A lot of churches in Louisville are sitting on more land than they use. A side lot. A parking lot that's only full on Sunday. A house someone left the church in their will. A school building that closed years ago.

For a long time, turning any of that into housing meant a fight at the zoning office: hearings, neighbor meetings, months of waiting, and no promise of a yes. This year Kentucky changed that. The law is called House Bill 333 (HB 333), and Governor Beshear signed it on April 7, 2026.

Here's how it works, in plain English.

What the law does

HB 333 makes affordable housing built by a church a "permitted use." That's zoning language. It means the city has to allow it as long as the project meets the rules. The church doesn't have to ask for a zoning change or win a hearing. The city just checks the boxes, a step the law calls a "ministerial" review.

The law covers the church itself, or a developer working on the church's behalf.

It also does one more thing: a church-run homeless shelter, or a temporary warming or cooling center during extreme weather, is now allowed in any commercial, business or industrial zone.

Who qualifies

This is the part people get wrong, so here are the actual rules:

• The church has to own the land, and has to have bought it before January 1, 2026. Land bought this year or later doesn't count.
• The church has to keep owning it. It holds title for the whole time the homes must stay affordable. That's why most of these deals use a long-term lease to a builder instead of a sale. More on that in our guide to ground leases.
• Every home has to be affordable. "Affordable" here means reserved for households earning 80% or less of area median income (AMI), the middle income for our region, set by the federal government each year. No market-rate units in a project that uses this law.
• 24 homes or fewer. That cap counts all of the church's parcels within half a mile of each other, not just one lot.
• The site has to be in the right spot. It qualifies if it's zoned commercial or business. A residential lot also qualifies if it sits next to a state primary road and next to commercial or industrial land. Turning a former school building into homes also qualifies.
• The homes stay affordable for 15 years. That's recorded on the deed, and the church files a short compliance report every year.

Building permits are still required. This law skips the zoning fight, not the building inspector.

What the law doesn't do

• It doesn't give a property tax break. See our guide to taxes and fair housing.
• It doesn't cover market-rate or mixed-income buildings, gyms, auditoriums, offices or retail. Those can all still happen on church land. They just go through the normal zoning process.
• It doesn't help if the church sells the land.
• There is no federal version yet. A federal "Yes in God's Backyard Act" has been introduced in Congress, but it hasn't passed.

Why this matters in Louisville

Louisville's city government held a Faith-Based Development Summit on June 4, 2026 to bring church leaders, lenders and builders together on exactly this. And local churches have already shown it can work. Zion Baptist Church, working through its own development corporation with The Housing Partnership, opened Zion Manor II in 2023: 34 senior apartments in the Russell neighborhood, built on church land.

Kentucky isn't the only state doing this. California passed a similar law in 2023. Virginia and Florida have passed their own versions since. But for a Kentucky church, HB 333 is the one that counts.

How to tell if your property qualifies

Start with three questions:

• When did the church buy it? (Before January 1, 2026?)
• How is it zoned? (Commercial or business, or residential next to a state primary road and commercial land, or a former school?)
• How much land is there, and what else does the church own within half a mile?

The zoning and road questions are where most people get stuck. That's the part I check for free. You can also read about what to do with donated or inherited property that doesn't fit this law.

Frequently asked questions

Can our church build housing and rent some units at market rate under HB 333?

Not under this law. Every unit in an HB 333 project has to be affordable at 80% of area median income or below. A mixed-income building is still possible on church land, but it goes through normal Louisville zoning.

Can we sell the land to a developer and still use the law?

No. The church has to keep owning the land for the full 15-year affordability period. A long-term ground lease to a developer is the usual way to do it.

Does the law apply to land our church bought in 2026?

No. The church has to have owned the property before January 1, 2026.

Can a church run a homeless shelter without a zoning change?

Yes, in any commercial, business or industrial zone. HB 333 makes a church-run shelter or temporary warming or cooling center a permitted use there.

Want a free look at your church's property?

I'm Rob Bergeron, owner of Winner Realty here in Louisville. I'll put together a free review of what your church owns: what each property is worth, whether it qualifies under the new law, and what your options are. No cost, no obligation, and I'm not asking to list anything. If it ever turns into a deal, we talk fees up front and your attorney reviews everything. The congregation always decides.

Grab a time here, or text or email me at Rob@thewinnerrealty.com.

This article is general information, not legal or tax advice. Every church should run a specific project by its own attorney, accountant and denominational leadership.