Blumenthal, Murphy sponsor bills to help homeowners with crumbling foundations

A crumbling foundation

Washington – Connecticut’s U.S. senators on Wednesday introduced a pair of bills aimed at helping homeowners with crumbling foundations, but conceded it will be an “uphill fight” to win congressional approval of the legislation.

The Aid to Homeowners with Crumbling Foundations Act introduced by Sen. Chris Murphy and co-sponsored by Sen. Richard Blumenthal would provide up to $100 million over five years from the U.S. Department of Housing and Urban Development (HUD) to states like Connecticut that have created programs  to help damage to residential structures built with concrete containing pyrrhotite,  a mineral that expands with moisture and causes foundations to bow and crack.

About  three dozen towns in north-central and northeastern Connecticut have foundations built with concrete containing pyrrhotite from a quarry in Willington.

Last year, the Connecticut General Assembly established a Crumbling Foundations Assistance Fund to allow $100 million in bonding over the next five years to assist victimized homeowners.

The Crumbling Foundations Small Business and Homeowners Assistance Act  would create a new $100 million grant program within the Federal Emergency Management Agency, an agency that has rebuffed Gov. Dannel Malloy’s requests for help for affected homeowners.

If the legislation is approved, qualified homeowners would apply to FEMA directly for a grant.

“Money that would be provided by these bills are desperately needed and deserved,” Blumenthal said. He also said “FEMA is designed to respond to natural disasters.”

FEMA says Connecticut’s crumbling foundations are the result of bad building material, not natural disasters. But the agency would be required to distribute grant money to affected homeowners if the bill becomes law.

Murphy said congressional approval of the legislation “is going to be an uphill battle.” “Many of our colleagues see this as a local problem that the state should respond to,” he said.

Currently, only homes in Connecticut — and to a lesser extent, Massachusetts — have been determined to have foundations built with pyrrhotite.

In their conference Wednesday, both Blumenthal and Murphy also said they would continue to press insurers to pay the claims of homeowners with crumbling foundations. “They must do their part,” Blumenthal said. “They took their premiums and changed policy language after they learned of the problem. That is a shirking of responsibility.”

Murphy said the senators decided to introduce their bills after HUD Secretary Ben Carson said during a Senate hearing last week that he would work with them to help homeowners. “It’s a very valid issue and yes, we would be very happy to work with you on that,” Carson said.

Murphy said “we felt with the commitment of the Trump administration,” it was time to introduce legislation.

Murphy also said the price tag of the bills was set at $100 million apiece “because it’s likely the biggest number we can get our colleagues to agree to.”

Meanwhile, there is another way the federal government has offered to help.

At the behest of Reps. Joe Courtney, D-2^nd District, and John Larson, D-1^st District, the Internal Revenue Service agreed to  allow Connecticut homeowners with crumbling foundations to take a federal tax deduction for the cost of any repair made before 2021.

“The [deduction] is available to a taxpayer who has obtained a written evaluation from a licensed engineer indicating that the foundation was made with defective concrete, and has requested and received a reassessment report that shows the reduced reassessed value of the residential property based on the written evaluation from the engineer,” the IRS said in new guidance released earlier this year.

Homeowners who want to take this deduction must have included it in their 2017 tax filings or, if the work is done in 2018, 2019, or 2020, they must amend their 2017 return to take the deduction.