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We bought a house that had a closet along part of the basement wall. it has the water meter in it and on outside wall also. we carpeted the basement along with the closet. the closet has drywall in it. I have stored some clothes in the closet to find that there is some white stuff (most likely mildew) on some of the jackets. What can I do or should I do to make the closet able to put clothes in? We are very handy so if we should have to put new dry wall up we can.

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Are you sure it's mildew? If it's mildew, this might be a moisture-related problem, but if it's something else (dust? efflorescence? bugs?) your solution may be very different. – Shimon Rura Aug 20 '12 at 19:20

Since you don't mention the problem elsewhere in the basement you can probably solve it with increased ventilation in the closet. You can start by leaving the door open to see if it helps. If you see improvement install some louvers to help circulate some air. You can add a small 4 inch fan to help move more air. If the exposed water pipes are not insulated condensation may be forming on the pipes adding moisture to the air. If opening the closet doesn't help you have two options decrease the humidity or raise the temperature. I spent some time in a tropical area. The closets had a socket for a light bulb typically a 60 watt bulb. With the door shut and the light on the temperature increases.This allows the air to retain more moisture so mildew won't form. Not the greenest solution though. Another option is a dehumidier either a conventional electric unit or the calcium cloride filled pan depending on how seasonal the problem is.

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You could also replace the door with a louvered model. – BMitch Aug 20 '12 at 12:10

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