Fayette County

‘They are taking advantage of people.’ How should Lexington respond to gentrification?

‘There are certain areas that are being targeted.’ East End residents say investors changing the area.

Rev. Mike Wilson talks about the rapid changes in the city's traditionally black East End.
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Rev. Mike Wilson talks about the rapid changes in the city's traditionally black East End.

The post cards offering to buy Rev. Mike Wilson’s home at the corner of Wilson Avenue and Elm Tree Lane come every few months but ramp up in late fall and early winter — when property taxes are due.

“But as soon as you pay those taxes, those post cards from those investors stop,” said Wilson, who also owns a home on Dakota Street in Brucetown with his siblings. “They are taking advantage of people in certain economic situations. It’s the tactics they are using”

Many of those properties are being purchased by white investors, say many long-time residents in historically black East End neighborhoods. The three shotgun houses next to Wilson’s home were purchased by an investor for cheap, flipped and sold for $100,000 more than the original purchase price. All the families that moved in are white, said Wilson, who is black.

The lower-income, mostly black home owners and renters who have long made up these neighborhoods are getting pushed out.

“There’s a lot of anger and there’s a lot of distrust,” said Robert Hodge, a black man who owns multiple rental properties in the area known as the East End, an area that stretches roughly from Midland Avenue to North Broadway and from Main Street to Loudon Avenue.

That’s why Hodge and Wilson are pushing people affected by gentrification to come to a public meeting Thursday to share their experiences with a city-appointed task force charged with looking at ways to address gentrification and rapidly changing neighborhoods.

“If we don’t speak up, nothing is going to change,” said Wilson, a former Lexington-Fayette Urban County Councilman.

LEX_LexingtonGentrification (2)
Rev. Mike Wilson stands in front of his father’s home on Dakota Street on August 8, 2019. Wilson and others on the East End homeowners are under increasing pressure from investors to buy their homes and land. Marcus Dorsey mdorsey@herald-leader.com

The Task Force on Neighborhoods in Transition will hold a discussion on race, class and development from 6 to 7 p.m. Thursday at the Lexington Senior Center. It will be moderated by Roger Cleveland, director of the Center for Research on the Eradication of Educational Disparities at Kentucky State University.

“It’s going to be a tough conversation ,” said Lexington-Fayette Urban County Councilman James Brown, who is black. “But it’s a conversation we need to have.”

‘No Easy Answers’

Brown is the chairman of the task force, which was created by Vice Mayor Steve Kay, who is white, in May 2018. The goal of the task force — made up of leaders from non-profit groups, the city and businesses, affected residents, and property investors — is to develop recommendations for possible policy changes by 2020. An interim report will be presented to council by the end of the year.

Gentrification has long been an issue in big cities, but mid-size cities such as Nashville, Tenn., and Raleigh, North Carolina, have struggled over the last five years with gentrification as property in lower-income neighborhoods near downtowns is being purchased by investors looking for cheap houses to renovate and flip.

That means property values go up as deteriorating homes are refurbished or replaced. It also can mean more home ownership in areas where there is a high percentage of rental properties. More stability in a neighborhood can decrease crime and attract more commercial investment.

But it also means people who have traditionally lived in those areas are being forced out.

The task force is considering ways Lexington can mitigate this negative effect of rapid change in some Lexington neighborhoods.

“There are not going to be any easy answers,” Brown said.

At a task force meeting on Aug. 6, members pored over data and maps produced by the University of Kentucky’s Mapshop, a program run by the geography department, and Fayette County Property Value Administrator David O’Neill. That data will help the task force determine which areas in the city are seeing dramatic economic and racial changes.

The data shows something Wilson, Hodge and many East End residents have known for more than a decade. Investors are gobbling up properties in the areas between Midland and North Broadway and as far north as New Circle Road more than in any other part of the city. It started more than a decade ago prior to the last recession but has ramped up in the last four years, according to residents.

Where will people go?

A drive down Martin Luther King Jr. Boulevard, Elm Tree Lane, and portions of Six and Seventh streets shows how rapidly the area is changing. New and renovated homes with brightly colored doors and siding sit next to older homes with faded paint and cracked concrete front porches.

Tanya Torp lives in the 500 block of Elm Tree Lane. When asked recently how many people she knows who have been displaced —people who have moved because they could no longer afford to live in the East End — Torp paused.

“I’ve lost count,” she said.

Torp, who is black, said it’s not just the poor that are getting priced out. A friend of hers rented in the neighborhood for years and wanted to buy a home there. But the house he had his eye on was purchased by an investor, flipped and eventually sold for $400,000. He’s a college professor.

“He moved to Bourbon County. He couldn’t afford to live in this neighborhood,” Torp said. “But I think it’s starting to happen every where and the task force is looking at this issue city-wide.”

Art Crosby, executive director of the Lexington Fair Housing Council, which investigates housing complaints, said most of the calls he receives from East End neighborhoods are from renters who have to move because their rental unit has been sold. The new owner has made improvements, the rent has gone up and they no longer can afford to live there.

Some of the rental properties in the East End are in deteriorating condition but are affordable — under $700 a month, Crosby said.

New investment in the area is not all bad, he said, but there is a cost.

“I want people to have safe, affordable housing,” Crosby said. “ I have clients who live in places that no one should live. But if they call code enforcement, and the landowner has to fix it, rents are going to go up and they are going to get priced out.”

Crosby, who is white and a task force member, said the city can’t stop market forces. Property close to downtown will only increase in value in the years to come. But that also means other neighborhoods close to downtown will likely experience the same economic and racial shifts as the neighborhoods in the East End.

“My goal is to hopefully get to the point where we can talk about resources for people who are being displaced,” Crosby said. “What are the available resources? Do we need to talk about renter assistance? When people are being forced out, where are they going?”

A modern shotgun-style home under construction on East Seventh Street. Marcus Dorsey mdorsey@herald-leader.com

Hodge, who is also a task force member, said he owns properties he would like to improve. But rents are now creeping up as more investors buy in the neighborhood. Some houses are now renting for more than $800. If he makes too many improvements, many of his renters will not be able to afford to live there. Many are on social security or social security disability — which is less than $800 a month.

“And where would they go?” Hodge said.

Code enforcement woes

Hodge and Wilson said many people are concerned the city’s code enforcement department is being used as a tool to force people to sell. Hodge said one homeowner he knew was cited for not painting her home. At the same time, the woman was also getting postcards from investors asking to buy her home.

She had stage 3 cancer and couldn’t paint the house herself nor did she have the money to have it painted, he said. Hodge and others from the neighborhood painted it for her.

The postcards from investors stopped once the code violations were resolved, he said. Both Hodge and Wilson have had code enforcement inspectors cite properties they own. The offers to buy always seem to increase once properties are cited, they both said.

“I’ve heard so many stories like that,” Wilson said. “I was on the phone trying to get the word out (about the Aug. 22 meeting) and I couldn’t get off the phone because everyone has a story like that.”

But many black residents are fearful of speaking out, Wilson and Hodge said.

Hodge said some white investors have reached out to him and others in the neighborhood before or after they buy property there. “They ask questions,” Hodge said. They want to know more about the neighborhood and are sensitive to the issue of displacement, he said.

“But others do not,” he said.

The Herald-Leader attempted to contact some of the investors who have recently purchased property in East End neighborhoods. Some could not be located for comment. Others did not return phone calls.

Torp said she hopes people in her neighborhood come to the meeting Thursday.

“There is no easy answer,” Torp said. “My biggest worry is where people are going. That is something that we have not tracked and we don’t know.”