The Need for Mixed Zoning Initiatives and Tax Breaks: How Walkable Neighborhoods Can Increase Tourism, Jobs, Housing, and Quality of Life

Blog Post | 113 KY. L. J. ONLINE | September 24, 2024

The Need for Mixed Zoning Initiatives and Tax Breaks: How Walkable Neighborhoods Can Increase Tourism, Jobs, Housing, and Quality of Life

By: Kristen Price, Staff Editor, Vol. 113 

It’s no secret that horseracing and bourbon attract tourism in Kentucky, but unlike other tourist destinations, Kentucky does not have a famous walkable mixed-zoning area. Since individuals who travel on foot spend 65 percent more  on shopping and dining than those driving, a beautiful, walkable area is precisely what Kentucky needs to increase its tourism profits.[1] Additionally, new construction projects to build these areas and businesses can provide countless new jobs for the state. Finally, the quality of life will improve for residents. By providing zoning initiatives for local governments and tax breaks for investors and builders, the Kentucky General Assembly can meet these needs.

Horse-racing is Kentucky’s signature industry; it brings in $233 million in travel, dining, and lodging annually for the state.[2] The same is true of the bourbon industry, which has boomed in recent years. As of 2024, it is a $9 billion industry. [3] In 2023, Kentucky reached 100 licensed distilling locations.[4] This is largely because of the Kentucky Distillers Association, which has $3.5 billion of capital projects planned for the next five years.[5] As these industries make efforts to host large-scale events like the Kentucky Derby or weekend trips like the Bourbon Trail, the need arises for mixed-zoning sites with restaurants and shops for tourists to visit during their stay.

Additionally, building these areas would create jobs for Kentucky’s workforce and homes for its growing population. In January 2024, Kentucky had an overall workforce participation rate of 56.9 percent, which is lower than its pre-pandemic 58.6 percent rate.[6] In a 2024 report, the Kentucky Chamber Center for Policy and Research reported that meeting the state’s future housing needs would require increasing construction activity by a 78.6 percent from the last 15 years.[7] Therefore, new construction is necessary. Though single-family homes can be expensive to build, mixed-zoning neighborhoods can balance prices with the beneficial increase in construction. In fact, “overly-restrictive land-use and zoning rules” increase the cost of a single-family home by 22.2 percent and multi-family housing by 37.9 percent.[8] However, mixed-zoning in cities like Carmel, Indiana has solved this issue. Carmel recently developed a mixed-zoned city, Carmel’s City Center, that boasts walkable urbanism and large increases in real estate value. While an acre of land in Indiana is typically valued at 1 million to a 1.5 million dollars per acre, this mixed-zoning project has increased the value of its land to $20 million in assessed value per acre.[9] The city credits its success to public-private partnerships. While the conventional free market often does not redevelop sites or will simply develop “single-story buildings with large parking lots,” the city can create master planning and work with private development.[10] Local governments can then plan for long-term visions while private developers usually only focus on their immediate business impact.[11] 

While many would argue that these efforts are costly and a major change from typical planning, the post-COVID-19 shift to working from home and online shopping provides the ideal timing.  With the shift to remote jobs, many employees moved to “zoom towns” with affordable housing and nearby activity centers because the need to commute to offices decreased.[12] While some companies push for a return to the office, many employees are fighting to work from home.[13] As a result, the United States has seen a large increase in businesses abandoning their office buildings to match its already-closing malls.[14] Even in New York City, famous for its massive office buildings, office vacancy rates are 70 percent higher than in 2019.[15]

These newly vacant lots are ideal locations for new mixed-zoning developments. This timing aligns perfectly with the recent, strong push for housing that is within walking distance to shops, grocery stores, and restaurants. In 2023, the National Association of Realtors found that 79 percent of Americans place a high priority on “being within an easy walk of other places and things,” and 78 perfect of those individuals would pay more for a walkable community.[16] There is an even higher rate for the current wave of home buyers, Gen Z. 92 percent of Gen Z home-shoppers would pay more to live a walkable distance from “parks, shops, and restaurants.”[17] After all, the study found that “households living in walkable communities are more satisfied with their quality of life.”[18] This is because walkable urban neighborhoods lower the cost of transportation, shorten commute times, and improve health.[19]  

Considering that mixed-zoning areas increase tourism, create job opportunities, provide housing, and improve quality of life, it is imperative that the Kentucky General Assembly take initiatives to integrate them into our state. By providing tax breaks and incentivizing local governments to plan for these projects, legislators can encourage prospective investors and business planners to create a more prosperous and beautiful Kentucky.

[1] Katy Bryce, Why Walkability is Great for Business, Commute Options, https://www.commuteoptions.org/why-walkability-is-great-for-business/ (last visited Sept. 17, 2024).

[2] The Horse Capital of the World, Kentucky’s Signature Industry by the Numbers, Kentucky General Assembly (Aug. 9, 2021), https://apps.legislature.ky.gov/CommitteeDocuments/349/13529/Aug%209%202021%20KEEP%20Testimony.pdf.

[3] Janet Patton, What’s the Economic Impact of Bourbon in Kentucky? Report Says Major Growth Still to Come, Herald Leader (Feb. 8, 2024), https://www.kentucky.com/lexgoeat/bourbon/article285143507.html.

[4] Id.

[5] Id.

[6] Building a Foundation for Growth: Meeting Kentucky’s Current & Future Housing Needs, Kentucky Chamber Center for Policy & Resources 6 (2024), https://www.kychamber.com/housing.

[7] Id. at 25.

[8] Id. at 36.

[9] Robert Steuteville, How Mixed-Use Development Can Raise the Tax Base, Public Square (Feb. 11, 2021), https://www.cnu.org/publicsquare/2021/02/11/how-mixed-use-development-can-raise-tax-base.

[10] Id.

[11] Id.

[12]Traditional Downtowns are Dead or Dying in Many US Cities – What’s Next for These Zones?, The Conversation (Sept. 25, 2023), https://theconversation.com/traditional-downtowns-are-dead-or-dying-in-many-us-cities-whats-next-for-these-zones-213963.

[13] Id.

[14] Id.

[15] Id.

[16] New NAR Survey Finds Americans Prefer Walkable Communities, National Association of Realtors (June 27, 2023), https://www.nar.realtor/newsroom/new-nar-survey-finds-americans-prefer-walkable-communities.

[17] Kea Wilson, The Walkable Neighborhoods Americans Want May Be Closer Than We Think, Streets Blog USA (July 6, 2023), https://usa.streetsblog.org/2023/07/06/the-walkable-neighborhoods-americans-want-may-be-closer-than-we-think.

[18] Id.

[19] Id.