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Plans in Louisiana to Help Chinese Drywall Victims

Sep 23, 2009 | Parker Waichman LLP

Louisiana residents whose homes have been ruined by defective Chinese drywall are getting a bit of relief from the state.  According to the New Orleans Times-Picayune, the Louisiana Recovery Authority (LRA) today set aside $5 million of federal Community Development Block Grant disaster recovery money to compensate hurricane victims whose homes were built with Chinese drywall.  Separately, the State Tax Commission will allow reduced tax assessments on affected homes.

Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory an sinus problems that may be linked to the gases.

Louisiana is among the states hardest hit by the Chinese drywall crisis. According to the Consumer Products Safety Commission, 184 homeowners there have filed complaints with the agency. However, it is likely that thousands of homes in the state contain the defective material. Many of the Chinese drywall homes in Louisiana were among those rebuilt following the devastation wrought by Hurricane Katrina.

The LRA was established in 2005 following hurricanes Katrina and Rita, and provided funds to residents for rebuilding.  According to the Times-Picayune, earlier this summer, the Louisiana legislature had mandated that the LRA create a $5 million initiative to help drywall victims.  Now that funding has been set aside, the authority’s staff will now design a program and make it available for public comment.  The program's application process and eligibility requirements are still being developed, the Times-Picayune said.  Once the details are set, the LRA, legislative budget committee and the federal Urban Redevelopment Authority would have to approve the plan.

Meanwhile, WWLTV is reporting that the Louisiana State Tax Commission has given all tax assessors permission to reduce assessments on homes damaged by drywall.  In St. Tammany Parish, affected homeowners will need to show proof that the there is Chinese drywall in their house. The tax assessor there told WWLTV that a letter from a contractor would suffice.


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