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I have a Ranch home with a finished rec room in the basement. It is our second year in the house. We had no mold/mildew problems last year. I put new carpet in the family room above basement and I filled in and covered a cold air return vent. The basement door is now very tight because the new carpeting is very thick. I also put two new glass block windows in the basement. Now I have mold/mildew showing up on most of the lower paneling in the basement.

Is it because of lack of air flow? How can I fix it?

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It's hard to say for sure if it's the direct reason or not, but it's certainly not going to help. Stagnant air means no drying, and moisture leads to mold growth. Aside, it's a very bad idea to remove return air vents: without them, the air the furnace is trying to force into the room has nowhere to go and the furnace is nowhere near as effective. To that point, while older houses might have one return per floor, a couple decades ago, returns started showing up in nearly every room. –  gregmac Oct 15 '13 at 17:53
    
There are several factors, ventilation being one of them. Seems likely that blocking ventilation was the breaking point. Anyway, (at least) one of the factors needs to backed off. –  mike Oct 16 '13 at 17:10
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2 Answers

The problem is humidity and condensation. Wet air is heavier, sinks, and the basement is cooler, so then condenses.

You need to dehumidify that air. The easiest solution is likely to buy a dehumidifier and run it constantly in the basement.

Re-opening the cold-air return can help, as it will circulate some of that moist air out of the basement as well.

All that said, this could be an issue with ground water as well. Are your walls/floor waterproofed from the outside?

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Go to the source of the issue.

You've blocked off your air movement mechanicals, and you're looking at a heavy, moisture-laden air mass settling down comfortably in your basement. You didn't have any problems last year because air movement was occurring.

Now, it may feel comfortable when it's freezing outside, but this humididy isn't doing your room surfaces (and possibly internals) any favor. This is also why you're seeing mold / mildew generally on the lower surfaces.

You'll certainly need some sort of air movement within the basement (and making sure there's adequate air flow between floors won't hurt either).

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