KB Home Will Build
In Katrina Region

KB Home is forming a joint venture to build homes in areas affected by Hurricane Katrina and has acquired an option on land near New Orleans, its chief executive said.

Bruce Karatz, chief executive of the Los Angeles-based home builder, said KB's partner in the 50-50 joint venture is Shaw Group Inc., an engineering and construction company based in Baton Rouge, La. Jim Bernhard, Shaw's chief executive, confirmed the joint-venture plan. Neither side would estimate the likely investment, but Mr. Bernhard said: "We're going to build a significant amount of homes."

The joint venture is a sign of confidence in the region's economic prospects and ability to draw back evacuees.

KB officials said the joint venture has an option to acquire a 3,000-acre agricultural property known as Churchill Farms in Jefferson Parish, about a 30-minute drive from central New Orleans. They declined to identify the current owner of the land or specify any financial details. The land is close to the Alario Center, an athletic facility near New Orleans.

Mr. Karatz added that the venture soon will look for land in Baton Rouge and later will explore opportunities on the Gulf Coast of Mississippi. Mr. Karatz, who toured the area yesterday, acknowledged that it isn't clear yet how many evacuees will decide to return to New Orleans but added that "the general talk is that people do want to move back." The American Red Cross has estimated that hurricanes Katrina and Rita destroyed more than 200,000 homes in Louisiana and Mississippi and damaged many more.

The joint venture is likely to focus mainly on building detached single-family homes, Mr. Karatz said, but also will consider townhomes and condominium buildings. KB specializes in homes for people with moderate incomes, known as "starter" and "move-up" properties.

D.R. Horton Inc., another large home builder, recently announced that it has acquired land in Baton Rouge, and a spokeswoman said the Fort Worth, Texas, company already has begun construction there. Many people displaced by the storm have moved to Baton Rouge.

Other major builders have been less eager to jump into the region. Representatives of Centex Corp. and Pulte Homes Inc. both said their companies weren't active there in the past and didn't have plans to go there.

Shortly after Katrina hit, Shaw was among the companies awarded federal contracts to pump floodwater out of New Orleans and to provide temporary roofing and housing in the area.

KB Home, the nation's fifth-largest home builder, recently announced a partnership with Martha Stewart to roll out a 650-plus new home community in Raleigh, N.C., which she will help design.

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