Hobbit Holes etc

If you read more you would've known that you have to have an airgap beneath the straw so water won't collect, and the lime plaster/mortar they used is breathable and vapor permeable. Meaning that water wont build up, which means less chance of mold. Also compared to all the carcinogens and other shit that's in modern housing I would definitely choose a small possibility of mold.
 
Some people can pull it off, but it is harder than one would suspect. I was helping a couple build a straw house, the trick is to have it totally finished and cured when it is nice and dry, have a huge overhanging roof to keep water away from walls, and really well planed foundation drainage. If any water gets into the straw you are totally fucked. We learned that the hard way. IMHO rammed earth is the way to go. The greeks did it and many of their monolithic structures are still standing today. That is one sick house. Duder who build it must be a smart cookie.
 
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I looked into this kind of housing, but in the long term, this thing would DEFINITELY have water issues. If you want to build below grade, I think WOFATI is the way to go. Straw and plaster is pretty common in places up here in Ohio and it's pretty god damn wet. You just need a good "hat and boots." Below grade straw though seems like a terrible idea

http://www.richsoil.com/wofati.jsp
 
My brother and his wife have lived in a hay bale house, they built, since 1992. plastered it with 3 coats of Lyme based plaster. they have never had a mold problem. we get plenty of rain here, in nebraska, and no mold problems.