CT Bond Commission approves another $25 million to fix homes with crumbling foundations

Aug. 8—HARTFORD — The state Bond Commission approved the most recent allocation of $25 million to fix crumbling foundations on Thursday, but the head of the captive insurance company replacing foundations says roughly $160 million more than what is already coming is needed to fix all affected homes in Connecticut.

The General Assembly had already approved another $25 million in state bonding, as well as a $12 surcharge on certain homeowner insurance policies that collects roughly $11 million per year through fiscal year 2030. But more state funding is needed, Crumbling Foundations Solutions Indemnity Co. Superintendent Michael Maglaras said this week.

As of Tuesday, CFSIC has replaced 961 foundations that were deteriorating due to the presence of the iron-sulfide mineral pyrrhotite, but more than 1,000 families would be left behind without more funding, Maglaras said.

To that end, he is seeking another $100 million in bonding, as well as extending the $12 surcharge through fiscal year 2035.

If the funding were approved, "we wipe the crisis out. It's all over. It's done with," Maglaras said. "We've assembled the data that will prove our point. That point is that I can see the end of the crumbling foundations crisis right now. I can see the light at the end of the tunnel. It's coming."

CFSIC is expected to reach another milestone before the end of September — putting 1,000 families back in safe and valuable homes — Maglaras said.

""We are keeping people in their homes who would otherwise have to sell at a significant loss," he said, adding that many newer claimants are older residents, including many in their 90s. "Increasingly, we are helping the elderly, the folks for whom this is the last investment they will make."

Aside from the personal benefit to homeowners with crumbling foundations, municipalities are also benefiting as homes are returned to their full assessed tax value once a foundation is replaced.

"What we think we're doing, and we have pretty good data that supports that, is we're helping rebuild the economies in towns in the areas of question," Maglaras said.

Additionally, since CFSIC launched in January of 2019, 224 full-time and part-time jobs have been created in the construction industry in northeastern Connecticut, he said.

"Despite our inability to get the commercial insurance market to accept these claims, in our own small way we are adding to the economy, keeping people in their homes, and restoring the tax base," Maglaras said.

While the cost of replacing foundations may have plateaued somewhat due to increased labor and supply costs, the price tag for replacing a foundation has dropped significantly due to competition among contractors.

The cost of replacing a foundation at a standalone home is capped at $190,000, but the average cost as of Tuesday was just shy of $164,000, Maglaras said. "There is significant competition for the work that is done."

He credits homeowners for doing their homework and seeking the best price from contractors approved by the Capitol Region Council of Governments, or CRCOG.

Tuesday's approval of the most recent round of $25 million is being praised by state lawmakers representing the affected region of the state.

"For nearly a decade now, the disaster of crumbling home foundations has had a heavy impact on so many homeowners across northern and north-central Connecticut," Sen. M. Saud Anwar, D-South Windsor, said. "I'm glad the state is continuing to provide this vital funding to support our residents who are continually impacted."

Sen. MD Rahman, D-Manchester, noted the "catastrophic impacts" on what is typcially someone's most valuable investment — their homes — adding that "it is critical that we continue to help these homeowners."

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