For Immediate Release
Tuesday, February 28, 2017
Revised Press Release
Municipal Officials: Crumbling Foundations Needs to be Addressed Today
Hartford, Connecticut – The Capitol Region Council of Governments (CRCOG)’s Ad-Hoc Working Committee on Crumbling Foundations held a press conference in support of bills to aid homeowners with crumbling foundations.
The Ad-hoc Working Committee has been working hard to create proposals and templates for how aid to homeowners as well as condo and Planned Unit Development owners could be implemented. The Ad-hoc Working Committee supports HB6478 which has been proposed but not raised and currently supports SB 905 with added provisions.
This is a problem that affects 36 towns or more in Connecticut primarily in Eastern Connecticut, but also in the Northeast and Central Connecticut. The Ad-Hoc Working committee estimate from 9 of its towns shows potentially 4774 homes in just those towns being affected. The total cost to remediate all the homes affected could be larger than Hurricane Sandy.
Fortunately, this disaster is a slow-moving one that if we address the immediate needs now and begin mitigating now, we have time over the next 10 to 15 years to address this problem, restore confidence in the real estate market and the economy and make our homeowners whole.
The Ad-Hoc Working Committee is supporting the following:
- Waiving of state building fees.
- Revised Language: Limiting the use of pyrrhotite in aggregate intended for use in foundations. CRCOG proposes that the General Statutes be amended to require a company that sells concrete aggregate to establish and make available for inspection a quality control plan that requires such concrete aggregate to comply with relevant State Building Code requirements and ASTM C-33, Standard Specification for Concrete Aggregates. CRCOG’s understanding is that the previously proposed 0.23% level of testing at the aggregate level is not workable.
- Aid in the form of grants to homeowners, condo owners and planned unit development owners for 75% of the remediation costs up to at least $75,000 per home or condo or planned unit development. We set the bar at $75,000 because we believed this to be legislatively palatable, but if there is the possibility of increasing that maximum grant aid, we would support that.
- Creation of a guaranteed loan fund. A guaranteed loan fund will enable the homeowners to be able to make up the difference between the aid and the remaining amount. We know from the banks that such a guarantee would enable banks to leverage the guarantee to be 5 times the amount of the guarantee and enable them to make the “high risk” loans these could be.
- Require mandatory disclosure of sellers to buyers regarding this issue (much like the lead paint disclosures that exist today). We need to bring back the confidence in the real estate market. This will help and also will help out-of-state buyers from being hoodwinked into the purchase of property that they might not have.
- Funding for the aid program can come from a variety of sources. Some alternatives we propose:
- Initial seed funding of $30-$35 million in bonding;
- Some portion or all of STEAP that is apportioned to affected towns would also be an effective use of STEAP funds;
- $0.50 tax on readymade concrete mix of 25 lb. bags or higher;
- $1 per ton tax of material processed from any gravel or natural element extraction facility.
Regardless of what has happened in the past, the ad-hoc working committee is focused on moving forward. We would recommend a separate bill that addresses the issues with insurance companies. We believe SB-881 may be helpful, but once again, believe action is needed now. We are proposing the following addition to SB-881:
- Increase in time limits for filing claims to insurance companies. At a minimum, the clock should not start ticking for the homeowner to sue their insurance companies until after the final denial letter has been received. Anecdotally we have heard insurance companies waiting until the last moment to send the denial letter in order to minimize the likelihood of lawsuit.
- Support surcharge on residential and commercial policies statewide of not more than $200 to enable and require insurance companies to cover these liabilities up to $150,000. We do not feel additional studies are necessary to move this forward.
The working committee also supports pursuing federal options as well in the form of Housing and Urban Development (HUD), IRS tax credits, and other assistance that may be available at the federal level. Community Development Block Grants (CDBG) and existing HUD program priorities are set by the state and the Department of Housing. This is an area where the state could choose to leverage federal funds, but has yet to fully explore opportunities within CDBG or HUD or prioritize this issue within its Action Plan. The committee, however, does not believe we should stand still and wait for federal assistance. Action is needed now.
For example, a $30 million dollar annual fund divided into $25 million grants for home owners and $5 million in guaranteed loans for banks (that would leverage to $25 million) would help at least 300 hundreds of homes annually if not more. Because this is a slow moving disaster and the capacity for re-construction, it may be all that is needed to slowly build back this region and restore these homes.
This is potential economic devastation for many of the 37 towns impacted that will affect all of Connecticut and this is the time to get ahead of the issue. The Ad-hoc Working Committee on Crumbling Foundations will have proposed language available that we will share with the legislators at the end of this week once it has been reviewed by the full committee. Working in conjunction with municipal, state and federal issues across agencies and statewide, we believe together we can forge a pathway for a solution.
Lisa Pellegrini, First Selectman of Somers and co-chair of CRCOG’s Ad-Hoc Committee on Crumbling Foundations said, “Now is the time to address the issue of crumbling concrete foundations through meaningful legislative action. This problem is not going to go away and if ignored will greatly affect the economic stability of the entire state and continue to financially and emotionally devastate families in 37 towns in Connecticut. Now is the time for all levels of government, insurance companies and the banking industry to work together to provide immediate relief for those homeowners facing this problem.”
Steve Werbner, Town Manager of Tolland and co-chair of the Ad-Hoc Committee said, “We look forward to working with the legislature to create comprehensive legislation that provides immediate relief to those suffering from crumbling foundations. To make this successful all levels of government and the insurance companies have to come together and recognize that the time to act is now. The economic stability of our communities along with the financial and mental health of our residents hangs in the balance.”
Marcia LeClerc, Mayor of East Hartford said, ““This is an important regional issue that will affect the economy of not only the affected towns, but the surrounding towns and the state. We face many challenges this year, but crumbling foundations is an issue that cannot be ignored and we must address to provide assurance and stability to the region and ultimately the state.”
Tony Frasinelli, First Selectman of Stafford said, “Stafford and its’ residents are suffering from the concrete issue along with the other towns in our region. We’re going to feel a greater impact this year and it will get worse with every passing year. I, along with my fellow town leaders have been very active in crafting real solutions to help people out of this nightmare. It’s not only financial (which is potentially huge,) it’s also mental and emotional. I’m hoping the public hearing shows others just how devastating a problem this is…not just for us but for the entire state. The ramifications could top $1billion and could crush small towns all around the region and could last for 20 years or more. We’re asking for help.”
Christina Mailhos, First Selectman of Willington said, “We don’t have time for studies or stalling. We have to act now to save the real estate market and stop our grand lists from crumbling to a point that cannot be rebuilt.”
For more information, please contact Pauline Yoder, firstname.lastname@example.org.
The Capitol Region Council of Governments (CRCOG) is a voluntary Council of Governments formed to initiate and implement regional programs of benefit to the towns and the region. It is guided by the chief elected officials of our 38 Metro Hartford municipalities. The mayors, first selectmen, and town council chairmen who make up our governing Policy Board recognize that the future of our individual members is tied to the future of our region. Our members have collaborated for more than 50 years on a wide range of projects to benefit our towns individually and the region as a whole. CRCOG serves the Capitol Region and all our municipalities by:
- Helping members improve governmental efficiency and save tax dollars through shared services and other direct service initiatives;
- Promoting efficient transportation systems, responsible land use and preservation of land and natural resources and effective economic development;
- Strengthening the Capitol City of Hartford as the core of a strong region, and as our economic, social and cultural center;
- Advocating for the region and its towns with the State and Federal governments;
- Strengthening our regional community by helping coordinate regional agencies and programs; and
- Assisting local governments and citizens in articulating, advocating and implementing the vision, needs and values of their regional community.