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By Michelle Conlin
(Reuters) – When the temperature dropped near zero in Columbus, Ohio, in mid-October, the kids had no heat. The gas had been cut in their apartment for non-payment. DaMir Coleman, 8, and his brother, KyMir, 4, warmed up in front of the electric oven.
The power, too, had to be disconnected. Soon there may be no more oven, no light, and no internet for online education. The boys’ mother, Shanell McGee, had already turned off her cell phone and feared she would soon be evicted from their $ 840 a month apartment. The dilapidated unit consumes nearly half of her salary from her work as a medical assistant in a clinic, where she works full time but receives no health benefits.
Just 23 km northwest of the McGee neighborhood, Kiki Kullman is living one of the best years of her life.
The real estate business she runs with her family just sold the most expensive house in its history: a 13,000 square foot estate, listed for $ 4.5 million, which came with an elevator and bathroom. classic car exhibition. And at the end of October, Kullman closed his own home – a three-story, $ 645,000 colonial, painted stately white with a front door flanked by columns, a nice place for his twins of two. years to grow up.
Columbus illustrates the economic divide driving America’s coronavirus crisis.
Related: 51% of Older Americans Say COVID-19 Economy Worse Than 2008
Professionals like Kullman are thriving, in part thanks to the Federal Reserve’s pandemic-induced policies that have supported the stock market and fueled sectors such as real estate with historically low interest rates.
For many low-wage workers, the crisis sparked a cruel surge, toppling families like the McGees who were already living on edge. Across the country, millions of people, including hotel workers, retail clerks, waiters, bartenders, airline workers and other service workers, have lost their jobs over fears of the COVID-19 have crushed consumer demand.
Economists call this a “K-shaped” recovery, in which those at the top continue to climb while those at the bottom see their prospects worsen.
Ned Hill, professor of economic development at Ohio State University, called this downward slope of the K “big and wide, long and ugly.” He said there was little hope of a return to normal as long as the coronavirus continued to spread relentlessly in the United States. In Ohio, COVID-19 cases are on the rise and reached a record 3,590 new cases on October 29. In Columbus alone, at least 643 people have died.
“People’s jobs and incomes are gone, and they won’t come back until the threat of death to people from the virus subsides,” Hill said. “That’s it.”
Located in central Ohio, halfway between Pittsburgh and Indianapolis, Columbus is a city of about 900,000 people. Home to Ohio State University and the state capital, its employment is rooted in industries such as hospitality, education and health, government, and professional and business services.
This mix allowed it to fare better during the downturn than some of the other Rust Belt towns that are more heavily dependent on manufacturing. Columbus’ September unemployment rate of 7.5% was lower than the national average of 7.9%. But like the rest of the United States, its frontline and modestly skilled workers have come under the harshest criticism.
The divergence in fortune is visible in the city’s housing market.
For those with the means, like clients of realtor Kullman, low interest rates have meant less expensive mortgages, allowing them to afford larger homes. Columbus is just one of four US cities – along with Cincinnati, Kansas City and Indianapolis – where homes sell in less than five days on average, according to real estate research firm Zillow.
“It’s crazy to see Columbus priced at a million plus getting multiple deals and all-cash offers,” said Kullman, 36.
For tenants hammered by the recession, housing is a precarious business.
During the early days of the pandemic, as Ohio residents took shelter in place, evictions in Columbus plummeted, thanks to local and federal protections to keep tenants in their homes. But since September, 1,774 eviction cases have been filed, far exceeding summer levels, according to the Princeton University eviction lab, which tracks evictions. The Greater Columbus Convention Center now serves as a bustling eviction court.
These filings came despite a Sept. 4 decree from the U.S. Centers for Disease Control and Prevention (CDC) banning all nationwide evictions until Jan. 1 to prevent an outbreak of new homeless people from contracting and spread the coronavirus. Under the moratorium, landlords cannot evict tenants who can no longer pay rent because their income has been affected by COVID-19.
But landlords are not required to inform tenants of these protections and are free to sue eviction. Only tenants who are aware of the CDC ban, are eligible and take legal action to assert their rights can end their evictions. Of the 24 cities tracked by the Eviction Lab, Columbus is one of the few where evictions did not fall after the ban.
The fallout can be seen across Columbus. Local money from federal aid to help cash-strapped tenants pay rent was tapped in September. Food banks are running out of basic supplies and homeless shelters are at full capacity, community advocates say.
Utility closures have escalated to the point that lawyers for the Legal Aid Society of Columbus have resorted to personal bankruptcy petitions to get tenants to keep their heat, lights and water on.
If current conditions persist, and without a new round of federal relief, as many as 40 million people could be at risk of deportation in the coming months, according to the Aspen Institute, a think tank. In a typical year, 3.6 million eviction cases are filed.
“BEING POOR COSTS YOU”
Even before the pandemic, McGee, 29, was struggling financially. In 2014, she bought a 2008 Chevy Malibu on corner lot at 22% interest. She said the junker stopped running a long time ago, so she stopped paying in 2016. McGee said she offered to return the vehicle, which has 176,475 miles, but the lender would not take it back. .
In March, McGee’s resident boyfriend lost his job at a fast food restaurant while Ohio was on lockdown, slashing their household income. In August, he was diagnosed with COVID-19 and the whole family had to be quarantined. That same week, McGee received a call from her employer, telling her that her lender had obtained a court order to garnish 25% of her salary to repay the more than $ 10,000, with penalties and late fees, which she still owed. on the car.
This left him with a take-home pay of $ 728 every two weeks. She couldn’t afford school supplies for her sons and had to borrow money from her mother to get to work in her boyfriend’s car.
“It was heartbreaking, it was all of a sudden,” said McGee, who wears rectangular glasses and has a broad, easy smile.
She enlisted the help of Paul Bryson, an attorney for the Legal Aid Society who filed for bankruptcy in October to have McGee’s utilities reactivated and the garnishment frozen. The court approved the petition, but not before McGee’s lender took $ 1,023 from his salary.
“Being poor costs you a lot of money,” Bryson said. “Even before the pandemic, someone’s entire life falls apart when they receive garnishment. And now? If nothing is done, we’re just going to have a lot of people on the streets.
McGee’s auto lender, Columbus Mortgage, did not respond to requests for comment.
LIVING THE DREAM
For years, Kullman, the real estate agent, has fantasized about living on Bedford Road, a coveted address in the suburb of Columbus.
In the more upscale neighborhoods of the region, lavish homes that are perfect pandemic compounds, with amenities like home offices and spacious basements for online education, can sell out in a day, often with multiple cash offers well above demand. price. Kullman said some buyers submit offers without ever visiting a home. The most desperate accept “no cure” inspections, which means they will not ask for concessions if the inspection reveals a major defect. Others, she said, have allowed “crazy escalation clauses with no caps.” In real estate parlance, that means they’ll beat any other offer, regardless of the price.
“You have to give up your life to get the house you want,” Kullman said.
In August, Kullman, who runs the Kullman Group at Street Sotheby’s International with her husband, father and sister, discovered that a couple who lived on Bedford Road were about to move. She made an offer before the house hit the market and the owners accepted. The Colonial is right next to his sister’s house; their children will share lessons.
Kullman is aware of her luck amid the pandemic and the mean hand the coronavirus has inflicted on the city’s most vulnerable.
Her husband is dealing with a landlord who sells a portfolio of homes in Columbus’ low income neighborhood of Linden. Non-paying tenants of these properties have received eviction notices.
“It’s night and day, what we see here,” Kullman said. “It’s not what you expect in COVID. It’s sad but it’s true.
(Reporting by Michelle Conlin in New York; Editing by Tom Lasseter and Marla Dickerson)
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