Only if it gets wet, as with nearly any non-concrete building material (wood, dry-wall, etc.) But if you keep the straw dry during construction the building can last for centuries.
The bales also make a natural fire retardant, as opposed to traditional building materials and methods. Because the straw is packed to tightly the oxygen necessary for fire can’t get in and it smolders and goes out. Ever try and burn a full phonebook in a fireplace? ;)

I live near the old straw board plant. They were not shut down by anyone. There were problems with their manufacturing process and they went bankrupt despite the government contributing millions to get them up and running.

depends. i live out in Spokompton and we have fairly dry weather during the summer and occassionally mild winters. it really doesn’t rain here as much as it does in Seattle or Tacoma. I would think that as long as the straw itself doesnt get wet/damp during construction you should be fine – by the time it’s all sealed with clay/lime it should be fairly waterproof.

Does anyone know what fungicide and fire retardant you would use to spray on this type home? Also – what about insuring them? Thanks!