Is homeownership out of reach for young professionals in Lexington?

By Violet Ferguson, Commerce Lexington Inc. Public Policy Intern
I’m a member of Gen Z, and one of my top concerns for the future is securing housing that will meet my needs and budget for a young professional. I am a born and raised Lexingtonian. Like many of my generation, I dream of raising a family and owning my own home. However, this vision is dimmed by the harsh realities of the housing market across the U.S., and specifically in Lexington. 

I am going into my second year at American University in Washington, D.C. I am currently back in Lexington for the summer interning with Commerce Lexington. While living in D.C., the issue of housing has become a topic discussed by my peers and me as we are forced to think about our living arrangements for college.

While back in Lexington, I’ve learned many of my local friends feel the same stress of rapidly rising housing rates. Students and young professionals are having to live with parents or friends or live outside of Fayette County and commute to school or work opportunities because of the high costs or lack of inventory.

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According to a Point2 study in The New York Times, Lexington ranked the 3rd-worst in the country for Gen Z to find a home. Lexington also had the fourth-highest rent increase in the country, according to ApartmentList.com.  You expect to see these statistics in major metros but not in Lexington. 

A recent Regional Competitiveness Plan from Commerce Lexington highlighted Greater Lexington’s need to attract and retain young professionals to support business growth and to provide more housing to support our workforce. One of the key goals of the plan is attracting or retaining 1,500 young professionals to the community each year. 

Although Lexington’s quality of life amenities and job opportunities are a draw for young professionals, escalating housing costs and lack of inventory are serious threats to Lexington’s affordability advantage and talent attraction goals. 

Consider just a few of the obstacles:

• In the last decade, Lexington’s housing costs have increased 100% while wages have only increased 30% for residents. The median home value in Lexington is $305,566, which is up 6.6% from last year alone, according to Zillow.  This percentage increase outpaces the national average, according to the National Association of Realtors.  
• According to the Kentucky Housing Supply gap analysis, 22,549 housing units are needed in Fayette County.
• A recent report from the Fayette County PVA showed the community is only adding 500 new housing units on average each year. 

It is not enough to keep up with demand.  This gap is only getting worse. As Gen Z attempts to move from renting to homeownership, we are now competing with older generations for similar types of homes, which is leading to longer renting periods.

Delaying homeownership is a threat to our financial independence. According to the National Association of Realtors, many young professionals are buying their first home much later in life than the generation before, putting them at a financial disadvantage for wealth building.  According to NAR, the average age for first time home buyers is now 35 years old compared to 28 years old in 1991.  Additionally, the median net worth of a homeowner is $396,200 compared to a renter with a net worth of $10,400.  

For Gen Z to accumulate wealth in the way other generations have, affordable housing and homeownership is incredibly important.

Lexington’s economic well-being depends on attracting and retaining young professionals. Quality of life factors, such as housing affordability and availability, are ranked as important to younger workers as job opportunities when considering relocation to a new city.

Ensuring affordable, available housing for the next generation must be a top priority of community and government leaders in Lexington.  If Lexington's issues with housing continue, the attraction of Gen Z young professionals and our future workforce are at risk.

Violet Ferguson is a Lexington local and is entering her second year at American University in DC, where she majors in legal studies.