Aurora hit hard by recession

Date: May. 4th, 2009
Contact: Kevin Simpson - Denver Post Phone: 303-954-1739

Along the Front Range, no ZIP code has been hit harder by the twin blows of foreclosure and unemployment.

At first, it looked as if David Fedeli might catch a break.

Although his southeast Aurora home was listed among the 237 foreclosure filings in that part of town in the first quarter of 2009, he and his wife, Kim, weathered the process in order to renegotiate a burdensome interest-only loan.

Soon afterward, though, Fedeli, 50, joined 1,406 others in his area on the unemployment rolls when his job with a printing company evaporated.

But here's the economic indicator that hits him right where he lives: 80013.

His ZIP code ranks first among the 222 located along Colorado's Front Range in both first-quarter foreclosure filings and total unemployment claims in March — a distinction that, at first glance, seems at odds with

Yet the effects of the recession have slammed hard into its neighborhoods, businesses, schools — almost any institution you can imagine. Foreclosures drag down real estate prices and decimate neighborhoods. Empty seats populate local restaurants. Schools see students needing not just a free lunch, but medical care and a place to live.

And there's been a run on the local food bank.

"The 1-3," as some locals call it, sprawls across southeast Aurora, where dense residential pockets tend to dramatize the raw unemployment and foreclosure numbers. It runs roughly from South Chambers Road east to Gun Club Road, and from a line about as far north as East Jewell Avenue to as far south as East Orchard Road.

The ZIP code's estimated 70,000 mostly white-collar residents earn a median household income of about $68,000. With more than half its workers in sales, office work or professional jobs, the area has been particularly vulnerable to Colorado's economic downturn.

Pointing out the foreclosures

"This recession is a lot different than any of the ones that I can remember because it's touched everyone," said Gary Horvath,

Jason Stealy carries a cabinet at a multi-family garage sale Friday on Aurora's South Bahama Street. The road has acted as a fault line of the recession. Stealy, married with four kids, lost his job recently. (Judy DeHaas, The Denver Post )
research director at the University of Colorado's Leeds School of Business. "It's hit all sectors. It's much deeper than we anticipated."

Horvath speculates that many people who live in the 80013 ZIP code had jobs in one of the many big retail projects in the surrounding areas. When retail sales plummeted, they lost their jobs — and their homes.

From his front porch in The Conservatory, an enclave of 3- and 4-year-old homes in the $250,000 to 350,000 range, Fedeli pointed to several houses hit by foreclosure.

"It's the young people getting killed," he said. "It's the new buyers, getting those 110-percent loans. I remember when we were buying, my lender told me, 'If you can fog a mirror, I can get you a loan.' "

Those days of easy money are barely a memory amid the economic realities of 80013, where over the past 15 months, there have been more than 1,300 foreclosure filings.

Erika Stealy, 31, scanned the stretch of South Bahama Street where she and her husband, Jason, rent a circa- 1984 split-level and nodded her head at the foreclosure and unemployment numbers.

"That sounds about right," she said.

The homes along this meandering street once represented a gleaming slice of the American Dream: one-story, two-story and split-level structures built in the mid-1980s with the added attraction of nearby Cherry Creek schools.

Then financial fortunes shifted, and the street became an economic fault line that has swallowed up huge chunks of equity

Aurora's zip code 80013 has one of the highest foreclosure rates in the Front Range. This is the Conservatory development which has a lot of houses that have been taken back by the banks. Judy DeHaas, The Denver Post (THE DENVER POST | JUDY DEHAAS)
and left many people owing more than their homes are worth.

Economic fortunes have fallen like dominoes here.

Jennifer and Josh Myers own the house where the Stealys live. But after Josh returned about a year ago from his Department of Defense job fixing vehicles in Iraq, he couldn't find work as a master mechanic.

They got behind on house payments but were able to restructure their adjustable-rate mortgage. Meanwhile, they moved to Oklahoma, where Josh could find work.

But they couldn't sell their house.

They started the price at nearly $300,000. But after only two showings in 10 months, an appraiser told them they'd be lucky to get $140,000 — far less than their $170,000 loan — because all the bank-owned properties in the area had driven prices down.

That's when they decided to rent it. As it happened, the Stealys were in desperate need of a place to land, having just been told that their landlord had filed bankruptcy and they had to be out in 30 days.

But not long after striking the rental deal, Jason Stealy, a tow-truck driver, lost his job. He and Erika blew through savings in about a month and then had to borrow from family to keep up with their $1,260 monthly rent.

"I can't remember a time it's looked this bad in Aurora," Jason said.

Malaise seeps into schools

This weekend, they've teamed with neighbors who also lost jobs to host a yard sale they hope will raise some cash to tide them through. Meanwhile, their landlords are trying to be flexible, even though they're losing money.

"If they were trashing the house, or habitually late with payments, it would be so easy to fly back and kick their butts out," said Jennifer Myers, now living in Claremore, Okla. "But it's harder. They're good people, and they're trying. We know they're trying."

At nearby St. Michael the Archangel Catholic Church, parish administrator Teri Vasicek has heard rumblings of people being laid off, but she hasn't seen much of a change either in requests for support or a drastic decrease in offering collections.

Still, the church is budgeting as if it will happen.

"It's a community trying its best to live the dream," Vasicek said, "but they're grappling with what the dream is, what they can and can't afford."

Predictably, the financial malaise has seeped into area schools. At Aurora Public Schools' Rangeview High, principal Pam Turner said free and reduced-price lunch numbers have risen more than 11 percent over the past three years.

But more students also need help paying for activity fees, college tests and supplies for elective courses, such as art and business.

Pat Grant, Rangeview's nurse, has seen a stream of students seeking basic medical and dental care and even eyeglasses.

The Cherry Creek School District, which also serves portions of 80013, has seen a slight uptick in the free or reduced-cost lunch program. A more acute reflection of the economy can be seen in displaced families moving in with neighbors to remain in the district, said spokeswoman Tustin Amole.

Aurora schools have witnessed the same dynamic. Rangeview's Turner said "it's becoming a common discussion" among administrators that families are forced to double up. Sometimes when they investigate, they find that a family that lost a home is living in someone else's basement.

"What we are seeing now are multi-family households," Turner said.

In the Yale Elementary area between South Chambers and South Buckley roads, many families rent homes — some from owners in foreclosure — and soon find themselves on the street.

"People have this notion that the middle class is a protected class, but the bar just went down a few notches," Yale principal Kerry Lord said. "I'm seeing that families are afraid and unsure and uncertain. It's hard to be certain in these times."

"I've never seen it so slow"

That applies to businesses as well.

At the Taste of Philly restaurant at the Hampden Crossing shopping center, part-owner Jamie Chamberlain has enjoyed a steady clientele — but he attributes that to local buzz surrounding his February opening.

Across the street at the 7-month-old Honey Bee Asian Bistro, the lunch crowd on a recent day consisted of one lone customer. Twice-a-week regulars now appear only every month or two.

"Bad, bad," said part-owner Helen Du, describing April. "I've never seen it so slow."

There's other evidence of economic distress tucked in a commercial enclave at South Tower Road and East Hampden Avenue.

Arthur Diaz sits at his desk in the Allstate insurance office, where he spends hours on the phone counseling local customers who want to trim or cancel their insurance policies.

He took this job only after his business rehabbing foreclosed properties for Fannie Mae and Freddie Mac went under.

With so many foreclosures on their books, they no longer had the money to invest in fixing them all up.

"I'd make a list of things to be fixed and send it to Fannie Mae," Diaz said. "And they'd say, 'No. Just a paint job and linoleum.' I can show you properties I worked on four years ago, and they're still sitting there."

The city of Aurora has implemented some new programs to alleviate problems with foreclosed homes that are abandoned or become eyesores.

This month, the city began requiring banks and holders of foreclosed homes to register their properties with the city. Those that don't are subject to fees and liens until the city is reimbursed for cost of maintenance and repairs.

Also, the city is purchasing foreclosed homes, then fixing and selling them to low- to moderate-income buyers at no profit.

Withdrawals from food bank

Requests for assistance at the Loving Hands food bank near East Sixth Avenue and Airport Boulevard have spiked — and they're no longer dominated by the chronically homeless.

Executive director Terry Alexander cited two sobering statistics: At least 20 percent of her increase in food distribution has been to families seeking help for the first time; and the number of families in need of food has increased at least 35 percent over the same time last year.

People like Fedeli, one of the faces behind the numbers in 80013, have refused to succumb to the daunting economic stats. He felt lucky when he got hired recently as an installer at Comcast, even though he'll start at less than half the salary of his old printing job.

Now, he's more aggressively marketing the art he produces in his spare time — vivid oil paintings of surreal landscapes. And he's bartering skills such as Web design in exchange for services such as gallery space or help finishing his basement.

"We've never been affected by anything like this, because we were always on top of things," Fedeli said. "Both my wife and I had great credit scores. We always had just enough to have what we need and try to live within our means.