Portland’s complaint-driven system for property maintenance enforcement is disproportionately racking up fines for homeowners of color living in gentrifying neighborhoods, a new city audit found.

The report, released Wednesday by the City Auditor’s Office, analyzed property management complaint and enforcement records from 2013 to 2018. The current system allows any Portlanders to submit property maintenance complaints, like a blocked exit, tall grass, or unsafe sidewalks, to the Bureau of Development Services (BDS). BDS then investigates the complaints and, if the complaints are valid, gives homeowners a deadline to get into compliance with city maintenance codes. Homeowners who don’t—or can’t—fix the maintenance issue by the deadline can face fines in the thousands of dollars.

By following a complaint-based system for property maintenance enforcement, the city is inconsistently enforcing its property codes and upholding a system that contributes to the displacement of low-income and non-white Portlanders, city auditors found.

According to the report, the number of property maintenance complaints in each neighborhood tended to increase as the percent of people of color who live in the area, the change in median home price from 2013 to 2017, population, and travel time to downtown increased. Complaints also increased as the percent of the population who speak English as their only language, percent of people over 25 with a graduate degree, and percent of people who commute by walking decreased.

“The data show that the state of our system produces disparate outcomes based on race,” the report reads. “It shows there is a problem with the City’s continued use of a complaint-based enforcement system that began in a long-ago era of explicitly racist governance.”

In short, the auditor’s office finds that wealthy white people are moving into low-income and racially diverse neighborhoods and complaining about their new neighbors’ property—and those complaints are putting people into debt.

Homeowners who do not resolve their code violation by the city’s deadline are fined, and those fines continually accrue additional fines and interest the longer they remain unpaid. For example, if a homeowner does not fix a loose gutter within 30 days, they are fined $299 each month after. If the gutter still isn’t fixed after three months, the fine doubles to $598 every month. The city, which funds the BDS program through the collection of the fines, will then place a lien on the property to ensure they receive payment for the accruing fines.

In one case, an elderly homeowner with a severe brain injury accrued over $136,000 in property maintenance enforcement liens because of complaints about a disabled vehicle on his property, a tarp over his carport, and an unfinished home remodeling project. The city’s liens triggered the bank to initiate foreclosure proceedings on his house.

The increasing fine model is intended to pressure homeowners to fix maintenance issues quickly, but for property owners who lack the funds to fix the maintenance problem in the first place, the fines just add additional financial burden. The audit describes one homeowner who accrued nearly $30,000 in enforcement liens because she didn’t fix the peeling paint on the exterior of her home. While her neighbors were complaining about the peeling paint, the homeowner was dealing with a family member’s mental health crisis, caring for her aging parents, and struggling to make ends meet.

The report recommends the city find a new maintenance enforcement system that does not rely on fees and liens—a recommendation the city has received and dismissed twice before, in 2008 and 2012. The audit also advised that BDS connect with homeowners disproportionately impacted by the system to gather recommendations on how the city should change its maintenance code.

In a letter responding to the audit’s findings, Commissioner Dan Ryan—who oversees BDS—and BDS Director Rebecca Esau agreed with the recommendations and noted the bureau has already started working on loosening the requirements for low-income and disabled property owners to qualify for the city’s Lien Reduction Review program, which provides lien reductions from 50 to 100 percent.

“BDS is keenly aware of the disparities and barriers created for marginalized members of our community through enforcement fees and liens, and we agree with the Ombudsman’s recommendation for change in this area,” the letter said.

Markisha Webster, director of the Office of Equity and Human Rights, also responded to the audit, noting the property maintenance program was another example of Oregon’s racist housing policies.

“For longer than our history accurately documents, Black, Indigenous, and communities of color have experienced disparate impacts of racist policies and practices threatening their safety and well-being,” Webster said. “While the content of such reports can be alarming, discouraging, and multifaceted in nature, this type of information sharing can also provide the context for eliminating discriminatory and racist policies and practices in our City services.”