How CT homeowners facing costly home repairs led a grassroots effort against crumbling foundations [Journal Inquirer, Manchester, Conn.]

Oct. 6—Heim said that he had never organized such a meeting. "I never stood behind a podium in my life," he said. "I just wanted to talk about the intense emotional feeling I had felt after being told I needed $200,000 to fix my house." Being in a room with others feeling the same emotions "made me realize I'm not alone. That was priceless at the time because you feel so powerless when you're told your house is worthless. ... It was kind of like an AA meeting for crumbling foundations."

Making matters worse, insurance companies weren't required to cover the cost of repairing foundations, an issue that went to the Connecticut Supreme Court, which ruled that they didn't have to pay as foundations were not in imminent danger of collapsing. Several attempts by lawmakers to change insurance policy language to include foundations have failed.

Entire neighborhoods and condominium complexes were affected by the calamity, as they all used concrete from the same company — the now-defunct Stafford-based J.J. Mottes Co. Some homeowners had more than one property affected, their primary residence and rental properties, while others paid out of pocket to fix their foundations years before any state funding was in sight.

Out of the 2016 meeting the Connecticut Coalition Against Crumbling Basements was born. It would become the grassroots organization that relentlessly pressured lawmakers into approving money to help homeowners with a return to their residence, safety, security, and sanity.

Some seven years later, the efforts of Heim — the man who was not accustomed to public speaking and knew little about how he and others might get out of a seemingly impossible financial hole — and others has resulted more than $300 million worth of funding and more than 800 families seeing their homes become structurally sound again.

In addition to the aid delivered to those initially at their wits' end, the technology used to restore those crumbling foundations as improved over time as well. What once could cost a homeowner more than $200,000 could today be done for a little more than half that figure.

And it all started when shocked homeowners like Heim banded together.

In the months following that 2016 meeting, the coalition would hold countless meetings and rallies at local high school auditoriums, the state Capitol, and the governor's mansion to let lawmakers know that they weren't going away and demanded action.

Initially, affected homeowners were hesitant to come forward, knowing the value of their properties would drop precipitously. Some were inspired by residents of a Canadian town that had crumbling foundations due to the same iron-sulfide mineral — pyrrhotite. There, thousands of homeowners walked the streets demanding help, leading to $60 million in government aid.

"I look back at this part of my life, and for five years day and night fighting, and losing sleep, and listening to hundreds and hundreds of peoples' stories," Heim said. "I'm proud of what we accomplished. However, it's a part of my life I'd like to forget. It was extremely stressful, what I went through and my family went through, and what other people went through."

Another relentless victim-turned-advocate Debra MacCoy of Vernon not only helped lead the efforts to find a solution, but also turned the crisis into a coalition of her own, developing lasting friendships with other women with crumbling foundations. State Rep. Jeff Currey, D-East Hartford, a staunch advocate for crumbling foundation legislation, called MacCoy "the fearless leader of the Concrete Queens," the self-given name the group. Other Concrete Queens include former Connecticut resident Linda Tofolowsky and Mary Anne Williams of Tolland. MacCoy "held our feet to fire more so than anyone I can recall," Currey said.

MacCoy said that she "sacrificed so much time away from my family" for years, but also gained friends such as the Concrete Queens, who continue to meet regularly throughout the year, including during the holidays.

The "biggest honor," she said, was being appointed to a working group that ultimately led to standards standards for concrete aggregate. Another reward, MacCoy said, is driving down the road and seeing houses and condominiums lifted in the air and "knowing I played a key role in seeing homeowners' lives restored."

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"Seeing my son's condo being repaired and my daughter's house repaired and knowing that they will never have to worry about their homes collapsing is the greatest feeling a other can feel," she said. "I can sleep at night knowing I have paved a path forward for those just entering the remediation scheme."

A rare nonpartisan issue

State Rep. Tom Delnicki, R-South Windsor, said victims came from a variety of backgrounds and political affiliations, and worked as a team toward a common goal. "They were jazzed up, they were focused, and they wanted to get something done," he said. The victims put aside their personal and political differences and worked collaboratively, albeit with some personality clashes from time to time.

"I still can't believe what we accomplished as a team," Heim said. The team eventually included legislators from both sides of the aisle collaborating to develop a solution. "By the grace of God, this wasn't a partisan issue," he said. "I think (Washington) D.C. can learn a lot from Connecticut."

Currey said legislators were motivated to fix the issue as it impacted about a quarter of the state's municipalities, making the disaster to individual municipalities and the state as a whole clear to lawmakers.

After then-Gov. Dannel P. Malloy signed a bill into law in 2016, affected homeowners were able to have their property taxes reduced. While it eased some of the financial burden to property owners, it also placed a strain on municipal budgets as they lost millions of dollars a year in revenue. To determine how widespread the problem was, the state's initial investment was $5 million in bonding for testing. While it was once thought that it would be a $1 billion problem, it turned out to be closer to $500 million to get all affected homes in the state fixed.

In 2018, the General Assembly approved a $12 surcharge on certain homeowner insurance policies, which has provided more than $100 million over a decade. The same year, the state Bond Commission began approving the first installments of what would be $100 million over five years. An additional $100 million over the next four years began in 2022 under Gov. Ned Lamont.

The funding from the surcharge and bonding totaling roughly $300 million is allocated to the Crumbling Foundations Solutions Indemnity Co., or CFSIC, which was created to oversee foundation replacements. "To the legislature's credit, they had never done anything to this magnitude this quickly with this amount of money that was actually going to directly affect people," Currey said.

"Rarely in government do you get something solved that quickly," Delnicki said. "This is a great achievement."

800 families 'are safe'

When lawmakers were brainstorming how to allocate state funding, Currey joined insurance experts to develop the CFSIC model. "Essentially, I watched them create an insurance company," he said.

Last week, CFSIC officials announced that more than 800 families are safely back in their structurally sound homes since the captive insurance company launched in January 2019. "With a claimant in Tolland, who originally applied to the program more than two years ago, we have our 802nd completed foundation," CFSIC Superintendent Michael Maglaras said. "We are making steady progress now in eradicating the scourge of pyrrhotite infection, which has caused so much distress for families in Connecticut."

Currey said that he was "overjoyed" to hear of CFSIC's latest success. "I congratulate Mike Maglaras and his great team at CFSIC for keeping this program on such a steady course," he said. "Home equity is being restored, construction jobs have been created as part of the foundation replacement process, and families have been able to start their lives all over again."

As of this week, the captive insurance company has paid out nearly $127 million in foundation replacements and reimbursements for previous work. Officials expect to fix 1,000 homes in the next 18 months. There are more than 2,200 claimants on CFSIC's books as the captive insurance company awaits its next $25 million traunch from the Bond Commission.

U.S. Rep. Joseph D. Courtney, D-2nd District, who has led efforts to assist homeowners on the federal level, said the latest update from CFSIC is a "remarkable milestone" and highlights the "life-changing role" the captive insurance company plays in the lives of Connecticut homeowners. Courtney, who led efforts to provide tax relief and grants for homeowners, said he would continue to work for the victims of the crumbling foundation crisis until it is resolved. "There are still many homes at risk from pyrrhotite damage, and it is critical that we redouble our efforts to stabilize the home and real estate markets in Connecticut that have been ravaged by this insidious defective concrete," he said.

Steve Werbner, who first became an advocate for victims when he served as Tolland's town manager and now serves as the president of CFSIC, said that Maglaras and his team "have pulled off something of a miracle," calling the captive insurance company "the ultimate private sector/government partnership." CFSIC, he said, is "state funding coupled with insurance company management know-how at its best."

Before CFSIC, the cost to replace foundations could be well in excess of $200,000, depending on the size of the home. With contractors now competing with each other to fix homes, the average cost of CFSIC's foundation replacements has dropped from about $172,000 to about $154,000 as of this week, Maglaras said. "We are stretching the dollars we are getting from state government, and we're proud of that," he said.

Not only have costs decreased, but the crisis has also created construction jobs, and advancements have been made in how foundations are replaced.

Homeowners now have the option of moving out while their homes are lifted and the concrete foundation replaced, or stay in their homes with utilities hooked up and a traditional foundation is replaced as panels support the load of the structure. The latter can save homeowners thousands of excess dollars that would otherwise have been spent on rental properties while their home is fixed, but CFSIC leaves the decision up to individual homeowners regarding which method they choose.

Future funding from bonding and the $12 surcharge combined are expected to be about $150 million, but Maglaras is hopeful legislators will approve more to completely eradicate crumbling foundations in the state. "We think with great certainty that another $100 million is the end of this crisis," he said, adding that he expects to have a total of between 3,500 and 4,000 claimants.

"Definitely more money is going to be needed to get this taken care of," Currey said. "We're so far into it that we can't stop now. I think we have momentum on our side and we have a system that has run flawlessly."

Maglaras said that the early victims were not initially complimentary of his leadership, but the results speak for themselves. However, now that the dust has settled and emotions have calmed, Heim said that "CFSIC has done a great job," and praised Maglaras specifically. "He's done a great job. He really has. ... The bottom line is there's hope. It's nice when your house turns back into a home again."

Despite some personality clashes, "the reason the captive exists at all, the reason CFSIC exists, is because of the activism of victims. Period. End of story," Maglaras said, also adding praise for CFSIC staff and contractors who are actually fixing foundations.

Currey noted other partners who helped get results for crumbling foundation victims, including both the Malloy and Lamont administrations, CFSIC's Board of Directors, and the Connecticut Association of Realtors.

Missed opportunities

Still, some say the crisis could've been minimized had state officials taken it seriously when first notified as early as 2001, but they failed to act. The state Department of Consumer Protection was told of numerous failing foundations in 2003, linking J.J. Mottes to the issue, but did not investigate. And the Connecticut Insurance Department approved of allowing at least five insurance companies to change their policy language to explicitly exempt failing foundations from homeowners coverage, despite an ongoing DCP and attorney general's office investigation. Furthermore, the state Department of Energy and Environmental Protection had a map in its possession at least since 1985 showing that the Willington quarry sits on a bedrock that contains pyrrhotite.

The two family-owned companies at the center of the crisis were never found to be liable for the distribution of faulty material. At one point, DCP considered issuing a cease and desist order, but found that there wasn't enough information to justify it. In May 2016, the two companies that operated the construction company and quarry from which the tainted material came entered into a voluntary agreement with the attorney general's office and DCP to halt the sale of material from the quarry for a year. That agreement was extended each year until the concrete company went out of business.

An attorney general investigation determined that pyrrhotite was in fact causing foundations to deteriorate and that there was an abundance of the mineral in the Willington quarry. The owners of the companies continued to assert that the foundations were failing as a result of improper installation and not the aggregate used to make their concrete. Ultimately, the attorney general's office determined that there was insufficient evidence to pursue legal action against the two companies under the Connecticut Unfair Trade Practices Act because it could not prove the owners had any knowledge they were providing faulty materials.

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