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EIFS was developed in Europe after World War II and was initially used to retrofit masonry walls. EIFS started to be used in North America in the 1960s, and became very popular in the mid- 1970s due to the oil embargo and the resultant surge in interest in high energy efficiency wall systems such as EIFS provides. The use of EIFS over stud-and-sheathing framing instead of over solid walls is a technique used primarily in North America. EIFS is now used all over North America, and also in many other areas around the world, especially in Europe and the Pacific Rim.
In North America, EIFS was initially used almost exclusively on commercial, masonry buildings. As of 1997 EIFS accounted for about 4% of the residential siding market and 12% of the commercial siding market.
In the late 1980s problems started developing due to water leakage in EIFS-clad buildings. This created an international controversy and numerous lawsuits. Critics argue that, while not inherently more prone to water penetration than other exterior finishes, barrier-type EIFS systems (non-water-managed systems) do not allow water that penetrates the building envelope to escape.
The EIFS industry has consistently maintained that the EIFS itself was not leaking, but rather poor craftsmanship and bad architectural detailing at the perimeter of the EIFS was causing the problems. As a result, building codes began mandating a drainage system for EIFS systems on wood frame buildings and additional on-site inspection.
Most homeowner insurance policies cover EIFS and EIFS-like systems. Though there are some cases where insurance companies may not offer coverage for EIFS several companies do. Also, some facility owners have found that EIFS systems that are installed at lower building levels are subject to vandalism, as the material is soft and can be chipped or carved resulting in significant damage. If these concerns exist, specifying heavier ounce reinforcing mesh can be the answer. Building to these specifications can drastically increase the durability of the EIFS system.
EIFS installation was found to be a contributing factor in the multibillion-dollar problem known as the "Leaky condo crisis" in southwestern British Columbia and the "Leaky homes" issue in New Zealand that emerged separately in the 1980s and 1990s.[8