The prisoners of drywall (© Denise and Keith Cramer stand with their son outside their Cape Coral, Fla., home, which they say is filled with tainted Chinese drywall. © Chip Litherland for the Wall Street Journal)

Denise and Keith Cramer stand with their son outside their Cape Coral, Fla., home, which they say is filled with tainted Chinese drywall. © Chip Litherland for the Wall Street Journal

Shortly after buying their home in Cape Coral, Fla., in 2006, Keith and Denise Cramer noticed a peculiar acidic smell they thought was wet paint. The odor never left.

There were other strange occurrences. Chrome-plated faucets and showerheads became pitted or turned black. The central air-conditioning unit faltered and failed. Their baby son, Gavin, suffered frequent ear and upper respiratory infections, and Gavin and Denise got rashes.

The Cramers — along with thousands of other homeowners in Florida and elsewhere — now believe that imported Chinese drywall is making them sick and destroying their property. The drywall, which is used in walls and ceilings, is emitting sulfur-compound gases that homeowners have described as giving off a sour or “rotten egg” odor. Many blame the fumes for eye, skin and breathing irritation and nosebleeds, as well as the corrosion of copper pipes, electrical wiring and air conditioners.

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The Cramers say that if government tests conclude the Chinese drywall is a health hazard, they will be left with a wrenching choice: “We will have to either ruin our son’s life by staying, or ruin our credit by walking away from the home,” says Keith Cramer, 34.

An estimated 100,000 houses across the country, most built in 2006 and 2007, may be affected, based on the 500 million pounds of Chinese drywall — also known as plasterboard or gypsum board — believed to have entered the U.S. during that period. The drywall is being investigated by numerous agencies, including the U.S. Consumer Product Safety Commission, the Environmental Protection Agency and the Centers for Disease Control and Prevention, along with state health departments.

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If the agencies conclude a “substantial” electrical, fire or health hazard exists, they could issue a recall or other action. More than 800 complaints from 23 states have been filed at the CPSC’s Drywall Information Center.

Experts estimate it would cost about $100,000 to pull out bad drywall and replace corroded electrical wiring and appliances in an average-sized home, and the problem is shaping up as a costly disaster for homeowners and the battered housing industry. Many homeowners are hoping the federal government will step in with some sort of aid similar to that provided for victims of hurricanes and tornadoes, as well as a moratorium on mortgage payments.

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Others are staking their hopes on lawsuits against homebuilders and the drywall manufacturers and distributors. Many of the suits are being consolidated in federal court in New Orleans. But suing foreign-based manufacturers for liability is difficult and complicated, legal experts say.

A few builders are already taking action. Lennar Corp. has set aside almost $40 million to fix 400 houses in Florida and is ripping out the drywall in many homes throughout the state, the Miami-based homebuilder said in a securities filing last month. Some other builders are making similar repairs.

While Chinese drywall was initially thought to have been used mainly in Florida and Louisiana, complaints have been pouring in from many other states. Colleen Nguyen, 41, of Virginia Beach, Va., says she, her husband and three girls moved out of their waterfront home built in 2006 and into a trailer last April for three months on the recommendation of their pediatrician. Their computers, phones and microwaves kept breaking down, and the circuit-breaker kept tripping, they say. They are suing their homebuilder and the drywall subcontractor. The cities of Virginia Beach and Norfolk, Va., recently banned builders from using Chinese drywall in construction.

Nguyen says the family left their belongings behind in the house because the odor had permeated the bedding and upholstery. “I won’t expose my children to it until they can explain what it is,” she says. “We have not had a bloody nose since the day we moved out.”

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One major manufacturer of the Chinese drywall, Knauf Plasterboard Tianjin Co., says its tests indicate that its products aren’t harmful. Testing found that carbon disulfide and carbonyl sulfide are being emitted by some of its drywall, but not at levels that would damage health, says Phillip T. Goad, principal toxicologist and partner at the Center for Toxicology and Environmental Health in North Little Rock, Ark. The center is a private company hired by Knauf Tianjin that consults and does testing for corporations and government agencies.

David Krause, state toxicologist for the Florida Department of Health, says that the department’s preliminary tests indicated Chinese drywall is emitting sulfur-compound gases, but adds that the tests weren’t designed to quantify the rate of emissions. The CPSC plans to measure the amount of sulfide gases emitted by various types of drywall, and will work with other governmental agencies to determine whether they are at harmful levels, Krause says.