GEORGETOWN — Let's take a swing down crowded Highway 460, also known as Paris Pike, in Scott County.
We're about a mile from downtown Georgetown, but really, this is a Main Street of its own little city. Along this stretch, Scott County isn't just growing, it's flat-out booming: New homes are stacked on the rolling hills like cordwood.
Scott County is the fastest-growing county in Kentucky, and it shows. It has Toyota, one of Central Kentucky's largest employers, as well as the state's biggest high school, the 2,400-student Scott County High School.
"The Georgetown real estate market is very strong," said Sha Fister of Rector Hayden realtors, which has a Georgetown office. "There is quite a bit of development potential in all directions around Scott County. ... There's a lot of area heading from Scott County to Bourbon County."
How Scott County coalesced as a boom town is a bit harder to explain, but let's give a one-word signal: Toyota. The auto factory is expanding into Lexus production beginning this fall and adding 600 workers; it is already one of Central Kentucky's largest private employers, with 7,000 workers.
But that's not all Fister sees. Homebuyers in Scott County aren't just buying convenience to Toyota and the satellite growth around it, but also close to Lexington: He notes it's a 22-minute commute from Rector Hayden's Lexington office, in Beaumont, to its Georgetown office.
For people moving in who are used to longer daily commutes, the space between one of Kentucky's 120 counties and another isn't as large as once perceived.
There's also the matter of neighborhood schools in addition to available land: "There's been a lot of emphasis in the last decade or two on education. The school system there is willing to grow."
Internal Revenue Service statistics of migration between counties as well as census data show that Fayette County is losing some of its population to Scott County. Fayette County's commitment to preserving its rural area and restricting the growth of its Urban Service Area — the land within which new homes can be built — has tamped the once-raging growth of Lexington. Lexington last added acreage to its Urban Service Area in 1996 and has instead since opted to identify acreage within the current area available for development as well as land considered underused that could be redeveloped.
The real estate boom in Scott County shows where some of the people who have opted out of Fayette County are settling.
Lexington continues to grow. But the counties around it, including Scott and Jessamine, are also growing and luring more affluent homebuyers across an increasingly permeable county border.
Lexington builder Dennis Anderson is one who has seen the potential in Scott County. His Amerson Orchard development in Georgetown is being built on land rezoned in 2010 from agricultural to residential and commercial use.
The development has been approved for 489 units and has built 153, Anderson said. The 336 home sites available are priced from $140,000 to $275,000, with ranch and two-story plans available.
Fister, of Rector-Hayden, also said that although there has been some small growth in upscale homes, most of the sales are in the $150,000 to $250,000 range.
Anderson is blunt about part of Scott County's appeal: "They're going to spend $20,000 less on their home in Scott than in Fayette."
He also said that part of the migration is aspirational as much as it is work-related: after fulfilling basic needs of safety and being near work or school, homebuyers look for nearby models of more affluent people and homes which they may be able to attain. "If you see the high-income people living out of town, people want to live close to where they live," Anderson said. "They're going to go there and do both."
Matt Ruther, director of the Kentucky State Data Center at the University of Louisville, said that American Community Survey data shows that high earners — those earning more than $100,000 annually — are moving into Jessamine County. Those with incomes of $50-100,000, solidly middle-class and up, are moving into Scott, he said.
The most recent Internal Revenue Service outflow statistics, from 2010-11, show that Fayette lost 398 taxpayers to Scott, while Scott lost 384 to Fayette.
That doesn't seem like much of a difference until you consider the income levels attached to those people.
For those moving into Scott County, the average income was $41,346; for those moving to Fayette County, it's $34,789.
A similar disparity is shown in the Fayette and Jessamine County statistics. In 2010-11, Fayette lost 573 taxpayers to Jessamine, while Jessamine moved 554 to Fayette. Again, the difference is in average income: The new Jessamine County residents made an average of $53,795, while those moving into Fayette earned an average of $32,888.
The boom in residential construction in Kentucky's suburban counties means that there's less growth money from property tax coming into Fayette's coffers. Property taxes help fund schools, counties, health departments and other agencies for their home counties.
"At the higher end of the income scale, it does look like Scott County is gaining from that, but it does look like Jessamine County is moving even more," Ruther said.
Fayette County continues to gain population, though: Long-range city planners note that while Lexington registered 295,803 residents in the 2010 census, the estimate for 2014 was 310,797 people.
For comparison, Central Kentuckians can look toward the Jefferson-Oldham divide, Ruther said, where high earners around Jefferson County created a high-earning suburban county next door. While Scott is the fastest-growing county in the state, the second fastest-growing is Oldham.
Further afield, Portland, Ore. and Boulder, Colo., have urban growth boundaries to maintain both city size and urban integrity, he said. Home prices increase as supply is limited, Ruther said.
"Certainly schools are one of the top things that people cite when they leave the city," Ruther said.
"We see this pretty much all over," Ruther said. "In Oldham County, wealthier individuals move out because they are able to. ... How to fix this policy-wise, that's a struggle — how to tell people when they're coming into your county to use your amenities that they have to pay for them."
Anderson said that while Lexington has begun to emphasize infill developments — re-invigorating neglected areas already within the urban service area — it's difficult for him to make money on infill developments alone, and wonders if Lexington has considered the long-term effects of higher-income individuals flocking to surrounding counties.
"In Fayette County, it seems like we're awfully proud of ourselves," Anderson said, citing Lexington's conscious and repeated decisions to limit growth.
But Anderson noted that such decisions have costs.
This story was originally published May 17, 2015 4:19 PM.