In pyrrhotite-contaminated foundations, moisture migrating through the wall causes the mineral to rust and expand, causing the foundation to crack and spall until the wall eventually collapses. The only fix is to replace the entire foundation.

The state legislature may need to come up with $350 million in the coming years to help thousands of homeowners from Auburn to Springfield whose foundations are contaminated with a mineral that makes them crumble.

Any home built with concrete from the J.J. Mottes Concrete Co. in Stafford Springs, Connecticut, is at risk for pyrrhotite contamination, according to a recent report from a state task force created in 2018. Mottes sourced its aggregate from Becker’s Quarry in Wilmington, Connecticut, one of the few locations in the country where the mineral pyrrhotite is found.

Moisture migrating through the wall causes the pyrrhotite, an iron sulfide, to rust and expand, causing the foundation to crack and spall until the wall eventually collapses. The only fix is to replace the foundation, which costs between $150,000 and $250,000. While not all foundations contaminated with pyrrhotite deteriorate, research has not found a minimum safe level of the mineral.

Because many of J.J. Mottes’ records were destroyed in a fire, it’s impossible to know how many homes and commercial buildings are affected; however, the pyrrhotite commission’s investigations led them to believe around 1,500 or 2,000 homes could need their foundations replaced, said state Sen. Anne Gobi, D-Spencer and co-chair of the special commission investigating the pyrrhotite problem. More than 20,704 homes were built within 20 miles of the Mottes facility between 1983 and 2015 when the Becker Quarry was active and supplying aggregate to Mottes, including 4,050 homes built in Springfield alone.

“One of what I think is the scarier parts of this is, if you built a home in the 1980s but you’re only now just starting to see the problem, by now you’ve likely gone through two or three buyers of that property,” Gobi told Banker & Tradesman.

What Realtors Need to Know

The problem was first discovered in Connecticut about 10 years ago. The state last year started a nonprofit “captive” insurance company charged with helping homeowners pay for fixes. The company is funded by state-issued bonds and a fee in insurance policies. As of November, nearly 1,200 homeowners and condominium associations had filed claims with the company worth over $100 million. The state has also launched a $20 million loan program to help homeowners replace decks and other items destroyed when a home’s foundation is replaced, but which aren’t covered by the captive insurance company. Traditional insurance policies do not often cover the problem.

Gobi told Banker & Tradesman the pyrrhotite commission had a hard time discerning the true scope of the problem’s impact on the housing market in the south-central part of the state, but if nothing is done, the risk could be significant.

“There seems to absolutely be a demonstrated effect [to a home’s value] but until we see it more widespread we won’t know what it will do,” she said. “If people are walking away from a home because they can’t afford to repair it, that doesn’t do good things for home values in a neighborhood.”

For now, real estate agents selling or buying in the area should use a standard disclosure form developed by the Realtor Association of the Pioneer Valley, Gobi said, so there is consistency in the information all homebuyers have access to.

State’s $350M Liability

The pyrrhotite commission recommended Massachusetts take a multi-pronged approach to solving the challenge: copy Connecticut’s captive insurance company; continue a testing reimbursement program for all homes within 50 miles of J.J. Mottes’ facility (corresponding to a 90-minute drive); require all home sellers to disclose any testing, inspection and repairs to their foundation; require foundation testing for any home built within 30 miles of the Becker’s Quarry between 1983 and 2015; and lobby the state insurance commissioner to discourage insurers from canceling policies on homes contaminated with pyrrhotite.

“We are a commonwealth for a reason,” Gobi said. “When we’ve had areas of the state where we’ve had issues for mother nature, we chip in and make sure people are taken care of. When a seawall breaches, when the tornado whipped through in 2011, we helped out. We don’t tell people ‘You’re on your own.'”

Assuming a $175,000-per-home payout, the commission estimated up to $350 million would be needed to make homeowners whole, its report states.

In addition to bonding for the money and enacting a fee on homeowners insurance policies, Massachusetts could ask insurance companies to contribute to funding foundation replacements or put an assessment on homes, the report recommended.

Gobi said she wasn’t sure the legislature could craft a comprehensive response before the session ends in July, but said she hopes at least more funding for the testing reimbursement program will be allocated while work continues on a larger package of laws.