Vanishing middle-class?

Charlottesville resident Collette Hall spoke truth to power (and spoke for many concerned citizens) at Monday night’s public hearing on the proposed fiscal 2007 budget, which the Hook's Lisa Provence recently reported on.

“Soon there will no longer be a middle class in Charlottesville," Hall said, according to a story in the Daily Progress. "I bought my house seven years ago and it was assessed at $87,500. It is now assessed at just under $400,000. The bottom line in any budget is what do we need versus what do we want?"

Apparently, City Council was listening. "I think a lot of the speakers were right," said Mayor David Brown. "We do have to earnestly try to work to lower the tax rate.”

8 comments

But do you think Mayor Brown will really lower the tax rate? And if he does, doesn't that just reward the people fortunate to *already own* property? Those of us renting are still stuck in that rut. What we need are high-paying jobs!

Hall Said (from the DP story):

ââ?¬Å?I bought my house seven years ago and it was assessed at $87,500. It is now assessed at just under $400,000.

Okay. While her house may have been assessed that in 1999, unless she lived in a neighborhood near one of Cvilles public housing projects and in really awful condition, she probably purchased the house for quite a bit more than that. In which case it's tax valuation was signifigantly "below market" and for seven years she benefited from the tax assessors mistake and recieved a discount she might not have been entitled to. Now the valuation has been corrected.

As for the issue regarding the middle class being squeezed by Charlottesville. From as far back as the late 80's that's always been the case, as decent paying jobs began to leave C'ville to be replaced by service industry positions at businesses which catered to out of state transplants who moved here from somewhere else with already established personal wealth.

The approach I would suggest for the budget issue would be to, using last years budget figures, "fully fund" all the services the city cannot do without (Public safety for example). And then have them (the council) be required to justify the expenditures for everything else, and start the cutting.

Your willingness to make an assumption about the value of the ladies home and what she paid for it and then reach the conclusion that she "received a discount she might not have been entitled to." is astonishing. You don't know how much her assessments went up during the past seven annual assessments and you don't know what she paid for it. It is entirely possible that she purchased the house for a price close to the assessed value and that it was not a wreck located next to the projects. Real Estate tax records are public and online. Why don't you go Go ahead and try to prove that she got a "discount she might not have been entitled to" before you make anonymous accusations.

I do suspect that the assessment was probably low and that it may still be lower than the house would sell for. Assessors do try to keep the assessments a little lower than fair market value so that they can defend them if challenged before the equalization board or the courts.

It is definitely true that many homeowners have seen huge increase in our real estate tax bill and that if something isn't done many of the middle class will sell their homes, take the money and run to a more affordable jurisdiction. I think that most of the councilors except Schilling are quite content with this. If they only reduce the rate by a pittance, as Gary O'Connell has proposed they will prove me right.

Kevin Cox wrote:

Your willingness to make an assumption about the value of the ladies home and what she paid for it and then reach the conclusion that she ââ?¬Å?received a discount she might not have been entitled to.” is astonishing.

If that's something that astonishes you.. it must be some nice 'bubble' you live in.
I am opinionated and I offer those opinions freely. I've never claimed that they were always correct, but they're mine so obviously I am somewhat partial to them. Either way I see absolutely nothing wrong with speculation or opinion.

As to the rest of your post... as I said before the middle class has been taking a hit in charlottesville non-stop since the late 1980's. No it's not good and no I'm not happy about it either. But I really have to wonder- just for the sake of wondering.. lets say the middle class do take their profits, sell the homes and move somewhere more affordable and friendly to the middle class. What has Charlottesville really lost? (It's not like the middle class has been much valued by the city before this point. And before this came up I was actually starting to wonder if there really were any middle class still left in the city?)

Alright I'm done.

TrvlnMn would you have written your first post in this thread and signed your name to it? You have no facts about the home and homeowner that you made so many assumptions about and there's a good chance that you are wrong. I think you know that, I HOPE you know that, and I think you remain anonymous to protect yourself.

When I read your post I get the impression that you're saying that because I am not familiar with your opinionated posts I must be living in a bubble. Is that really what you meant?

If you were wondering if there really were a middle class in Charlottesville then it's you who's living in a bubble. There are plenty of middle income people here who are not employed by the service sector. A large number of clerical, technical and professional employees of UVa live in the city. Many don't want to leave but when the taxes go up so much that it pushes their mortgage payments through the roof it may not really leave them much choice.

I believe I made it clear in my last post that I'm NOT the final arbiter of truth with regards to the speculations I made (nor do I think I am, and nor have I suggested otherwise in any of my prior posts). Yes, I could be wrong of course I know that. As I said before... "It's my opinion based on my experience."

No I don't know what she paid for her house or how much her assessments went up each year, but I can guestimate based on what I know about the market then and now. Which is what I was doing, and I don't think that any house worth 400k now was sold for close to 87.5k in 1999 (even allowing for the margin of error you mentioned- that "the assessors do try to keep the assessments a little lower than fair market value so that they can defend them if challenged before the equalization board or the courts.")

$ 87,5oo to 400k in seven years is a very nice appreciation! Nice enough so that if a house were worth that.. it could be sold to retire the mortgage debt and leave enough left over to buy a home with a lower tax assessed value and a smaller mortgage amount.

The continued squeeze the 'unappreciated' middle class in this city constantly face is unfortunate. However the simple fact of the matter is people do not have a 'right' to live wherever they 'want' to live. They have a 'right' to live where they can 'afford' to live.

Consider this my last post on this topic.

It is quite likely that her house has appreciated in value from about 90k to about 400K in seven years. The skys the limit in some neighborhoods in Charlottesville. I have seen my house appreciate almost as much as she says hers has. I do live near some rental duplexes and Region Ten group homes and the house needed work but it was not a wreck. I bought my house 9 years ago for 97K and it could very easily sell for 400K now. That's less than hers but it's close enough. I don't remember what the assessment was when we bought it but it is now low.

I think it is irresponsible and kind of nasty actually, for you to claim that she received a discount that she wasn't entitled to. I also think that you never would have made that accusation if you couldn't hide your identity.

As far as where people have a right to live it's true that they have a right to live where they can afford to buy or rent. It's also true that it's wrong for the government to deliberately use land use control to interfere with the market in order to make land and housing more costly. They do though, and they get away with it but it's still wrong. I think that part of the higher housing costs in the city are due to actions taken by both the city and the county governments. A lot of it though, is due to national trends.

Whatever the reason for higher costs, the fact is that many people will not or cannot put up with paying higher and higher housing costs and they will leave. Some already have and more are getting ready to go.

I said that was my last post.. I guess I was wrong. This one is.

Kevin Cox wrote: It is quite likely that her house has appreciated in value from about 90k to about 400K in seven years.

Nothing that is worth 400k now sold for less than 150k in 1999.