I've seen a few recommendations for framing the walls and sheet rocking but I am afraid there might be too much moisture build up with our extreme hot/cold Texas weather.

The main concernas mentioned my seth is water and moisture problems.

Police shut that one down in a raid too. normally they break a big hole in the house and tap into the electrical wire before the meter to steal juice. and the excess moisture destroys the plaster/drywall.my buddy was asked if the tenant can section off an area in the garage for legal pot growing. outside is -20 and he needed temps of 60F+. lol

It's a small apartment with no radon issues or any major water penetration, etc.

Seal all accessible air penetration points between conditioned space and attic with low expansion foam.

Likely have moisture damage unless it's absolutely bullet proof.

There is a serious moisture problem that needs to be fixed.

However, I would imagine any siding that is warping and losing its integrity would present a problem, particularly in an area with the moisture that Everett has. 

- Up-front cost difference- Energy (heating) costs- Comfort- Resale value impact- Anything else that's relevantWhen I say crawl space, I mean a non-ventilated, moisture-protected (vapor barrier, waterproof spray, and sand/gravel), heated space, NOT the dirt-covered, ventilated space of old.Thanks!

Take a look at this link. http://www.homedepot.com/p/DRIcore-7-8-in-x-2-ft-x...You can also install a vapor barrier to prevent cold air, moisture, etc from coming up through.