Why would the Williamsburg city government help purchase a house for $129,300 over its assessed value? That is what some are asking about the Williamsburg Redevelopment and Housing Authority’s purchase of the house at 110 Harrison Ave., which will lose the city over $39,800 if it sells at the price the house is on sale for.
According to city Real Estate Assessor John Mattson, the city assessed the total house and property at $147,700 in July 2006. The house was purchased by the WRHA for $277,000.
Williamsburg Vice Mayor and economics department chairman Clyde Haulman said that there is a difference between the assessed value – done for tax purposes – and an appraised market value.
“An assessment is not an appraisal,” Haulman said in an e-mail, adding that a market appraisal put the value of his own house at 50 percent above the city assessment.
The WHRA bought the house from David Kranbuehl, a chemistry professor at the College and the elected president of the Home Owners’ Association of West Williamsburg Heights. He purchased the house from previous owners for $277,000 and then sold it to the WRHA for the same price.
The WRHA has spent an additional $141,000 on renovations to the home, altering it from a duplex to a single-family home.
The house has been for sale for over a year, and nationwide housing complications have contributed to the prolonged sale of the home. It is now on the market for $389,900 under right of first refusal and owner occupancy restrictions, which does not allow rentals, and is assessed at a price of $286,900.
In a recent Virginia Gazette article, Barbara Baganakis, a Williamsburg real estate broker, said that houses in Williamsburg stayed on the market for an average of 89 days in 2007. She said that difficulties in the sale of the house raised questions regarding why it was initially purchased for more than it was worth.
Kranbuehl said he was unaware of the house’s assessment price when he purchased the house.
“I was unaware whether an appraisal had even been done on the home,” he said.
Kranbuehl said he bought the house so that specific renters in the area who he would not name could not purchase the house.
“My main concern was purchasing the house before these renters got a hold of the house,” Kranbuehl said. “I didn’t want to take that risk.”
At a May 5, 2003 City Council meeting, Krahnbuel called the prevalence of renters in his community a “cancer” and suggested that the city appropriate funds for neighborhood improvements.
Kranbuehl said he originally bought the home with plans to either rent it out or to have it fixed up and sold to young families. He eventually contacted the WRHA regarding the details of purchasing the home.
“I was happy not to have to do [the renovations] myself,” Kranbuehl said. “They were going to do what I wanted to do; it just took one less thing off my hands.”
Mayor Jeanne Zeidler and Haulman actively encouraged the City Council to loan money to the WRHA to alter the home from a duplex to a single-family home at a March 2006 city council meeting. Zeidler described funding the renovations as a “terrific opportunity for the city and the Housing Authority to help preserve the neighborhood.”
“We do owe a debt of gratitude to David Kranbuehl, who has taken action,” Haulman said at the March 2006 City Council meeting. “Kranbuehl used his own money to survey the property and have an inspection of the property done.”
According to Haulman, the house was reportedly too dilapidated to pass a Section IX housing inspection at the time of Kranbuehl’s purchase.
“The city saw an opportunity in a fragile neighborhood,” Haulman said about the house at the recent on-campus City Council debate.
“The neighborhood is much better off with that house now. The quality of the street has improved. If anyone else had bought it, they would have lost money too,” Kranbuehl said.