Transcript edited for length and clarity.
Clay Wallace
Right now in Lexington's Cardinal Valley neighborhood, hundreds of families are living with broken heat, mold, and ceilings that have collapsed in buildings that landlords have refused to fix. The city's condemned about 10% of these units, and the fines have topped $425,000. Most of those fines haven't been paid, and the residents are still there. Today, I'm speaking with Adrian Paul Bryant, who covered this story for the Herald-Leader. Thanks for being back here on WUKY, Adrian.
Adrian Paul Bryant
Yeah, thanks for having me. I think this is actually my first time on the station since I've been with the Herald-Leader, so it's a real thrill to be back. It's super exciting.
Clay
So can you tell us what kinds of conditions we're talking about inside these apartments?
Adrian
Yeah, they really vary in a lot of different ways, and you sort of hit some of them at the top. They can be as wide-ranging as some units where the major problem is just that they don't have functioning heat or air conditioning. There's mold growth in a lot of these units. Ceiling collapses was a fairly common one that I saw throughout all the records. Plumbing issues galore - toilets not flushing, bathtubs pooling water because the pipes are clogged, bathtubs not having running water, or bathtubs even spewing sewage out from the drain.
One of the more alarming ones was mold growth on the first floor units because, in the foundation, water had started pooling up because the drainage system in these buildings is extremely old and in disrepair. So, water would pool below these first floor units and just kind of sit there. And then, of course, you have hot days, that creates humidity, that means you get mold growth. That's where a lot of mold growth comes from in houses and apartments. But, in this case, it got so bad that some residents would call the city and say, "I went to bed last night and my floor was normal, and now it's got mushrooms on it."
You can go to some of these apartment buildings right now and look and you can see broken windows with cardboard or a wooden board nailed up on them. The conditions are all over the place. Some apartment units and buildings are worse than others, but it does run a pretty wide spectrum of conditions that are bad in the sense of each individual violation. But when you add them all up and think about them collectively, it's pretty grim.
Clay
For a while, the city wasn't getting as many complaints from residents in this area, and then there was an increase. Why weren't people reporting before, and what changed?
Adrian
A lot of complaints were filed against these buildings, but mostly for grass that had grown pretty tall because the companies just eventually stopped mowing the grass. You'd have some things that are pretty typical at some apartment complexes, like trash around the dumpster but not in the dumpster, and things like that, but a couple of complaints started coming in around some of the conditions in the actual units - mold and broken ACs and things like that - but they weren't coming in in great volume.
It sort of started to unfold because when the city would come and look at these apartments, they'd walk through the buildings and be like, "Oh, this whole building looks like it might be in rough shape." And then it would unravel from there. As the city started realizing how bad a condition these units were in, they realized that they needed to put some more focus into it, but they were having a hard time getting residents to talk to them because this is the Cardinal Valley neighborhood, which has a very high Spanish-speaking population, and is very low and middle income. It's a vulnerable population, and they're scared of talking to the city because some of them may have an immigration status that could put them at risk if they talk to the government. But, most of the time, they were just fearful about their landlords retaliating because they had filed a complaint.
But the code enforcement staff have a bilingual officer. Her name is Cynthia Gutierrez. She is bilingual, speaks Spanish and English, and they assigned her to the whole Cardinal Valley neighborhood. She's the only code enforcement officer in the city assigned to a specific geographic area. Because she speaks the language and has a similar cultural background, she was able to build relationships with the residents in these apartment buildings, and the residents started being like, "Oh, my sister lives a couple of units down and her ceiling has collapsed," or, "Oh, I know someone who lives in the building across the cul-de-sac and her ceiling collapsed because the bath in the unit above her is leaking."
As Gutierrez and the city were able to build relationships with these residents, they began to feel more comfortable and spread the word within the apartment complexes that the city was trying to help, and that there were people they could safely talk to. Through there, the city got the full picture of just how bad a shape these units were in.
Clay
Who owns these properties?
Adrian
So the properties are owned by a company in Pennsylvania called the DeRosa Group. They have apartments in Kentucky - I believe Lexington is the only city in Kentucky they have - but they have some in North Carolina, Pennsylvania, and Minnesota as well. When you look at the property records, each of the four major apartment complexes in the neighborhood that the DeRosa Group owns are under individual LLCs that don't have, for the most part, the word DeRosa in them, so it can be a little hard to track, but it all comes back to the DeRosa Group. They bought most of the properties that they own in Lexington between 2017 and 2019.
They actually used to own more in the city. Notably, they owned the apartment complex, also in Cardinal Valley, on Oxford Circle that last summer saw a carbon monoxide leak that killed a 76-year-old man and sent 11 others to the hospital. The DeRosa Group sold the Oxford Circle apartments earlier this year, and now a new company owns them and has renovated them. They're up for rent, and the city seems pretty happy with the renovation job that they did. But this is far from the first instance of misdeeds that have become public regarding the DeRosa Group's handling of these properties.
Clay
And the DeRosa Group posted a number of videos about how they approach handling their properties, some of which have since been deleted. What did those videos reveal?
Adrian
It's really fascinating. Their Instagram presence and LinkedIn presence is very boastful. They have this aesthetic - if you spend a lot of time on YouTube, you've certainly seen it - where the thumbnail will have this big yellow or green font, and one of the people from the company will be making a very exaggerated face, and the video title will be something like - and this is a real example - "'Women are better investors than men,' question mark, exclamation point, question mark, exclamation point." It's that kind of over-the-top tone.
There are many different kinds of videos on their channel. It's still up, and they still have the overwhelming majority of these videos on there. They only took down the videos that I linked to in the story. There are some day-in-the-life videos where they'll look through different properties, including properties in Lexington, and sort of talk about why they're good investments. And then there's content giving other landlords and investors advice. That's sort of the main hook, because the company has online courses they want people to buy to teach them how to be good investors. Their revenue streams go far beyond just the rent they're collecting from their units.
One I quoted in the story is about how to deal with code enforcement. It's pretty incredible because, at the beginning of the video, they're very openly saying that code enforcement should not make it onto any investor's properties at all, if it can be avoided. There is a quote from Justin Frazier, the asset manager for the DeRosa Group. He says "We at DeRosa want to provide safe living environments, but what we don't want to do is be saddled with extra repairs, extra costs to meet code requirements that maybe don't fall under what is a necessary safe requirement. Or maybe what I'm deeming to be safe doesn't necessarily mean what code enforcement is deeming to be safe."
Later in the video, they talk about how, in this un-named city, they had some issues with code enforcement and decided that maybe if you're not able to avoid code enforcement - which is still what you should be doing - then try to build some kind of relationship with them.
City officials with Lexington said that philosophy was not practiced, at least in Lexington. The city was only able to get two meetings with actual executive officials from the DeRosa Group, in June and July of 2026. Charlie Lanter, the commissioner of housing for the city, told me that they had some phone calls with the company after the carbon monoxide leak at the Oxford Circle apartments last summer, but they weren't even able to get an actual meeting with people after that situation. The attitude and the ethos of their social media presence paints them as this really successful company, but what Lanter and Lee Steele, the director of code enforcement, told me is that when they had these meetings with the DeRosa Group, people from the company said that it was in a ton of debt and they literally could not afford to make any of the repairs.
Clearly, things are not lining up between how the DeRosa Group is presenting itself and what the relationships with the city are, and what the relationship with tenants are, and what the state of the apartment buildings are on the ground.
Clay
And when the DeRosa Group would talk about Lexington specifically, my understanding is that they were actually marketing Lexington's lack of new apartment construction as a selling point to investors.
Adrian
Yes, they absolutely were. They have a portfolio on their website - it was still up as of Tuesday [September 1, 2026] morning - of all the units they own across the country, and they have these packages, mostly tied to individual complexes, that are essentially pitches to investors on why you should invest in the Crystal Garden apartments on Alexandria Drive, or the Preakness apartments on Versailles Road, and so on. Most of those pages have a video, five to twelve minutes or so, that pitches investors. In the ones tied to Lexington properties, Jacob Sandoval - he no longer is with the DeRosa Group, but he was at the time as an investor relations person - he outright says in the video that Lexington does not build a lot of apartments and, because that constrains the housing supply, it's good for investors. One, there's no real competition from other property owners, but also tenants don't have a lot of options for where to go because the housing market is so tight.
The pitch from the DeRosa Group is: we can guarantee high occupancy rates because this city has so little housing compared to demand. These apartments are going to be rented, full stop.
And that bears out in data. There are multiple studies that the city has commissioned, and there's been independent research from journalists and academic groups showing that Lexington is extremely far behind, especially compared to other peer cities like Raleigh, North Carolina, or Knoxville, Tennessee, in terms of housing built per capita. And it has a whole lot of downstream effects on the housing market. One of them is a situation like this, where an investor can buy these apartments, not take care of them, and know that they will be rented because some people have to live somewhere and just don't have a lot of options.
Clay
So aside from building increased housing stock in Lexington, what can the city actively do about it now if the fines aren't changing anything for the residents?
Adrian
The DeRosa Group across their multiple properties has been fined just over $425,000. As of July 31st, they had paid about $87,000 of that. So, clearly, they're not catching up to the total.
Because they've paid so little and it's been long enough, the city can force a foreclosure and force a sale of these properties. They're working on drafting the legal documents to do this right now. They can go to the court system and say "They owe X number of dollars in fines, they have not been paying them, and they have demonstrated that they are unable or unwilling to pay them in the future - so please, judge, force them to let go of these properties."
That can take many months, because they have to file this paperwork for each individual property the company owns. It'll be a long, drawn-out process, but the city's able to do it, and they actually have done it in the past.
There was a company based out of Cincinnati called Vision and Beyond that sort of preceded the DeRosa Group in terms of replicating the same pattern. They owned several hundred apartment units across a dozen buildings or so in the Cardinal Valley neighborhood, let them fall apart, didn't make repairs. The city fined them several hundred thousand dollars, the company didn't pay, and then the city was able to force foreclosure and the sale of those properties. That auction was actually last week, August 24th to the 26th. Charlie Lanter told me that it was right around the time the city started doing the foreclosure paperwork on the Vision and Beyond apartments that the DeRosa Group apartments started to fall apart. So, it's probably over a thousand units between the DeRosa Group and what were once the Vision and Beyond apartments that have been in a deteriorating state for the past eight or nine years. It's a much bigger systemic issue.
But one of the many sad parts about it is that, in both of these cases, the companies weren't paying the fines, and so the city was able to force a foreclosure. But there's a very real chance that if they had been paying the fines but not making the repairs, the city's list of options would be a whole lot shorter. There just aren't a lot of legal tools given by the federal government or the state government to cities to address bad landlords who let their property fall apart.
And even to the extent that 66 of the 684 apartment units the DeRosa Group owns are condemned - about 10% - most of them are unoccupied, but that's because the residents chose to voluntarily leave. The city can't force someone to move out of a condemned unit if they don't want to, unless there's a super immediate, clear-cut, life-threatening circumstance. With the Oxford Circle apartments and the carbon monoxide poisoning last summer, that was very clearly a life-threatening circumstance, and the city could force residents to leave and help them relocate. They spent $6,000 relocating 24 households in that case. But when you think about what's going on in the DeRosa Group - having no heat or AC, having a cracked window, having mold - those things clearly add up and impact the quality of life of people and can lead to illness, but they're not going to die tomorrow in a direct causal way from these issues, the way that a carbon monoxide leak will very clearly and directly and quickly kill someone.
So, the city can't force people to leave. And that just goes to show how limited the legal powers cities have, at least in Kentucky, to address situations like this.