Connecticut’s Crumbling Foundations Captive Reaches the 600-Family Milestone
WASHINGTON, DC – Today, Congressman Joe Courtney (CT-02) joined Michael Maglaras, Superintendent of the Connecticut Foundations Solutions Indemnity Company, Inc. (CFSIC), and Governor Ned Lamont in announcing a major milestone in the effort to support homeowners impacted by the crumbling foundations crisis. As of today, CFSIC has officially placed 600 local families back into homes with safe and secure foundations since its launch on January 10, 2019. The 600th home milestone was reached as foundation remediation was completed at the home of Anna Hyde in Ellington, CT.
“With claimant Anna Hyde of Ellington, who originally applied to the program on August 29, 2019, and who was very patient with this process, we have our 600th completed foundation,” said Maglaras. “This is an important day in the history of CFSIC, and for Anna, and an important day for all the victims of the crumbling foundations natural disaster.”
“The Superintendent himself phoned me personally this morning to offer congratulations,” said homeowner Anna Hyde. “I have to say that the Superintendent and his whole team, particularly my wonderful claim adjuster Nicole Carrozza, made this process seamless and a happy one for me. I am so grateful to the State of Connecticut and to CFSIC."
“We’ve had great cooperation from Governor Lamont and his staff,” added Steve Werbner, CFSIC President. “They believe in what we’re doing, and they realize the deep economic and human impact of CFSIC’s success.”
“When the crumbling foundations crisis burst in 2016, the milestone of repairing 600 homes seemed beyond reach,” said Rep. Courtney. “The General Assembly, Governor Lamont, and CFSIC deserve great credit for taking bold action to provide direct funding to homeowners and communities. Working closely with Mike Maglaras and CFSIC, my office ensured the IRS ruled that CFSIC grants for repairs were not taxable, and secured funding for foundations testing from the National Institute of Standards and Technology, as well as the U.S. Department of Housing and Development. There are still many homes at risk from pyrrhotite damage, and it is critical that local, state, and federal partners redouble our efforts to accomplish the mission of CFSIC, namely to stabilize the home and real estate markets in Connecticut that have been ravaged by this insidious defective concrete.”
“The crumbling foundation issue has not only posed a safety concern, but it also has had the potential to be economically damaging to the northeastern region as a whole, regardless of whether your own personal home is among those that have been impacted,” said Governor Lamont. “I am glad that the state has been able to partner with 600 homeowners to address this issue and help bring some security to their homes and their lives – it was the right thing to do. I appreciate Mike Maglaras and his team for what they have done at CFSIC.”
To date, CFSIC has paid out nearly $100 million in foundation remediations, as well as reimbursements for work already performed. Today’s completion of repairs marks 600 foundations replaced, and CFSIC estimates that it will reach its 1000th home in the next 18 months. CFSIC has heard from more than 2,200 claimants since its launch on January 10, 2019. To learn more about CFSIC, click here.
Rep. Courtney has worked to help Connecticut residents impacted by crumbling foundations ever since the crisis emerged. He has worked to secure a variety of resources at the federal and state level to research and address the problem, and to assist residents with testing and repairs, including:
- Support for Local Crumbling Foundations Testing Assistance — In 2016, due to the advocacy of Rep. Courtney’s office, the U.S. Department of Housing and Urban Development (HUD) made clear that the State of Connecticut could use its allocation of Community Development Block Grant (CDBG) funding for various efforts to assist people with crumbling foundations, including testing. In Congress, Courtney has voted consistently to provide strong support to the federal CDBG program. That support, combined with HUD’s 2016 guidance, led to the creation of the federally funded pyrrhotite testing program currently operating in Vernon, Ellington, and Stafford. The program covers the cost of testing residential foundations for the presence of the mineral pyrrhotite. Courtney announced a $480,000 grant award to fuel the program in 2019, the state has provided close to $1 million in federally allocated CDBG funds, and the program is still supporting people today—recently, it was extended through February 28, 2023.
- Securing Non-Profit Status for CFSIC — In March of 2019, Courtney worked to help CFSIC achieve designation as a non-profit 501(c)(3) organization from the Internal Revenue Service (IRS). With that tax-exempt status, CFSIC has been able to leverage public and private resources to help eastern Connecticut homeowners impacted by the crumbling foundations crisis, and in turn to help stabilize the local housing and real estate market. Additionally, due to CFSIC’s 501(c)(3) status, CFSIC has been the beneficiary of thousands of dollars in philanthropic donations to support crumbling foundations remediation.
- Securing Additional Tax Relief for Impacted Homeowners — In April of 2019, Reps. Courtney and John Larson (CT-01) secured clarification from the IRS that enabled homeowners impacted by the crumbling foundations crisis to receive additional tax relief and allowed them to claim the federal casualty loss deduction for costs not covered by CFSIC. In a letter, the IRS confirmed that if the repaired structures was damaged by the crumbling foundation or needed to be damaged or destroyed to repair the foundation, the cost of the repair of this item would be eligible for federal tax relief under the Revenue Procedures that the IRS had published in 2017 and 2018. The IRS clarification came following a letter Rep. Courtney wrote to IRS Commissioner Charles Rettig on February 28, 2019 requesting this clarification.
- Protecting Assistance to Homeowners from Federal Taxation — Additionally, Courtney worked to ensure that beneficiaries of CFSIC assistance would not have to pay federal income taxes on the funds received from CFSIC for crumbling foundations remediation. In 2020, after receiving a formal inquiry from Congressman Courtney, the IRS issued new guidance clarifying that financial assistance paid to eastern Connecticut homeowners through CFSIC—including payments from CFSIC to contractors on behalf of homeowners, and reimbursements paid to homeowners—would not be treated as taxable income in the year the payment reimbursed or paid. This clarification saved individual homeowners tens of thousands of dollars and provided peace of mind for claimants waiting to receive the assistance.
- Supporting Research Efforts that Provide Real Benefits — In Congress, Courtney has worked on complementary efforts to ensure that federal funds would be supporting the work of CFSIC and all crumbling foundations remediation activities in Connecticut. Specifically, since 2020, the National Institute of Standards and Technology (NIST) has received $5.5 million to support crumbling foundations research, of which UConn has received $1.76 million as a grantee to support this week. Today, federally funded work at UConn is helping researchers capture information on the premature degradation of concrete foundations that contain pyrrhotite, and to build a risk assessment scale so that we know how much pyrrhotite actually must be present before a property is deemed unmarketable. The research has also expanded free concrete testing opportunities for Connecticut residents. For example, condominium owners at the Willington Ridge Condos were able to have testing paid for with 100% federal funding thanks to this research, which otherwise would have cost them tens of thousands of dollars out-of-pocket. In 2021, the Willington Ridge Condos became the first condominiums in Connecticut to be raised for crumbling foundations repairs.
- Targeted Financial Assistance for Impacted Homeowners — Most recently, Courtney secured $2 million in targeted funding in the 2022 federal budget that will provide impacted homeowners with direct financial assistance. The 2022 budget included ten different “Community Project Requests” submitted by Rep. Courtney for efforts throughout eastern Connecticut, including for crumbling foundations assistance. Rep. Courtney worked directly with towns in north central Connecticut to craft the project request, and now that the budget has been signed into law, it will become available specifically to assist homeowners with crumbling foundations remediation and repair. Rep. Courtney’s office will be providing more information on how to apply for this direct assistance soon.
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