Single-family residential construction activity is continuing to increase in Northern Kentucky.
According to a 2019 NAHB study in Greater Cincinnati, the median price of a home is $294,189.
Brian Miller, Executive Vice President of the Building Industry Association of Northern Kentucky explains, “The household income needed to qualify to own that home is $86,653. There are 875,607 households in our Metropolitan Statistical Area. For every $1,000 increase in the cost to own a home, 1,396 families out of those 875,607 households are unable to pursue homeownership.
“The three issues facing the residential sector are lack of skilled labor, increased costs of regulations and ordinances, and increases in material prices. These have escalated the cost to build a home by as much as $50,000, 80% of households are now unable to invest in a new home build.”
Miller warns, “Unless we see changes in skilled construction trades education, an easing of regulatory and local ordinances, and lower costs for materials, we will not see housing rebound. The volumes of homes built in our market will not increase for some time.”
Residential remodeling projects have exploded in recent years. Permit values have leveled from years of large addition spikes, whereas remodeling is so prevalent and at such a high volume that mid to lower priced projects have lowered the average of permit value. The slow growth in new home builds growth is fueling this phenomenon as new builds are becoming more unattainable for the average family. Homeowners are opting to update their current home, choosing to convert a part of their home’s equity into new spaces in their existing home.
“Commercial and industrial development is off the charts in Northern Kentucky,” Miller says. “It takes no more than a drive around the Greater Cincinnati/Northern Kentucky Airport to see this firsthand. Northern Kentucky paces ahead of national nonresidential construction spending, which is in line with trends seen across the country. The increase is so large that there is concern about the availability of enough industrial zoned land to handle the increased growth.”
“The available zoned land around CVG is disappearing. There is now an increased interest in and around Walton. The Building Industry Association, along with local leaders, are working to bring new industrial zoned land to the region. The hope is to avoid industrial projects running to outlying counties along interstate access points.
“As a result of the start of the construction for the Amazon Prime International Air Hub, companies are choosing Northern Kentucky to grow their large-scale businesses. The Building Industry Association’s concern as it relates to home affordability is to see upward pressures on residential construction due to the increase in the base of these low-skilled workers, leading to a need for large changes in our development patterns within our communities.”
