Ordinarily, we don’t talk about real estate too much at Swing State Project, but all of a sudden, people seem interested in the issue of officeholders not properly disclosing the true market value of your house on your federal disclosure forms.
So it’s worth noting that Joe Knollenberg, currently embroiled in a tough race to retain his House seat in MI-09, may be in a little trouble himself. Roll Call has the details in an article pithily titled “Knollenberg Lowballs D.C. House:”
On the most recent disclosure forms, Knollenberg reported the value of the property at $50,000 to $100,000, down from the $100,000 to $250,000 range he reported the year before, despite the fact that District of Columbia tax records indicate a current assessed value of $781,840.
Anybody who’s looked at Washington real estate lately knows that the idea of a $50,000 townhouse on Capitol Hill (four blocks from the Capitol) is pretty laughable.
It’s a little subtler than that: Congressional reporting rules don’t require you to give the value of a personal residence, or a mortgage against it… unless there is rental income involved. Knollenberg purchased the townhouse in 2001 (for $490,000), but didn’t start renting the basement apartment unit until 2003. At that point:
His disclosure form for that year reported a “lower level rental” valued from $100,000 to $250,000, generating $5,000 to $15,000 in rent. Knollenberg also reported a mortgage on the property of $100,000 to $250,000.
He reported the value of the basement unit alone, despite:
The instruction manual provided by the House Committee on Standards of Official Conduct for filling out financial disclosure forms requires that when a property provides rental income, “the gross value of the entire property should be reported even if only part of the property (e.g. the basement of a residence) is used for rental purposes.”
However, something changed with his 2007 report, and there’s no explanation for it coming from the Knollenberg camp other than ‘clerical error:’
But on his 2007 disclosure form, filed in May, Knollenberg reported the value of the property at between $50,000 and $100,000, claimed income of $5,000-$15,000 on the rental and no longer listed the mortgage on the property at all. By comparison, one local developer said an indoor parking space in a Capitol Hill condo building would sell for about $40,000.
Bear in mind that no one is talking about criminal charges at this point, only violations of House ethics rules. But with the Stevens story bursting onto the scene, this little ‘clerical error’ can’t be helping Knollenberg, already facing a rocky re-election bid.
would cost a lot more than $50,000.
What a joke.
Interesting fact about the value of parking space in a prime D.C. location. Six or seven years ago, when I lived in London, I remember seeing an “apartment” listed for 30,000 British pounds. That would have been about $45,000 at the time (now it would be more like $60,000). The “apartment” was basically an 8-foot by 9-foot closet with no kitchen or bathroom. However, it came with one parking space on the street.
Why would someone go to the effort of underreport the value of a house on Federal Disclosure forms unless doing so for tax purposes.
Really, a cash deal, I’ll offer $150,000 , fully 50% above Knollenberg’s maximum assessed value. Come on Congressman, you can’t turn down a great offer like that, can you?
(This is not going to help him back home where thousands of homeowners are struggling to hang onto their homes…how out of touch is the guy?)
Given the hard times in the auto industry, Joe might not want to appear really well off. Like having an extravagant second home but there it is.
Joe’s house is assessed at $781,740. Considering normal appreciation from his $490 K, he’s got a million dollar property in DC. Housing in the Detroit suburbs never reached the heated values of much of the rest of the country. In fact, Bloomfield Hills, the richest town in the state and fourth richest nationally (per the town) is in Joe’s district. Using the link from Joe’s web site, only 39% of the houses in this town (of 4,000 people)are worth a million bucks. A million dollar house here (and they have them) is a mansion. A gracious flat out mansion.
Of course, the other alternative is that Joe is living in an extravagant home in DC and the house in Michigan is a sham. Also not a great selling point back home. This is auto central. Chrysler is headquartered here. GM is a monster employer (21,000 jobs in Pontiac alone) and most of the top parts manufacturers are here as well.
Who do you think Joe is representing? The lobbyists of DC or the folks struggling back home?