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2017 LBAR Study on Lexington’s Land-Use Policies

In 2017, the Lexington Bluegrass Association of Realtors (LBAR) funded a research study by the University of Kentucky to look at how Lexington’s land-use policies, including our Urban Services Boundary (USB), affect our growth – from their impacts on housing prices to jobs to city revenue. Here’s a summary of what the research found:
  • Lexington’s land-use policies are not causing housing prices to rise faster than prices for the state, nation, or comparable cities (Executive Summary). In fact, Lexington is experiencing considerably less upward pressure on prices than the nation as a whole. (Page 8)

  • Our land-use policies have not impeded the City’s employment growth relative to our MSA (metropolitan statistical area or surrounding counties) and 18 comparison cities. Research suggests employment growth can continue at high rates even with little developable land. (Executive Summary and Page 28)

  • If Lexington were to expand the USB, housing prices might decrease slightly, or rise at a slightly slower rate, but the impact on housing prices would likely be temporary. Two years after the 1996 expansion, despite having a significant amount of undeveloped land, Lexington’s housing prices began to increase faster than those in Georgetown, Nicholasville, and Louisville. (Page 9)

  • While the expansion of the USB might have contributed to the slower price increase in 1997, the effect appears to have been limited to approximately 1 year. (Page 9)

  • Expansion would likely not benefit the city’s fiscal situation in the long term, as the comparison of revenue to costs associated with expansion are too close to be significant. (Page 43)

These additional points not mentioned in the study are also worthwhile to consider when making informed decisions about growth:
  • In 1996, 4200 developable acres were brought into the Urban Service Area for development. As of 2020, 24 years after expansion, 51% of the expansion area is still undeveloped and no Affordable housing has been built in those areas.
  • Nearly 250 acres of City land are available for economic development at Coldstream, pursuant to the land swap between the University of Kentucky and LFUCG. 50 acres are currently shovel-ready and infrastructure planning is currently happening on the other 200 acres. Mayor Gorton has recommended that the infrastructure development for the 200 acres be funded by the American Rescue Plan Act funds to be received by the City so they will be shovel-ready and prepared to meet economic development needs.
  • For context, the Bluegrass Business Park, owned and operated by Commerce Lexington, is 100 acres and it took 20 years to fully utilize the land for businesses.

LBAR Study Executive Summary

Full LBAR Study