Hurricane relief organizations whose volunteers built or repaired hundreds of damaged houses after Hurricane Katrina have found they installed toxic Chinese drywall in more than 200 buildings, requiring hundreds of low-income families to move out for months while the houses are gutted anew and rebuilt.

For many families, it's a return to stress, dislocation and helplessness more than five years after the storm — and long after they thought their ordeal was over.

For relief organizations, which have decided to shoulder the full cost of millions of dollars in repairs, doubling back to gut and rebuild old homes is a major budget setback that cuts into their future work.

The saga of Chinese drywall is best known so far through the stories of thousands of families, especially in Louisiana, Florida and Virginia, whose new or repaired homes were ruined by defective drywall introduced to the U.S. market after 2006.

In federal class-action suits in federal court in New Orleans, they described how sulfurous Chinese drywall emitted vapors that corroded electrical wiring; ruined the circuitry of air conditioners, appliances, computers and televisions; tarnished jewelry and other metals; pitted mirrors and sometimes made their homes stink of rotten eggs.

Among them were middle-class families pushed into bankruptcy, and in a few cases, notable names including Saints coach Sean Payton, whose expansive Mandeville home had to be torn apart.

But it also turns out that volunteers who came to New Orleans during their spring and winter breaks unknowingly installed toxic drywall in the homes of the poorest and most vulnerable families as well.

As a result, Habitat for Humanity, Catholic Charities' Operation Helping Hands and Rebuilding Together New Orleans have all launched programs to identify tainted homes, move homeowners out, sustain them for months and make the houses safe for occupancy.

That's much different from homeowners' experience in the commercial sector, where distressed families have spent grueling years in court suing for damages.

'We're committed to these clients'

"We're committed to these clients because many of them are elderly," said Kevin Fitzpatrick of Operation Helping Hands. "They're vulnerable. They don't have the means or resources to make a claim, and a class-action suit could be five, six, seven years away."

"How could we serve anyone else in the city, knowing that we were denying this?" said Daniela Rivero, executive director of Rebuilding Together New Orleans.

Rivero's organization knows it has 19 homes with the bad drywall; it plans to test another 33.

Fitzpatrick said his agency last week began testing the first of 44 suspicious houses it picked out using internal records tracking Chinese drywall. Another batch of 24 or so will follow.

The largest of all the agencies, New Orleans Area Habitat for Humanity, has to redo 189 houses.

It has already ripped apart and rebuilt 79, said Jim Pate, its executive director.

All of the agencies have decided to pay families' moving costs and rent for the three to four months it typically takes to gut and rebuild a damaged house, officials said.

Relying on professionals this time

Fixing a home is major work, and officials said they are following or exceeding strict protocols laid out by U.S. District Judge Eldon Fallon in class-action suits consolidated in New Orleans.

Officials said professional contractors, not volunteers, rip out bathrooms, kitchens, wiring, insulation, carpets and drywall, leaving a house once again open to the studs.

Dust is vacuumed and collected during the process. Exposed studs must be wiped down and allowed to dry before the house is put back together with new materials.

"It means going back to the post-Katrina landscape," Fitzpatrick said.

Meanwhile, officials at all three agencies said they find apartments and pay displaced families' rent.

Some agencies have hired additional workers just to manage drywall repairs and relocations.

Habitat for Humanity estimated the cost at $41,000 for each tainted house, not including rent support for displaced families.

In many cases, the experience has put complicated stresses on the relationships between homeowners and the agencies that helped them get into their houses.

On one hand, Thomas McDonald, 42, a bassist preparing to move back into a rebuilt house in Habitat's Musicians' Village, said he is grateful for the Habitat program that got him into the first house he ever owned, and the spectacular social success that is the Village itself — close, friendly, warm. His baby daughter, Lollette, is named after a neighbor.

He said he teared up in the fall of 2008 when he received the keys to his house on Bartholomew Street.

"I wouldn't have a home but for this," he said.

But McDonald and many neighbors also believe that as word spread in 2009 that there was Chinese drywall in the Village, Habitat seemed to drag its feet, trying too cautiously to calibrate the damage and seeming to minimize the scope of the problem.

Pate, meanwhile, described early rounds of sophisticated lab tests on suspect drywall in 2009 that came back largely negative. That suggested that perhaps their brand of Chinese drywall, which had not yet cropped up in news reports, was safe, he said.

Moreover, he said, his office was not getting significant complaints from homeowners about tainted homes in 2009.

Houses were all but unlivable

As the crisis worsened around the country that year, Pate said, Habitat ordered more lab tests. That fall, the agency began seeing positive results and stopped installing the drywall.

And soon enough, McDonald said, he and other homeowners were realizing their houses were all but unlivable.

Although an early drywall sample from his house tested negative, McDonald said his house was showing the classic signs of wiring corrosion. In consideration of his wife's pregnancy, McDonald moved the couple out last fall, before any laboratory confirmed the drywall was contaminated. Once, on his return to the closed-up house, "it smelled like a match factory," he said. "It was just overwhelming."

He thought he had bought "an albatross," a ruin that could not be lived in.

Not long after, McDonald said, he nearly wept a second time when he got a letter from Habitat reporting his house had tested positive on a retest, and that it would be repaired.

While acknowledging their gratitude, McDonald and others believe it took Habitat too long to acknowledge the scope of the problem and throw itself into an aggressive solution.

"It's like there was a period when they went into corporate self-protection mode," McDonald said. "And I get that. But their name is Habitat for Humanity.

"I mean, 'humanity' is right in the name. They didn't own the problem until it was nailed to their heads."

Pate rejects that notion.

"We had no reason to hide it," he said. He pointed out that as the mortgage holder, Habitat has every economic incentive to protect each home.

More important, he said, "They are our partner families. We do this because this is what we do — make decent, safe and affordable housing for our families. That's our mission statement.

"We thought the material we were using was tested, and there was not a problem. We thought we were safe."

By now, Habitat is deep into its rebuilding program. Pate said he expects Habitat's houses to be cleansed and rebuilt by late summer.

Meanwhile, portable white moving pods stand near the curbs of several houses in the Musicians' Village, and in the coming months they will be dropped in front of other houses built by Katrina relief organizations.

They are for homeowners. furniture, going out or coming back after a rebuild.

"For me, this is like another Katrina," said Rivero of Rebuilding Together. "We worked so hard to rebuild these houses, and now we have to rebuild them again."

By Bruce Nolan
The Times-Picayune