The Williamsburg Redevelopment and Housing Authority may lose over $39,800 due to the purchase and renovation of a house on 110 Harrison Ave.
The WRHA purchases and renovates houses around Williamsburg. Sharon Scruggs, chairman of the WRHA, said that one of the goals of the WRHA is to provide affordable homes to the working class.
In April 2006, the WRHA used city loans, in addition to previously allocated city funds, to purchase the house from David Kranbuehl, the elected president of the Homeowners Association of West Williamsburg Heights and a chemistry professor at the College.
Originally a duplex, the house has been renovated into a single-family home. According to City Manager Jack Tuttle, a total of $418,005 was spent for the purchase and renovation of the house. The original asking price for the house was $425,000, but that has since been dropped to $389,900. If sold at this price, the WRHA would be losing $28,105.
In addition to the $28,105 lost with the purchase of the house, the WRHA will pay a 3 percent commission to the realtor representing the buyer. This would bring the total loss to $39,800.
Home values have fallen over the last year in the Hampton Roads area. Williamsburg was hit especially hard, with the median price of a home falling 16 percent, according to data from the Real Estate Information Network cited in the Daily Press. James City County residents saw an 8 percent drop, while home prices in Hampton and Newport News were flat and slightly positive, respectively.
An owner occupancy restriction has been placed on the house, meaning that potential buyers must purchase the home with the intention of living in the building. The restriction prohibits any potential renters from inhabiting the house.
Prior to its purchase by the WRHA, the house was rented out to lower-income workers in the area. They had been paying a rent of approximately $900 per month.
According to Vice Mayor Clyde Haulman, such restrictions on property serve the purpose of regulating the renter-buyer ratio.
“WRHA bought the house because they determined it had potential for renovation. It was changed to a single family home because of the fragile nature of that neighborhood. The argument was ‘let’s keep the balance,’” Haulman said.
Kranbuehl agreed. “I, and the vast majority of the neighborhood, live in Williamsburg because we want to live with students, retirees and families. We live there because we like the mix of students,” Kranbuehl said.
According to Haulman, efforts by the city to regulate this balance, include the building of several apartments near the Delis.
The restrictions on rental properties, such as the owner occupancy restriction placed on the Harrison Ave house, have raised concern amongst the student body.
“The city has acknowledged that there is a problem with housing availability for students. They don’t want rental properties across the street from William and Mary,” Student Assembly President Zach Pilchen ’09 said.
“This policy is not only unfair to College students, but suggests that renters like new families, or people who don’t yet have enough capital to buy a house, are not viewed as equal members of the Williamsburg community,” Student Assembly Vice President Valerie Hopkins ’09 said.
According to John Mattson, Williamsburg city assessor, the Harrison house’s worth was assessed at $147,700 at the time it was purchased by WRHA.
This means the WRHA originally purchased the house for $129,305 more than it was worth. Kranbuehl said he purchased the house from the previous owners for the $277,005.
Today, the house’s worth is assessed at $286,900. This means that the asking price for the home is $103,000 more than the house is worth.
“They’ll even go to the lengths of losing money so that the house can’t be rented by students or anyone surrounding the College,” Pilchen said.