Protecting Low-Income Homeowners from Displacement through Home Repair Assistance

Why this investment?

Over the past several years, Lexington has consistently worked towards addressing gentrification and housing insecurity for their most vulnerable residents. In 2018, the City established the Neighborhoods in Transition Task Force to focus on protecting vulnerable residents from displacement while preserving the history and the culture of communities. Lanter credits this task force as “planting the seed” for the Code Enforcement Grants program.

The Lexington Mayor’s Racial Justice and Equity Commission convened in 2020, continued the task force’s work, including honing in on predatory developers’ reporting of code violations to force out low-income homeowners and gentrify the neighborhood. When homeowners couldn’t afford to remediate the violations, this would lead to civil penalties and liens on their property, incentivizing homeowners to sell and contributing to a cycle of displacement and gentrification. Even without predatory code violation reporting, low-income homeowners were vulnerable to tremendous losses when they couldn’t afford repairs. Jerry Lucas, Code Enforcement Officer at Division of Code Enforcement, describes how one homeowner became a tenant in her own home after she received a notice for several violations she couldn't afford to correct. She sold her home to an investor and became the tenant, completely losing her asset.

The commission’s October 2020 report recommended that the “Housing Code of the City of Lexington be reimagined into a Code Agency that places the health, well-being, and protection of residents, especially the most vulnerable, and neighborhoods as its mission.” The City responded in 2021 by combining Code Enforcement with other housing-related offices into the Office of Housing Advocacy & Community Development. The Division of Code Enforcement transformed into an agency that focuses on working with residents and neighborhoods to create flourishing communities and sustain housing stability.

The opportune timing of ARPA funding and recommendations from the Mayor’s Racial Justice and Equity Commission report allowed the City to create the Code Enforcement Grants for Low-Income Homeowners pilot to test a new equitable and innovative approach to preserving homeownership for low-income residents. “It’s silly to cite someone and fine them, when they have no capacity to do the work financially,” Lanter says. “They won’t have any capacity to pay the fine either. The goal is to ensure no low-income homeowner ever has to pay a code violation fine.”

What is this investment?

To develop the program, the City examined their code enforcement violation data and found that only one percent of violations were from homeowners and the punitive violation fees were hurting homeowners that were low-income and in neighborhoods vulnerable to displacement and development. Reviewing the top 10 types of code violations, they saw the list included items like repairing cornices, cleaning veneer that is peeling or unsightly, and replacing broken or rotted window casings—all moderate repairs that are causing financial grief and threat of civil penalty for the most vulnerable homeowners.

For eligible households, the program allows them to correct these code violations by funding to repair, improve, or modernize dwellings, and remove health or safety hazards from those dwellings. Additionally, the program can execute a comprehensive housing improvement strategy or focus on individual housing components such as heating and insulation, plumbing, structural concerns, lead, asbestos, or mold.

Instead of repeatedly citing a low-income homeowner for code violations, the program works with homeowners who are at or below 80 percent of the area’s median income to qualify them for assistance and help obtain contractors to make needed repairs. The Division of Code Enforcement handles all repair coordination and further prioritizes equity in the program by contracting with minority or veteran owned businesses and contractors. The process is accessible and relatively easy for homeowners, all they need to do is complete the application and the rest is handled by the Division of Code Enforcement.

Centering equity in the program

The City and residents of Lexington recognized the inequitable impact of code enforcement on low-income homeowners and its intersection with gentrification. The program is rooted in responsiveness to community needs and Lexington demonstrates that testing new solutions for long-standing inequities can result in positive outcomes. Lanter provides advice for other jurisdictions looking to implement innovative and equitable solutions. “If I were to give any advice, I think it’s really easy,” Lanter says. “Listen to your community. It would have been easy for us to say well, since homeowners are only 1 percent of code violations, it’s too small a population and not worth pursuing. But for those people, it has made a significant impact and continues to do so. Just listen to what the community wants and give it a try.”

This program is a guard against displacement and also improves health outcomes. Remediating repairs that increase property values may help reduce the racial wealth divide, since a significant part of the racial wealth divide at all income levels relates to lower homeownership rates and lower home values for people of color. Improving the conditions of a home could address building deficits like heating and ventilation, lead paint, pest infestation, safety hazards, and lack of insulation that all lead to negative outcomes. The program provides full financial coverage for any housing conditions that are code violations. “Any intersection between code enforcement and vulnerable homeowners will help stop gentrification,” Lee Steele, Division of Code Enforcement Director says. “We take care of the repairs which reduces their worry about selling their home out of financial disarray and predatory pressure.”

The Division of Code Enforcement is committed to modifying the program to meet equitable outcomes. A roadblock to eligibility was identified among the low-income elderly population who had accrued equity with their long-term homeownership. The agency identified that adding the home asset to the eligibility criteria disqualified these homeowners from the program, even though their earned income qualified. To better support all potential eligible low-income homeowners, Lexington no longer counts the asset of the home towards qualification for financial coverage of repairs. 

Lexington is committed to serving all low-income homeowners across racial demographics. One challenge they are facing is the reality that due to decades of housing discrimination and other structural barriers, the demographics of homeowners skews white, with the homeownership rate among Lexington's white low-income households nearly double that for its Black low-income households—29 percent vs 16 percent). While they are serving some homeowners of color, they are not serving as many as they had expected to and are committed to finding ways to best serve low-income homeowners of color.

Outcomes to date

The program launched in 2022 and was initially slow to start due to building out a contractors database to partner with for repair and spreading awareness of the program. Within the Dept. of Housing Advocacy & Community Development, a cross-departmental housing resource team meets weekly to solve housing issues and increase awareness of resources for their residents. Recognizing the slow program uptake, the office sent out postcards to Lexington residents describing all housing resources with emphasis on the new Code Enforcement program. In the 2023 calendar year, 31 low-income homeowners were served with $230,000 in ARPA funded repairs.

Toward transformative change

Lexington has restructured its code enforcement and housing departments to better meet community needs and build programs for its most vulnerable residents. Guided by community voice and data, the Code Enforcement Grants for Low-Income Homeowners has thus far received strong buy-in from elected officials, with the City Council and Mayor’s office continuing to show support and encourage expanding this program. The department has requested $450,000 in general funds to continue the program in FY 2025.