While city code enforcement was declaring entire apartment units unfit for habitation inside Pinebrook Pointe last summer, inspectors for the Health, Educational and Housing Facility Board missed the most serious problems facing the complex’s tenants, an MLK50: Justice Through Journalism review of records found.
The Health and Ed Board handed KeyCity Capital $328,000 in property tax breaks over four years to provide affordable housing. During that time, the company did little to improve the squalid living conditions at two of its apartment communities.
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Residents lived with water leaking from faulty roofs, roach and rat infestations and walls covered in black mold. The conditions were chronicled in city government records, which included dozens of code enforcement complaints.
The picture often presented at board meetings came from internal reports created by Health and Ed Board staff who rarely – if ever – set foot inside the apartments, MLK50 has learned. The monitors usually enter buildings for scheduled inspections performed twice a year. But most of their reports on neglected properties are based on photos snapped from the outside after “drive-through” checkups, records show.
The gap in oversight helps explain how critical issues went unaddressed inside Pinebrook Pointe for years before the board voted to cancel the tax breaks for two properties owned by KeyCity last August.
The monitors weren’t completely blind to the decaying conditions. Even from the outside, they were able to document – in photos and brief descriptions – an apartment complex in distress. But they relied on a vague rating system and issued scores on the property’s condition that didn’t always match the dire situation on the ground.
The Health and Ed Board has long struggled to keep tabs on living conditions at properties that benefit from lucrative tax breaks known as payment in lieu of taxes, or PILOTs. The PILOT deals are supposed to encourage builders and developers to maintain and create more affordable housing in the city. But the program run by the city’s Health and Ed Board has been rife with complaints from residents at various apartment communities in recent years.
Complaints often highlighted grave concerns involving health and safety: A broken elevator in senior apartments. Non-working heat and air conditioning. Or plumbing so bad that raw sewage spews into people’s homes.
The Health and Ed Board has largely stayed on the sidelines of these disputes – even though it’s responsible for making sure landlords offer clean and safe affordable housing for people with low to moderate incomes.
The Health and Ed Board did not respond to an emailed summary of MLK50’s findings and a list of questions.
Close observers of the Health and Ed Board blame a lack of coordination with code enforcement and administrators who believe the indoor inspections are beyond their reach.
“Ever since we’ve been watching the board, we’ve seen this contradiction a lot. It’s a weird situation, and I can’t really understand it,” said Austin Harrison, a housing researcher and, until recently, an organizer with the Memphis Interfaith Coalition for Action and Hope. “I’ve asked everyone where this policy of inspections just being external comes from, and no one can point me to anything.”
Troubled from the start
Code enforcement records suggest that the Pinebrook Pointe Apartments were troubled before KeyCity’s ownership.
Health and safety inspectors had already visited an apartment once in late 2019 for a leaky ceiling and the presence of a mold-like substance. KeyCity Capital, a Texas real estate investment firm, purchased the distressed 240-unit property in late 2021. The company vowed to make improvements, including to the roof, when it asked the board to renew a pre-existing PILOT deal for another 10 years.
Pinebrook Pointe is a cluster of 16 mid-rise buildings nestled on a busy section off Winchester Road. KeyCity executives previously told MLK50 that the firm had spent $15 million across its six properties in the region, including roof repairs at Pinebrook. The county planning office issued a permit to seal the roof on a building with a silicone coating and to remove and replace shingles.
It’s unclear which buildings were targeted for the work. But the job was valued at about $32,490, records show. It’s the only permit on file for roof work at Pinebrook Pointe. County officials said the final inspection was never completed.
Over the next four years, the roofing problems never stopped.
In nearly half of the 40 complaints MLK50 examined, inspectors raised concerns about leaks. Records show the issue was present in at least 11 different apartments. The volume of complaints peaked in 2021 and remained steady during the first few years of KeyCity’s ownership before the Health and Ed Board intervened.
In 2020, code inspectors found water from one leak running down the wall in the main hallway of building H; they could see the water roll across the ceiling into a nearby apartment.
In 2021, a resident complained about a long crack that had formed in the ceiling of their unit. The inspector photographed water dropping into a pot on the ground.
In 2022, a chunk of drywall fell from the ceiling of an apartment due to water leaks, leaving wood beams exposed in the living room.
In 2023, code enforcers entered the No. 2 apartment at 4379 Andorra Court and found a unit in need of air conditioning. In one bedroom, a water ring had formed on the ceiling from a leak.
In 2025, inspectors were alerted, once again, to roof leaks at 3529 Mediterranean Drive. They’d already cited the owner after visiting the location four years before. Code enforcement found similar concerns again: roof leaks, ruined carpet and walls coated in mold.
In each citation, code inspectors implored the landlord to make repairs, warning of a future court summons and financial penalties. Indeed, MLK50 previously reported that an Environmental Court judge assessed the owners more than $4,200 in fines and fees.
Gaps in inspections
In October 2023, Health and Ed Board members agreed that KeyCity Capital had defaulted on its agreement to provide quality housing.
They cited the “poor physical condition of the project creating significant health and safety issues” for their decision, according to a letter sent by the board’s attorney, Charles Carpenter. The letter specifically named five reasons: an unsecured fire-damaged building; several broken windows and at least one sliding glass door; uncovered electrical boxes and damaged gutters and downspouts on the roof.
There is no mention of the roof issues in the letter. But their decision triggered closer monitoring by the board’s staff, including monthly unannounced visits. MLK50 obtained copies of the surveys that monitors conducted over 18 months starting in January 2024.
They consistently scored the property in three categories: external conditions, tenant benefits and safety and security. The reports show that the scores — and the corresponding conditions — remained largely unchanged over time.
One of the most pressing issues — a burned-out building — stayed the same.
In February 2024, monitors snapped photos of the boarded-up structure with a tangle of caution tape wrapped around the entrance. They also noticed “several broken windows” and “what looks to be raw sewage on the side of the building.”
Still, they scored the outdoor conditions at 13 out of 20 points.
A year later, the monitors were not enthusiastic about KeyCity’s progress: The burned-out building was unchanged. So were some of the potholes, broken windows and excess trash, documents show. But in February 2025, the monitors gave the property’s external condition a score of 12 out of 20 points in their inspection.
When directors of the Health and Ed Board reversed its legal default decision, they relied — at least in part — on a verbal account of the same staff reports.
Harrison said avoiding indoor inspections leaves a critical gap in the board’s oversight process. He said their system seems designed to address simple aesthetic concerns instead of the systemic problems that impact the health and safety of tenants.
“There’s no real explanation for why they would do that other than they’re just trying to check the box, ” Harrison said. “I think if the staff was given the directive to go inside and to look at these systemic issues, I think they would do a good job.”
Michael Finch II is the enterprise reporter for MLK50: Justice Through Journalism. Contact him at mike.finch@mlk50.com
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