Charlotte’s recovery will likely look like its growth for the last several decades: uneven.
Like other mid-size Sunbelt cities, Charlotte will continue to attract young talent from larger, pricier cities like New York and San Francisco. Our residential real estate market shows no signs of slowing. Companies still move here and add high-paying positions. Out-of-town developers still buy up land in hot neighborhoods.
On the other hand, we’ve lost thousands of jobs. The problem is worse among people who get paid by the hour, and among those who work in the hospitality industry. Experts worry that children who already lived in poor households are falling further behind because schools haven’t fully returned for in-person learning. Many people can’t afford to pay rent or their bills.
It’s a familiar dichotomy in Charlotte, a city that ranked dead last among the nation’s 50 largest cities in an oft-cited study of economic mobility a few years ago. Those with money are benefitting from record stock market gains, as well as the ability to save and work from home. Those who are poor are falling even further behind.
Coronavirus is only stretching existing disparities in Charlotte.
“It has actually highlighted the problems that we’ve had and we’ve known about before,” Charlotte Planning Director Taiwo Jaiyeoba said in a recent interview.
A few statistics underscore how the pandemic has crushed the local and state economy:
- One in four children in North Carolina is now considered food insecure.
- There are 10,535 households in Charlotte-Mecklenburg that are at greatest risk of eviction, UNC Charlotte researchers estimate.
- Since mid-March, nearly 1.4 million North Carolinians have filed for state unemployment benefits.
- UNC Charlotte economists project North Carolina will have lost 224,100 jobs by the end of 2020.
Local nonprofit Common Wealth Charlotte provides financial education and non-predatory loans to Charlotte’s low-income workers. These are zero-interest loans of up to $750, and they can be used for a range of needs, from rent to utilities to food.
Since April, CWC has issued 640 such loans to its clients. In a normal year, the group would have issued about 120, says Chuck Jones, CWC’s executive director.
“While there was a lot of disparity existing (in Charlotte), it will be amplified by the fact that there’s more catch up to do,” Jones says. “When you’re paycheck to paycheck and you lose income, you just get deeper and deeper into this disadvantageous position.”
What his agency is seeing parallels a national trend: According to census data, one-third of Americans say they’re struggling to cover usual expenses like food, rent, or car payments.
Threatening to worsen the rent situation for millions nationwide: The federal government’s eviction moratorium expires on December 31. Mecklenburg County recently signed a national petition urging the CDC to extend the moratorium.
And it remains to be seen whether Congress will extend the moratorium in its coronavirus relief package.
Few neighborhoods offer a visual representation of the effects of the pandemic like Uptown. These days, center city is often eerily quiet.
According to the Charlotte Regional Visitors Authority, 12 conventions cancelled this year. On top of that, corporate employees continue to work from home. Concerts, plays, sporting events, and other entertainment are all postponed, or they’ve gone virtual.
In September, Lauren Livesay was laid off from her job as a general manager at Blumenthal Performing Arts. In a normal year, the organization would bring some of the biggest entertainment acts to town, like Hamilton and Blue Man Group.
The reason behind her layoff? “Operational reductions due to Covid-19.”
“The explanation was that it would be a while before large tours would return to BPA’s six theaters and that staff cuts had become necessary,” Livesay said.
She’s looked for new work in the events industry, a field she’s worked in for 18 years. But there aren’t many opportunities these days.
“I’ve tried similar fields in hopes of transferring my skillset, but so far I have a long list of job rejection letters and an even longer list of hiring managers I’ve never heard back from,” Livesay said. She’s currently working a seasonal position at Crate & Barrel, her first retail job. On the bright side, Livesay said she likes the challenge of learning something new.
UNC Charlotte economist Dr. John Connaughton estimates employment in North Carolina in leisure and hospitality will decrease by 17.3 percent this year, the most of any industry. “These are usually not high paying jobs, but for a lot of people they are a good employment opportunity. It’s a volatile but flexible industry.”
Charlotte’s restaurant industry will be a bit smaller than it was before the pandemic, too.
In Uptown especially, the list of restaurants that’ve closed keeps growing. Since last spring, Queen City Q, Amélie’s, JJ’s Red Hots, B.Good, La Belle Helene, and basically everything in the EpiCentre have all closed for good.
“What we’ve seen inside the hospitality arena is those that are more driven by convention and Uptown traffic are going to have a long, harder time recovering,” said Heath Campbell, Truist’s president of the Metrolina region. Truist has facilitated Paycheck Protection Program (PPP) loans for businesses all over Charlotte, including restaurants like Cajun Queen.
“There are families on the other side of those businesses,” Campbell added.
The strain on restaurants extends beyond Uptown.
There’s also Carpe Diem, which closed in Elizabeth after more than 30 years. Upstream closed after two decades at Phillips Place. Ilios Noche in south Charlotte, Bill Spoons BBQ on South Boulevard, Corkbuzz in SouthPark, and The Summit Room in Dilworth are all among the notable closures during the pandemic.
Aside from restaurants, other small local businesses have grappled with lost sales, closures because of positive Covid tests, and adherence to state business restrictions.
Feast Food Tours & Culinary Events stopped normal operations in July. At the time, owner/president Kristi Martin had to lay off her whole staff of seven employees — including herself.
Since closing, she’s been trying to figure out what the next phase looks like for her business. But so many unknowns about this pandemic and its effect on Charlotte’s food industry linger.
“The goal posts keep moving, so it is difficult to determine a timeline or outcome to be able continue our mission,” Martin said.
Looking ahead, the outlook for mom-and-pop shops isn’t great. According to a recent survey by the U.S. Chamber, 50 percent of small businesses see their operations “continuing for a year or less before having to permanently shut down.”
Many Black-owned businesses in Charlotte have been “treading water” during the pandemic.
That’s according to Dr. Shanté Williams, chairwoman of the Charlotte Mecklenburg Black Chamber of Commerce. Williams estimates about 70 percent of the Chamber’s member organizations have 10 employees or fewer. Most are either in professional services (such as attorneys and financial planners) and food services. The majority have annual revenues of $500,000 or less.
Several she’s worked with were already undercapitalized before Covid. Business owners are doing what they can to keep employees, she added, even if it means not paying themselves. They’ve banded together and turned to local financial institutions for help.
“Unfortunately that’s one of the strengths of a lot of Black businesses. They’re really used to having to operate in survival mode,” Williams said.
National data suggest that coronavirus has hit Black-owned businesses especially hard. According to to Federal Reserve data, Black-owned businesses are twice as likely as other businesses to close during the pandemic.
Williams praised the city for its efforts in reaching out specifically to minority-owned businesses with grant opportunities during the pandemic.
“If there’s something we take out of this … it’s intentionality about getting money to businesses does work. They put that money to work,” Williams said.
Despite how bleak things seem now, Charlotte’s still poised to grow. In terms of its population boom and job creation, Charlotte is often compared to places like Denver, Austin, and Nashville.
Over the summer, Centene, a Fortune 50 health care giant, announced plans to establish a campus in University City. It will add 3,200 jobs there in exchange for nearly $500 million in incentives. In August, Retirement Clearinghouse announced plans to expand its corporate offices in Charlotte, where it’ll create 300 jobs at a new office in Steele Creek. Last week, the British electric vehicle maker Arrival announced plans to open a North American headquarters in South End, where it’ll add 150 new jobs.
People are lured by Charlotte’s weather, cost of living, and jobs. Remote work makes it possible to live anywhere these days, too.
A recent Bloomberg story named Charlotte as “among cities with the most inbound moves” from May-September. A Wall Street Journal story about Austin called out Charlotte as a beneficiary of transplants during the pandemic.
“While some are fleeing for the comforts of the suburbs, moving trucks are also rolling into cities such as Austin, Sacramento, Calif., Charlotte, N.C., Phoenix, and Salt Lake City,” the Journal reported.
The demand for housing has intensified competition in the local real estate market. According to recent data, homes were on the market for an average of 24 days in November, down from 42 days in November 2019.
This growth has out-of-town developers salivating.
Kairoi, based in San Antonio, is one of the many builders to announce a foray into Charlotte during the pandemic. Last month, the developer purchased the 17-acre South Tryon property that’s home to the Stax fitness complex for $12.65 million. There, they plan to build a sprawling apartment community, then set aside a portion of the property for townhomes.
Daniel Zunker, the company’s president of development, cited Charlotte’s job growth, particularly in science, technology, engineering, and math (STEM) as something attracted his team to the city. In a recent survey, Charlotte ranked No. 1 nationwide in STEM job growth, in front of Austin, Denver, Seattle, and Raleigh.
(An example of this kind of growth: Atrium Health CEO Gene Woods recently said the system plans to add 20,000 jobs over the next two decades to its innovation campus it’ll build for its new Charlotte medical school.)
“We absolutely love Charlotte. It’s a place we’ve wanted to break in for a long time,” Zunker said. “I suspect you’ll continue to see us do a lot more in Charlotte.”
Economists and financial experts describe an uneven recovery like Charlotte’s as a “K” shape.
Some industries like financial services will come out of this pandemic relatively unscathed, poised for further growth. Others, like the hospitality and restaurant industries, have declined, facing a longer, steeper recovery.
Local financial advisor Jud Gee says he’s seen both ends of the spectrum.
“A lot of people are saving a lot. They’re also paying down their debt a lot,” Gee said.
“Conversely … other folks are in the restaurant business, the employees of those companies are not able to do that same thing. The divide has gotten so much wider during this pandemic.”
But it’s not as bad as it could be. During the last downturn, Charlotte was heavily exposed in the banking sector, Gee notes. Now that our economy is more diverse — with jobs in fintech, marketing, sports, media, healthcare — it’s poised to come back, maybe stronger than before.
During a recent economic outlook panel discussion, Charlotte executives said the local corporate community has a responsibility to help uplift communities that the pandemic disproportionately hurt.
“What’s uniform across the board is that the lower quintile of our society has suffered a lot more because of this … in what was already a massive divide. If anything it’s going to get worse and worse,” Red Ventures CEO Ric Elias said.
Elias has long emphasized corporate responsibility as a way to help solve inequality. He established the Road to Hire program in 2013 as a way to train local high-school graduates for high-paying tech jobs.
Historically, Charlotte has a long tradition of corporate maneuvering to get things done.
Addressing economic inequality, the CEOs agreed, is good for the whole city’s reputation.
“It is, for lack of a better term, a great branding opportunity,” said Brian Moynihan, Bank of America’s CEO for the last decade.
“It’s a great continual branding of (Charlotte) if it can continue to show that it can come together and solve these problems.”
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