City and Partners Break Ground on Los Arboles

Austin, KB Home (NYSE: KBH) and American CityVista, have partnered to announce Los Arboles, one of the largest new "infill" residential communities in the City of Austin. Priced from $110,000 to $150,000, Los Arboles provides an answer to long commutes and traffic congestion by being conveniently located nearby major employers, thoroughfares and Austin-Bergstrom International Airport. Henry Cisneros, chairman and CEO of American CityVista and Larry Oglesby, president of KB Home Austin, will join Austin City officials to kick off Los Arboles, a community of 326 homes at Nuckols Crossing Road and Viewpoint Drive, on Monday, Oct. 7, 2002, at 11:00 a.m. The homesites will be developed for KB Home by Ty Cunningham of Felipe Von, Inc. Construction is expected to start in June 2003.

American CityVista, a joint venture between Cisneros Communities Ventures and KB Home, was created to produce large-scale new home communities in urban inner neighborhoods. "Los Arboles is our introduction of the 'villages within the city' concept to Austin and we look forward to bringing the opportunity for homeownership to more first-time homebuyers in Austin," says Oglesby.

"The public, as well as local officials and business leaders, have been overwhelmingly receptive to the American CityVista mission of developing beautiful new communities, within city limits, that many homebuyers can afford," observes Cisneros. "Given the city's nationally recognized, unprecedented growth, there is clearly a market for a new community such as Los Arboles. We are proud to bring our concept to Austin."

The Los Arboles development will meet the City of Austin's S.M.A.R.T. (Safe, Mixed-Income, Accessible, Reasonably Priced, and Transit-Oriented) Housing criteria. S.M.A.R.T. Housing is a service designed to stimulate the creation of reasonably priced homes in Austin. It offers developers incentives by way of a single point of contact to advocate through the city development process and fee waivers for developing affordable housing units. S.M.A.R.T. Housing provides builders who reserve a minimum of 10 percent of their housing units for families earning 80 percent or below the median family income ($56,500 for a family of four), fee waivers of up to $2,000 per lot and faster development reviews.

"We have proven that when the City of Austin provides advocacy and certainty through our S.M.A.R.T. Housing Program, developers will respond," said Paul Hilgers, Community Development Officer. "It [S.M.A.R.T. Housing] works to mitigate the risk developers face. KB Home has helped to lead the way first with Springfield Village and now Los Arboles," he said.

Financing was made possible through $1.7 million from Liberty Bank to create the subdivision. In addition to the private financing, the Austin Housing Finance Corporation will loan $125,000 and guarantee $700,000 of the bank loan to help finance the acquisition of the land. The loan guarantee will be based on the financial strength of the AHFC, which is the housing production arm of the City of Austin.

"Together with the City of Austin, our goal is to create homes for entry-level, first-time and move-up buyers, who generally are middle-income families," Cisneros says. "Los Arboles will put homeownership within reach of families with household incomes of about $32,000 to $40,000 a year," he adds.

The Neighborhood Housing and Community Development Office's mission is to provide housing, community development, and small business development services to benefit residents so they can have access to livable neighborhoods and increase their opportunities for self-sufficiency.

The Austin Housing Finance Corporation was created in 1979 and assists Austin citizens with first-time homebuyer and home repair programs. The AHFC's primary mission is to generate and implement strategic housing finance solutions to benefit low-and moderate-income residents of the City of Austin. The City of Austin is committed to compliance with the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973, as amended. Reasonable modifications and equal access to communications will be provided upon request. Please call 974-3100 (voice) or 974-3102 (TDD) for assistance. This project is made possible by funding from HUD through the City of Austin.

CONTACT: Julie Beggs, (512) 974-3121 (voice) or (512) 802-7108 (pager)