Is crumbling foundation relief-fund surcharge fair?
Trying to figure out what the fair thing to do in dealing with this crumbling foundation situation is a tough one, and this is coming from a guy who is paid to have opinions.
Foundations are deteriorating beneath thousands of homes in the northeast corner of Connecticut. These foundations contain aggregate from a Willington quarry tainted with pyrrhotite, a mineral that corrodes and cracks the concrete.
To save a home from condemnation, it has to be lifted off its foundation while a new foundation is poured. It’s expensive, costing $150,000 to $250,000. Owners are paying mortgages on homes they can’t sell.
This slow-moving disaster can also erode town tax bases, as assessments on these homes plummet.
FEMA has concluded, however, that this disaster doesn’t qualify for disaster relief.
The concrete company that poured the foundation went under. There is no money to collect there. And while homeowners buy home insurance for financial protection from catastrophe, insurance companies say this catastrophe is not covered because it involved a deficient building material.
If a runaway boulder cracks your foundation, you’re covered; pyrrhotite turns it into dust, you’re out of luck.
A year ago the General Assembly authorized borrowing $100 million a year for five years to set up a fund for repairs. It would only provide a fraction of the $5 billion to $7 billion that could be needed to replace all those foundations. Gov. Dannel P. Malloy’s administration estimates as many as 34,000 homes in 36 towns are affected.
In the just-completed legislative session, the assembly voted to provide more aid. The legislature is placing a $12 annual surcharge on every homeowner insurance policy to enhance the crumbling foundation account, with an insurance company created by the state managing the relief fund.
It would generate an estimated $105 million over 12 years, still far short of the need.
At $1 monthly, the surcharge is minimal. But is it fair? Why should the state tack a surcharge on a person’s insurance to cover someone else’s damages that are not covered by their insurance? Many homeowners have filed claims for damages, only to learn contractual fine print ruled them ineligible. Where is their surcharge-subsidized relief fund to tap?
Seems like a slippery slope. Indeed, the bill was amended to also provide remediation for homes with radon and lead paint, and for homes that are sinking and must be shored up in a New Haven neighborhood. Who will come forward next to say their problem, not covered by insurance, deserves help via a surcharge?
So as much as I feel terrible for the plight of these homeowners, I don’t think this approach to solving the problem is fair.
This philosophical dilemma helps explain the close vote in the Senate, with the measure winning approval by one vote. Lawmakers appeared driven as much by geographical location as partisan ideology. In the Senate the only local legislator to vote in favor was Sen. Cathy Osten, D-Sprague, whose district reaches into effected towns.
Voting against were Sen. Paul Formica, R- East Lyme; Sen. Heather Somers, R-Groton; and Sen. Art Linares, R-Westbrook.
Support was stronger among local House representatives, where the measure passed 97-42. Rep. Mike France, R-Ledyard, cast the lone no vote in the local delegation.
Voting to create the surcharge were Reps. Christine Conley and Rep. Joe de la Cruz, both D-Groton; Rep. Emmett D. Riley, D-Norwich; Rep. Chris Soto, D-New London; Rep. Diana Urban, D-North Stonington; Rep. Devin Carney, R-Old Saybrook; Rep. Holly Cheeseman, R-East Lyme; Rep. Kathleen McCarty, R-Waterford; Rep. Kevin Ryan, D-Montville; and Rep. Doug Dubitsky, R-Chaplin.
No one should be surprised if these lawmakers, or their successors, are asked for higher surcharges in years to come.
Paul Choiniere is the editorial page editor.