COVictions
A week into September, a Mobile County renter appeared before District Court Judge Spiro Cheriogotis. The renter said he caught COVID-19 and had been out of work since April. Four months behind on his rent, he owed $4,950 for the house managed by Keith Realty, plus costs. Both sides entered court with an eviction agreement that provided the renter 30 days to move out.
Cheriogotis said the agreement sounded fair, but he also said he was required to inform the renter of new eviction protections. The renter, facing homelessness, had been unaware that the Centers for Disease Control had just issued a new moratorium on evictions that would last through the end of this year.
The renter requested the protection of the CDC edict so he could continue to stay in the rental house.
Cheriogotis ordered the renter to appear in court two weeks later with a plan to make partial payment of the back rent and to seek government assistance. After court, Cheriogotis described the CDC order as “complicated.”
Like so many aspects of pandemic life, there are complications with no easy answers. The pain reaches all sides but seems to hurt those who have the least the most. When it comes to housing, many said it’s going to get a lot worse before it gets any better.
“The CDC order pushes these ‘COVictions’ (evictions that can be directly tied to income loss from Covid-19) further down the road,” Cheriogotis said. “It provides much-needed protection for renters, but it leaves many landlords with bills piling up and no recourse. Landlords have mortgages and expenses to pay, and the potential for bankruptcy is very real. We saw this in the housing crisis of the early 2000s.”
Jonathan Keith, broker for Keith Realty, said “Most of our renters are low-income with credit challenges. How are they going to pay everything they owe on January 1, when their rent will be due? They aren't going to have it then, either.
“Government paying the rent isn't the answer. People have to make an effort to pay, and we will work with them and put them on payment plans. The majority of our renters who are struggling are trying to pay, and we are doing all we can for them, beginning with waiving late fees.”
Keith Realty manages 540 single-family homes in Mobile. Average rent is just shy of $700 a month, which is a little below the market average in Mobile.
Keith said that with stimulus checks and additional unemployment payments, most tenants kept up until now. But he is starting to see a change, and he is hearing the same stories over and over about people being out of work not able to pay.
“I know the Coronavirus is bad because my family and I had it,” Keith said. “We are trying to figure this out as we go. The first state and federal moratoriums on evictions were limited to those with Section 8 vouchers and government loans. The new CDC order reaches farther, and the effects are more uncertain. If this is the way it is, landlords are in trouble. If we can't collect rent, we can't stay in business. We lose thousands of dollars with each evicted tenant.”
Eviction cases increased at the Legal Services of Alabama's Mobile office after Alabama Gov. Kay Ivey’s moratorium expired in June. LSA provides free legal aid to help people find their way out of poverty. From June through August last year, LSA had 56 eviction cases. That number doubled to 111 during the same period this year.
Data from Michael Forton, Director of Advocacy for LSA, tells a big part of the story of the economic effects of the pandemic in Mobile. Since March, LSA reported a 1,266 percent increase in unemployment cases, a 900 percent increase in food stamp cases, a 91 percent increase in eviction cases and a 45 percent increase in divorces involving domestic violence.
“LSA traditionally deals with low-income clients,” Forton said. “But March and April brought in a class of new poor, who didn't understand how to function without money or where to find help."
"I think there is more to come," LSA managing attorney Ann Brown said. "I assigned five eviction cases to our lawyers this morning. But we just see the cases who come to us. The actual number of evictions is much higher. They get the notice and avoid eviction by moving into a motel or a family's house, without knowing their rights. We are seeing lockouts where the landlord gives a self-eviction by turning off the water and utilities so the client can't live there. Instead of using the correct mechanism of court, they are using unlawful manners.”
Brown said an eviction on a credit report is devastating. It indicates increased risk, making it harder to find a place to rent or to get other credit. "All of these issues can pile up on our clients and make life harder for them,” she said. “The virus adds to the problems our clients already have.”
Derek Boulware, executive director of Housing First, an agency that helps homeless people find housing, said enrollment March 1 through Aug. 1 increased by 279 adults or 20 percent. The people who are one step away from homelessness – those staying with a friend of a family member – increased by 59 percent.
“Last year, 3,207 people came through Housing First,” Boulware said. “Of those, 724 exited into housing. Our programs directly housed 394. The need was already superior to the resources, and COVID-19 is making it worse. If things don’t change, we could be shifting from dealing with people who are at imminent risk of being homeless to literally homeless.”
Elizabeth Chiepalich, the founder of the Facebook group Homeless in Mobile, makes weekly rounds, helping homeless people find services and housing or helping families keep the shelter they have.
Shortly after Mobile closed down in March for the Coronavirus, Chiepalich started warning followers that “Mobile could witness a wave of homelessness that would be comparable to the Great Depression.”
At the beginning of August, Chiepalich said the wave was beginning to hit as she was "bombarded with calls from desperate families needing help for the first time.”
Serving the homeless since 2002, Chiepalich said she has seen tough times but none as bad as this. People who are sick and in wheelchairs sleeping outside. Mothers with young children walking away from motels carrying everything they own. All with nowhere to go.
"Yesterday I had five messages begging for a night in a motel," she said. "These are people who've never been on the street before, and they're now living in their cars. It's hot and traumatizing. They're not used to it."
Chiepalich stopped at the apartment of one family she looks after. As she walked up the stairs, two small arms wrapped around her legs, and a young girl with pink bow barrettes said, "We love you, Ms. Elizabeth."
Chiepalich handed out drinks and bananas to Kierra’s three young children then took the eviction notice left by the landlord that morning. The $535 rent for the small studio apartment was due in seven days.
The family of five had been homeless before, but Kierra and her husband, Jeremiah, had found employment and were turning their finances around. That ended when both lost their jobs due to COVID-19.
Jeremiah found another job but had to walk an hour to work and an hour back home. Their car, handed down from family, didn’t run, and they couldn’t afford repairs. Chiepalich offered them a bicycle that she said she would drop off soon.
"At first, we were OK because of the stimulus," Kierra said. "That helped us pay our rent for two months and provide for our kids. That ended, and we got behind.”
Kierra said the family is out of food. She was overwhelmed and didn't want to keep going through this struggle. "My kids are smart, loving and kind,” she said. “I want to do what is best for them and keep them that way."
Pulling away from the apartment, Chiepalich said there are many like Kierra who need help right now – so many that she has had to limit herself to helping handicapped elderly women and women with children.
Chiepalich posted Kierra's story on Homeless of Mobile, which has 3,800 followers, and received enough donations to pay the rent and give the family a month to get back on their feet.
But it’s not just renters and the people on the razor’s edge of homelessness who are in trouble. Longtime homeowners have had problems, too.
Marie Mills’s husband lost his job making $55,000 a year with a construction company due to COVID-19. They haven’t paid the $1,100 mortgage in three months on the house they purchased last year in Mobile.
“The day they ended the first ban for evictions and foreclosures, a guy from the mortgage company showed up at our door with foreclosure paperwork,” Marie Mills said. “He was rude and told us we should have tried harder. He said he talks to many people in our shoes every day.”
Mills said she and her husband have been applying for jobs everywhere, but they hadn't gotten callbacks from any of their applications.
“Luckily my mom and stepdad are helping catch our mortgage up and letting us live with them,” she said. “We will rent out our house until we can find a job and can afford the mortgage again. Our three kids are scared. My husband and I have been together for 20 years, and I have seen him cry more in the past few months than in the 20 years that we have been together. We had a good life before the Coronavirus.”
Marie Mills said they filled out the packet for COVID-19 assistance and never heard back from the mortgage company. They were left on hold for hours, and phone calls weren’t returned.
She said they requested a deferment that would put missed payments at the end of the loan. Instead, they were approved for a 90-day forbearance, suspending the foreclosure process for 90 days.
“At the end of 90 days, we are expected to have every dime we owe, but right now we are getting $158 a week in unemployment,” Mills said. “That is barely enough to cover utilities. Even if we both get jobs, we won’t be able to go to work at the same time because one of us has to be home during the day to work with the kids. I’m scared for our children, our county, our state and our country.”
Jonathan Keith, the realty broker, said this is a strange time in real estate because the housing market is hot, and interest rates are low.
“People can afford more house, but they are paying too much,” he said. “The market is inflated, and it is starting to feel like 2008 before the crash. The difference is we don't have subprime loans. I think we have hard times of evictions and foreclosures ahead.”
Greta Wheeler said she wishes she and her husband, Skip, could have kept their two-story home with four bedrooms on five acres in west Mobile. The white house with a big porch and a red front door was the nicest home they had lived in during their 25-year marriage, and they planned to retire there.
Skip Wheeler was making good money as an inspector at chemical plants, looking for cracks in metal so the plants don't blow up. “He worked there for 10 years,” Greta Wheeler said. “I worked at Arby's because it was something to do, and I loved working there. Everything was going OK.”
The company sent Skip home for a couple of weeks at the beginning of the pandemic. They cut his pay by 20 percent, then cut his hours. When it rained, they told him he had to go home. Soon, the company merged departments and let Skip and other employees go.
“This is another example of a big corporation not giving a s**t about the little guy,” Greta Wheeler said. “There were 50 other guys in his department that this happened to.”
She said they had never missed a house payment before the pandemic. When they hadn’t made a house payment since March, they realized selling their home and moving in with family in West Virginia was the only way to avoid foreclosure.
“I am going to my mom's, and Skip is going to his mom's,” she said. “We are happy about seeing family, but Skip and I will be three hours apart and starting over from scratch. Everything we worked for is gone. I am 53 and have to move back in with my mom. Right now, all I have to show for my life is a truck, and I don’t know how much longer can I hold on to that.”
The house sold easily, and Greta Wheeler said they should have made a $40,000 profit. But that money went to paying off their mortgage, bills, and moving expenses. There was nothing left for a down payment on another place to live.
“I am sitting in our empty dream house after packing up our U-Haul,” she said. “There is no way to get back what we have lost. Thank God we have our parents. Without them, I don't know where we would go. How sad is that? It could be worse. We could be homeless or caught the COVID and died, I guess.”
The wave of evictions and foreclosures might also be accompanied by a wave of bankruptcies. Bankruptcy filings in the U.S. Bankruptcy Court Southern District of Alabama from March through August were actually down 40 percent from 2019.
“Bankruptcy filings are down because you need income for the Chapter 13 wage earner plan that pays creditors back over three to five years while you keep your house and car,” explained Clerk of Court Andrea Redmon. “People are still unemployed, and it costs $750 to $1,000 to file. We expect a jump in filings in the near future.”
After COVID-19 started, debtors in Chapter 13 started requesting suspension of payment plans, an increase of almost 250 percent from 2019. They are now converting from Chapter 13 to Chapter 7 and liquidating assets to pay off their creditors.
“They are discharging their debts because they don’t have hope in finding another job,” Redmon said. “They file Chapter 13 to save their house or car. If they convert to Chapter 7 they have lost their house and car. They start fresh with nothing.”
Elizabeth Chiepelich said she doesn’t have much hope for the passage of additional government assistance and believes the wave of homelessness has just begun. She advises her clients to pay rent first and use all stimulus, benefits and refunds on housing payments. They can get food at local food banks, she tells them, and limited charitable funds are available for utilities. She updates Homeless in Mobile with resources for jobs, furniture, clothing and meals.
Chiepelich prays with each family before she leaves them: “Jesus, they've been through tough times, and I know that tough times may be coming. God, I just pray that you will be there walking them through this trial. They're going to get through this situation. Bless them, protect them, and be with them.”
If you, or someone you know needs help, here are a few resources: Alabama Legal Services (866-456-4995); Lifelines Counseling Services and United Way’s 211 line will connect you to available services; Housing First (251-450-3345); Feeding the Gulf Coast (251-653-1617).
(This story ran in Lagniappe in September 2020)
