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Toxic Chinese Drywall Creates A Housing Disaster

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Toxic Chinese Drywall Creates A Housing Disaster

Economy

Toxic Chinese Drywall Creates A Housing Disaster

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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne. Along the Gulf Coast and in other parts of the country, homeowners are finding that the very walls of their homes are toxic. An estimated 100,000 homes in more than 20 states were built with toxic drywall imported from China between 2004 and 2007.

That drywall corrodes plumbing and electrical systems. Homeowners blame it for headaches and respiratory ailments. It's a big problem. It's growing. And it affects not just homeowners, but builders and the mortgage industry.

From Miami, NPR's Greg Allen reports.

GREG ALLEN: In Florida, Louisiana, North Carolina and other states, thousands of homeowners have had an experience like Luis Gonzalez. Last year, when he and his wife Carrie moved into their new home in Homestead, Florida, he says they noticed an odor. They thought it was because it was a new house that had been closed up for a year before they moved in. But after living there for several months, Gonzalez says he became suspicious.

Mr. LUIS GONZALEZ: Well, the smell continued, as much as we cleaned and did stuff, it's still there in the house. And then I heard about this Chinese drywall. I started to check on the electrical outlets and the air conditioners, and that's when I noticed that everything was turning black and I was having an issue.

If you smell when you come up here, it's like a sulfuric - you know, like a weird smell when you get up here. Kind of like a burnt match. That sulfur smell that it has.

ALLEN: That's sulfur. Yes.

Gonzales takes me upstairs to a bathroom, where he opens a cabinet.

Mr. GONZALEZ: And, for example, this is underneath the sink. If you look underneath - you see all the piping? It's black. Copper piping - black, all the way through.

ALLEN: The problem began to emerge about a year ago. Tests found that Chinese drywall imported during the peak years of the building boom emits sulfide gases. The gases corrode copper coils in air conditioning systems and wiring in appliances and electrical outlets.

Those are the known effects. Federal and state health officials are trying to determine what the health effects might be for people who live in houses with the toxic drywall.

Mr. LUIS ANDREAS: Hi, Poppy.

Mr. GONZALEZ: Hey, buddy. Yeah.

ALLEN: Outside, Gonzalez picks up his three-year-old son, Luis Andreas. Gonzales is a burly man, an officer with the Miami Gardens Police Department. All three members of his family have been treated for health problems they worry may be related to the drywall.

About three weeks ago, they moved out of their house and took an apartment. Now, Gonzalez is wondering how to pay rent and, at the same time, a mortgage for a house they can't live in.

Mr. GONZALEZ: I called the bank and I asked for help. I asked them if they can please hold on for six months because I cannot afford to pay this mortgage and pay rent elsewhere. It's just not in my budget as a police officer. I don't make that much money. So I was hoping they would help me. And they're not willing to help.

Mr. DAVID DURKEE (Attorney): I make the analogy that it's like a small wave on the horizon. And this small wave, if not corrected, is going to continue to get bigger and bigger and bigger, until it hits the shores of Florida like the tsunami.

ALLEN: David Durkee is a lawyer who represents hundreds of homeowners in Florida with toxic drywall. Many, like Luis Gonzalez, just want the problem fixed. He's hoping his builder may respond to the threat of a lawsuit and replace all the defective drywall in his house, a job that typically costs 80 to $100,000.

But it's not just builders and homeowners who stand to be hurt by the growing number of houses found to have Chinese drywall. The toxic homes also pose a looming threat to the mortgage industry. Lawyer David Durkee says for the banks that hold the mortgages, these homes with Chinese drywall are literally toxic assets.

Mr. DURKEE: We're going to have hundreds, if not thousands of foreclosed homes that have this defective condition. The banks don't want that, the government doesn't want that and these victims don't want that. So we need to make sure that this safety net is fixed and make sure that these victims don't fall through this safety net.

ALLEN: Some builders have stepped forward and begun replacing the defective drywall, but thousands of homeowners have turned to the courts. Many of the cases are before a federal judge in New Orleans, who plans to begin holding trials in January.

Michael Ryan is an attorney who represents more than 250 homeowners with drywall claims. He says while the courts will eventually sort out who's liable, many homeowners won't be able to wait that long.

Mr. MICHAEL RYAN (Attorney): It's horribly complicated. There are multiple layers of insurance and responsibility, and it's so complex that I really think that the trials are not going to be the answer for the homeowners or really for the building industry. What we really need is a federal response here to save these homeowners and to save, frankly, the building industry. Otherwise, we're going to see widespread bankruptcies on both sides.

ALLEN: The Consumer Product Safety Commission is due soon to release the results of its investigation of Chinese drywall, and that may clear the way for further federal action. In Louisiana, state officials are moving ahead with a plan to use $5 million in federal housing money to help homeowners replace their tainted drywall. Florida Senator Bill Nelson has sent a letter to state legislators asking them to see if a similar program could be adopted here.

Greg Allen, NPR News, Miami.

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