Chinese drywall proposal would tap low-income funds

The federal government says it's close to unveiling a plan to help homeowners with tainted drywall from China. But a proposal on the table would tap money that's typically set aside for low income communities.

The U.S. Department of Housing and Urban Development will make an announcement soon about federal money that could be used to help remediate homes with bad drywall, according to a letter HUD Secretary Shaun Donovan sent to Florida Senator Bill Nelson.

HUD will issue guidance "making it clear that actions to remediate drywall can be eligible for assistance under the Community Development Block Grant program," Donovan wrote.

This is welcomed news for thousands of homeowners - most in Florida - who are grappling with problems associated with Chinese-made drywall that emits corrosive gasses. Homeowners complain the gasses put off a rotten-egg stench, damage wiring and appliances and make them sick.

But unless the government allocates more money for the grant program, other services would suffer, say representatives from Tampa and Hillsborough County government.

The county currently receives about $6 million a year for the program, said Valmarie Turner, director of the county's Affordable Housing Department. It has no problem, she said, spending the money.

"If (the government) designates this as an emergency and mandates we use this just for that, other programs would be affected," Turner said.

Especially, she said, since the average 2,000-square foot home costs more than $100,000 to remediate.

Bryan Gulley, a spokesman for Nelson's office, said he isn't aware of more money being allocated for the block grants.

"It's about priorities," he said. "The decision on how to spend the money is not made in Washington. Those decisions are made at the local level."

Turner and Cindy Miller, director of Tampa's Department of Business and Housing Development, said the money is usually reserved for low income families. They wonder how the grant money would be used in areas with Chinese drywall since middle income neighborhoods are hardest hit.

"The income levels would have to change," Miller said.

Experts have said that as many as 100,000 homes nationwide are affected by the bad drywall. Builders typically use domestic drywall but turned to imported drywall from China during the housing boom. Most homes with the drywall were constructed from 2004 to 2007.

A class-action lawsuit with about 2,000 homeowners from Florida and other states was filed in Louisiana federal court Thursday. The suit targets one of the primary manufacturers of the bad drywall, Knauf Plasterboard Tianjin Co. Ltd.