U.S. Rep. Joseph D. Courtney says he is pursuing new options for helping homeowners with crumbling foundations, options that could provide actual financial assistance to victims in north-central and eastern Connecticut.
Courtney, D-2nd District, compared the problem to a problem in Florida that began in 2008 when homeowners there noticed corroding drywall that was imported from China and affected thousands of homes.
After assistance from the Federal Emergency Management Agency, or FEMA, was ruled out because the problem was not naturally caused, the IRS provided victims tax write-offs for their losses.
“That’s something we’re exploring,” Courtney, who is running for re-election, said this week.
While discussions are “very preliminary,” he said, “the IRS right now is certainly the focus that we’re exploring.”
Although a federal investigation into the companies at the center of the issue has yet to be suggested, Courtney said Monday that he would inquire about the possibility when he speaks with state Attorney General George Jepsen this week.
Meanwhile another option for relief, Courtney said, may be to filter funds from the Community Development Block Grant program, which provides municipalities with financial resources to address a variety of community needs.
While half the funds are earmarked for specific projects, there may be a way to provide some funding for victims from the remainder, Courtney said.
Courtney said that while grant funds would not be a sole solution to the problem, they could be part of a patchwork of components.
However, he said the results of a University of Connecticut analysis, which is part of the Department of Consumer Protection and attorney general’s office investigation into the matter, will be a “pivotal moment.”
The investigation is due to be completed by Jan. 1.
Courtney and other members of the state’s congressional delegation also are continuing to pressure insurance companies to participate in a program that would provide some financial relief to victims.
Following a July 12 meeting with Liberty Mutual, Allstate, and State Farm, U.S. Sens. Richard Blumenthal and Christopher S. Murphy, along with U.S. Rep. John B. Larson, D-1st District, and Courtney sent 34 insurance companies a letter last week to further pressure them to participate. Blumenthal and Larson also are seeking re-election in November.
“We have personally visited homes with these crumbling foundations and have seen firsthand the emotional and financial toll that this condition has taken on the homeowners,” the letter says, adding that repairs often exceed $150,000.
“Equally concerning, the loss in value of the impacted homes also threatens to weaken the fabric of many communities in our state,” the letter says, citing the potential for “extreme drops” in towns’ property values and tax revenues.
“Distressed communities and devalued homes are not good for anyone — not for the homeowner, towns and cities, the state and federal government, or insurers,” the letter says.
The lawmakers also sent a similar joint letter to Eric George, president of the Insurance Association of Connecticut.
Additionally, the Journal Inquirer has learned that Amica is the third known company of the four insurance providers that have agreed to participate if the program comes to fruition.
“Amica has agreed to participate in the crumbling foundation program advanced by the Connecticut Department of Insurance, and it will do so if the department moves forward with that program,” public relations coordinator Brendan Dowding said.
The Hartford and Travelers Cos. have previously confirmed that they have committed to participating in the potential program.
The attorney general’s office has said “a significant number” of the state’s home insurance providers must participate to reach the required $52 million mark, but would not specify the number.
Some of the state’s largest home insurance providers, however, already have said they have no intention of participating in the Crumbling Concrete Assistance Program, which the lawmakers called “the most promising and workable solution currently available” and “the only workable option put forward that provides relief outside of litigation.”
While the congressmen commended the four companies for agreeing to participate, other companies that provide coverage in the affected area have said they have no intention of participating in the program that could provide up to $52 million in aid.
Liberty Mutual spokesman Glenn Greenberg has said the company “thoughtfully considered the program and has decided not to participate. … We review and adjust each claim on its own merits.”
While not explicitly saying the company would not participate, Allstate spokeswoman Tracy King has said, “the focus should be on the concrete manufacturer and the contractors involved in its installation.”
Jepsen praised the lawmakers for their most recent push, but stressed there will be a lengthy and lasting impact to affected towns without financial relief.
“I’m grateful to our federal delegation members for their strong support and advocacy on behalf of this program,” he said, but noted that the “problem goes beyond individual homeowners and represents a public policy problem for our state.”
He said that while the program has the potential to offer financial relief to victims, it also is in the best interests of the insurance companies.
“It offers them benefits and protections — including caps on financial exposure and release from the uncertainties of existing and potential litigation by homeowners who participate, as well from any claims the Department of Insurance may have for unfair insurance practices,” Jepsen said.
He added that while he is grateful for those companies that have chosen to participate, he continues to urge others to collaborate to assist victims, who are “in desperate need of assistance.”
The Department of Consumer Protection announced last month that Jepsen’s office doesn’t have sufficient evidence to pursue legal action against Stafford-based J.J. Mottes and Becker’s Construction in Willington, the two companies at the center of the controversy.
In May, the companies entered into an assurance of voluntary compliance with Jepsen and the DCP to not sell material from Becker’s quarry for use in residential foundations at least until the end of next June.
