According to a state civil rights investigation, the landlord posted the sign after a black teenager swam in the pool, claiming the girl's hair products clouded the water.
"Of all the things that have changed, you wouldn't think that that would still be a problem, being black," said neighbor Ashley Evans.
"It makes me sad. It also makes me wonder what people are thinking," added neighbor Jennifer Brocker.
Earlier, the Ohio Civil Rights Commission found that the landlord violated the state civil rights act. It voted unanimously Thursday to not reconsider its finding.
The teen's family has since moved.
The case will now go to the attorney general's office and the landlord could be forced to pay damages.
The Associated Press contributed to this report.