Crumbling Foundation Update
November 6, 2019
Given the prevalence of crumbling foundations in your region, I wanted to provide you with an update on what I am doing to help secure assistance for victims of crumbling foundations due to pyrrhotite.
New Gap Financing Program
Last week, I joined Governor Lamont in announcing that a new statewide loan program for crumbling foundations victims was up and running. At present, this program only applies to homeowners with crumbling foundations, but will soon be open to condominium owners as well. This loan program allows those who have received assistance from the Connecticut Foundation Solutions Indemnity Company (CFSIC) to receive “gap financing” from participating banks in Connecticut to cover repairs that CFSIC cannot cover.
I have been working since June of 2018 with federal financial regulators, including the Federal Housing Finance Authority, requesting that regulators issue flexibility guidance to financial institutions who may wish to provide affected homeowners with a line of credit or a loan to fix their foundations. In the following months I continued to work with regulators and stakeholders in Connecticut on securing gap financing for homeowners and now, almost 17 months later, homeowners with crumbling foundations who still have a gap between what CFSIC can provide and what is needed to repair their home can utilize this low-interest loan program. It’s especially important to note that the federal casualty loss deduction – a tax deduction that I worked to secure for crumbling foundations victims back in 2017 – can be used to help homeowners recoup the cost of repairing the foundation and repay the loan. For more information on the casualty loss deduction and crumbling foundations, please visit my website. For more information about the crumbling foundations loan program, please visit the Connecticut Housing Finance Authority’s website.
Progress on Federal Research Funding
Additionally, I wanted to provide you with an update about federal research dollars going to the crumbling foundations issue. As I continue to work with federal, state, and local partners to respond to the crumbling foundations crisis, one persisting gap in addressing this problem has been the lack of reliable standards for evaluating what quantity of pyrrhotite must be present in concrete in order to pose a danger to the foundation’s structural integrity. Many homeowners have come to me with questions about their home’s condition, as they live in the affected region, have detected pyrrhotite in their foundation, but don’t yet have any cracking. This becomes a major problem for the real estate market, as these homeowners do not know if or when a foundation containing pyrrhotite may degrade.
The University of Connecticut and other institutions have worked to explore this issue, but more work is need to create a federal standard for pyrrhotite. To this end, I worked with my colleagues in the House in passing an amendment to secure $4 million for the National Institute of Standards and Technology to develop a cost-effective and standard testing method for pyrrhotite. Right now, many testing methods result in false negatives or false positives, so it is essential that NIST develop a standardized testing method. In addition, our amendment would require NIST to create a risk-rating scale for structures, helping homeowners, businesses owners, and municipal leaders understand what quantity of pyrrhotite poses a threat to their foundation. The Senate’s spending bill included $1.5 million for NIST to conduct this research, and now – as the House and Senate are preparing to bring a final spending package to conference – I am working with my colleagues to ensure that any final bill includes the full $4 million for NIST to conduct this work.
Federal Research at the U.S. Government Accountability Office (GAO)
Back in July of 2018, during the House’s consideration of the 2019 fiscal year spending package, I joined Rep. John Larson (CT-01) in introducing a crumbling foundations amendment which would direct the GAO to conduct a study on the financial impact of crumbling foundations due to pyrrhotite, including recommendations for the actions needed to mitigate the economic issues from this crisis. The GAO is a non-partisan agency which provides the federal government and the public with fact-based information on a number of topics. Our GAO amendment passed the House with bipartisan support and became law in February of 2019.
As a result of this legislation, GAO researchers have been working for months to understand the scope of the scope of the crumbling foundations issue and to publish a public report on their findings, which may include proposals for additional legislative or regulatory actions needed. The GAO has already interviewed numerous stakeholders, including local universities conducting pyrrhotite research, banks, elected officials, and homeowners, and GAO researchers will be visiting Connecticut for a site visit this fall to see first-hand the effect this problem has had on communities in this region. As GAO completes this work in the months ahead, I will be sure to update you on the results of their study.
As always, if you have questions or concerns about crumbling foundations or other issues, please do not hesitate to contact my office.
Member of Congress