The plan is to expand the utility's North Service Center near Hollywood and Chelsea. MLGW says its is acquiring 130 lots, but 70 of those are vacant and 19 are abandoned.
The utility has already purchased and demolished many homes in the area — leaving plots of vacant land that many who still live in the aging neighborhood must look at.
Some residents have argued that their tactics are preying on an already under-served community.
Janice Mondie, who lives in the community, says she feels the predominantly African-American community is being discriminated against. She confirmed through an e-mail that she filed a complaint with the Department of Housing and Urban Development.
"It's a shame that they came and pushed the poor people our of their homes," said Mondie. "You have people who have been living here 30 to 40 years."
Mondie acknowledged that her neighborhood is a "fixer upper," but she also gave a list of reasons why expanding the company's footprint into her North Memphis neighborhood was wrong.
Mondie explained that certain entities were notified of expansion, and residents who stay will have to deal with more heavy equipment running through the area.
But MLGW maintains many residents have been receptive and said they never forced anyone from their home.
Some residents even came to the utility wanting to sell their homes, MLGW said.
LouAnn Thomas, 92, is a fixture in the North Memphis community and has lived here since 1936.
"I've been here a long time," said Thomas. "Everybody in the neighborhood call me Mama Lou."
With trash scattered in vacant lots, Thomas knows her neighborhood has seen better days. She said doesn't really have an opinion about the HUD investigation — what matters to her is improving the area she's called home for decades.
"It makes me sad when we can't keep it up," said Thomas.