Foreclosed and Financially Stranded at the Ramada Inn

Middle-class status is now out of reach for a group of people who, less than a decade ago, were financially secure.


| January/February 2014



Foreclosure

For a growing segment of middle-class families, home is a hotel room.

Photo By Daniel Oines/Flickr

From the outside, it is hard to know that people live in the Ramada Inn. The parking lot is always empty. The hotel sits facing a wide suburban boulevard called Kipling Street, just off Interstate 70 in Wheat Ridge, Colorado. Hotels dot I-70 as it cuts through the 764-square-mile stretch of suburbia that runs from the city into the mountains, but at the intersection with Kipling is a cluster of seven budget-savers that travel websites warn tourists away from. The hotels advertise low prices—ranging from $36 to $89 a night—on neon signs next to gigantic flags that whip in the Front Range wind. Most offer even lower weekly or monthly rates. The Ramada is farther from the frontage road than the other hotels and is harder to notice, with its plain yellow stucco and dimly lit red sign.

Inside the lobby, which has wide windows and a clear view of a long, low mountain called Table Top and the snowy peaks beyond, are plenty of clues that the Ramada is more than just a hotel. Off the lobby sit two sets of washers and dryers that each take a dollar in quarters, and on weekends families use one of the bellhop carts kept in a back hall to roll out baskets of dirty laundry. In the late afternoon, schoolchildren do their homework on the dozen tables where guests have breakfast. Residents sit at the two computers with internet connections. They wander around in sock-clad feet and chat with whomever they run into.

At any given time, roughly 20 to 40 guests are staying long term. Since they pay by the week, they call themselves “weeklies.” To score the cheap rates, $210 for individuals and slightly more for families, they must pay in advance. Residents sign a form that lists the activities that could get them kicked out (mostly involving drugs) and warns that they won’t get reimbursed if they leave early, no exceptions. Some families stay only for a few weeks, some for months, giving the hotel the feeling of a dormitory.

Hotels have always served people who need an off-the-record place to live—sex workers, drug dealers—and the Ramada has its share of people who are hiding out. (Bounty hunters come to the hotel so often that the weeklies know their names and say hi.) But in the aftermath of the Great Recession, the Ramada’s clientele shifted away from such regulars to include suburban families who had been used to staying in hotels only on vacations. Many of the families still had incomes. Some had long been struggling members of the working class, fighting to stay better than broke; others had fallen suddenly out of the middle class.

Across the country, suburban poverty rose by more than half in the first decade of the new century. Families now find themselves navigating landscapes that were built around wealth: single-family houses that are sold, not rented; too few apartment buildings; and government agencies hidden at the far edge of the suburban ring, more responsive to trash-pickup complaints than rising hunger rates.

The Ramada families became homeless because they could no longer pay rents and mortgages and found little help to slow their fall. In 2011, Colorado ranked eighth in foreclosures nationwide. When families in Jefferson County, which encompasses Denver’s western suburbs, lost their home in the recession, they flooded a market that had the lowest number of rental vacancies in ten years. The Section 8 program in the area dispenses vouchers through a random lottery that typically has about 2,500 applicants; in any given year, only 30 to 40 spots become available. The school system, which keeps the best records of homelessness in the county, says the number of homeless students rose from 59 in 2001 to 2,812 in the current school year. Unable to find another home and unable to find space in the county’s shelters, which hold fewer than 100 beds, the new poor disappeared into the suburban landscape wherever they could find a roof. With nowhere else to go, they turned the Ramada Inn into an impromptu SRO.

leigh
1/16/2014 11:25:15 PM

The family probably did get a bad loan, but they could have figured out the worst case for interest rate by dividing the annual payments by the amount borrowed. For the $68K loan, I get 5.3%, which is high for the time that the loan probably was taken out, but it might reflect having the closing costs rolled into the second loan. The first loan might well have been interest only or even one where the payment made didn't even pay the interest (negative amortization), which seems quite possible given the balloon payment on the first loan. Countrywide was acquired by Bank of America in early 2008, before a lot of banks were bailed out in Fall 2008, so they struggled with the refinanced loan for at least a couple of years, and then there was about a year before their house was finally foreclosed. This is a situation that did not develop overnight. It dragged on for years. The hotel is something of a bargain for them. If they had to pay utilities for a two-bedroom house, they could easily spend $300 a month in addition to the rent. Most two-bedroom apartments in the Denver area rent for $850 or more, so they are looking at spending at least $300 more than the hotel. They would also need to pay a higher than average security deposit due to their bad credit.


dhnla
1/16/2014 3:13:35 PM

I agree with the previous commenters. I feel for the families who've lost their homes. To call losing your home "disruptive" would be an understatement. I've been through something similar. But for the family featured in this story, I think the inflexibility of the wife in regards to the L-shaped home in Bear Valley could be an impediment to them moving forward. You have to crawl before you can walk, and a place to call your own, even if its an apartment, would be better in my opinion than living in a hotel where the conditions seem to be getting more and more inhospitable. Also, while resentment directed at the powers that be is justified in this situation, I think one has to be very aware of it so that it doesn't poison other relationships, including those with people in a position to help you.


leigh
1/4/2014 10:02:28 AM

As the author points out, one of the factors holding the family back from finding a new place to live is the wife's desire to have a certain kind of house. If they are paying $800 or so per month for the hotel room, they can afford $600 a month for an apartment. When I read about the land, I was surprised that there wasn't any mention of any sort of house on it. They should be getting income from it by renting grazing rights. Land located only 15 miles north of the border with Mexico is likely to be suited only for grazing.


lisette
1/3/2014 9:00:02 AM

They have 240 acres of land!!???!! how many homesteaders would kill to have that? They don't have decent jobs that they would lose, oh, a pension or something by leaving. They don't have a viable business. But they have land. If they had any sense or gumption at all they would go settle on their land, piece together a dwelling to hold them while they build something permanent - rammed earth or adobe or straw bale would work in that climate - and rebuild a life. Creeping suburbanization has made helpless, dependent "cases" out of what should have been independent, resourceful adults.