touches real estate in one way or another.\

Education policy is back at the center of the conversation. Scholarship tax credits, renewed scrutiny of Jefferson and Fayette County school district finances, and another push for universal pre-K all influence where families choose to live. When school governance or funding models shift, you often see hesitation first, followed by repricing once clarity settles in. That typically shows up earliest in rentals, starter homes, and neighborhoods near district boundaries.

Data centers remain a major focus. The state has already put long-term tax incentives on the table. Now attention is turning toward power generation, grid expansion, and protecting ratepayers. That combination matters. Land with access to transmission, water, and industrial zoning is being evaluated very differently than it was even a couple of years ago. At the same time, community pushback in several counties shows entitlement risk is real. The upside won’t be limited to hyperscale projects—industrial land, flex space, supporting infrastructure, and nearby workforce housing tend to benefit once utilities commit capital.

Housing policy is another quiet lever. A legislative task force has recommended deregulation, smaller lot sizes, more infill, and stronger incentives for rehab. That’s meaningful for missing-middle housing, ADUs, value-add rehabs, and small multifamily—especially in older urban areas where the bones already exist. When friction comes out of the system, deals that didn’t pencil before suddenly do.

Even the less obvious issues matter. Immigration enforcement affects labor availability and construction timelines. Medicaid and health policy influence aging-in-place, multigenerational housing, and accessibility upgrades. Short-term rental regulation could resurface. Telework rules, if revisited, could quietly re-centralize demand closer to employment hubs.

Policy moves people.
People move housing.
Housing moves money.

A quick snapshot of where we are today:
Inventory is sitting at 3,215 listings, trending down.
Mortgage rates are hovering around 6.2% this morning.