Dallas native C. Kent Conine comes from a long line of Texans involved in the construction industry. Now this diversified builder is taking the NAHB's reins as president. By Christina B. Farnsworth

The 2003 NAHB president C. Kent Conine's theme for the year is, "Together we build the American Dream." And by that, he means all the agencies and industries that contribute to building and purchasing homes.

Three major issues will be top of mind during Conine's term: proposing and passing legislation for a single-family, homeownership tax credit, creating a secondary mortgage market for construction loans, and obtaining affordable liability insurance.

Getting credit

As Conine sees it, the proposed tax credit would be paid to builders to help moderate-income home buyers, such as teachers, policemen, firemen, and minorities, buy new homes. "Say it's a house selling for $100,000. The tax credit could be $30,000, so the new homeowners could buy the house for $70,000. A prorated cap, of say five years, would keep new owners from selling the house [right away] at true market rate and keeping the profit."

Conine says it's an idea that could work as well as the multifamily tax credits have, and they have been around for 15 years. It could also boost minority homeownership, currently around 50 percent, he notes, which badly lags behind the 68 percent overall homeownership rate.

Conine praises legislation passed on Nov. 15 by the lame duck session of Congress. The legislation contains priorities to expand rental housing and homeownership opportunities across the nation. The NAHB will work to expand on this agenda in 2003.

Finding second

In his effort to support creation of a secondary market for construction loans, Conine chides banks and their auditors for not disclosing which real estate loans fund housing. Commercial and residential real estate loans are all lumped together into one category.

Regulators, stockholders, and investors need more details on the characteristics and performance of banks' real estate activities than are currently provided for the evaluation of banks' risk management, he says. "Public disclosure of such data could vastly improve the flow of funds for housing-related acquisition, development, and construction (AD&C) financing," remarks Conine.

The way banks currently report on their real estate loan portfolios draws no distinction between residential and non-residential AD&C loans, leaving regulators and investors with no way of differentiating the size and performance of loans in this category.

Conine feels that a single agency should be the conduit that packages loans for a secondary market. Fannie Mae, Freddie Mac, HUD, or the Federal Home Loan Bank could package the loans. Whichever entity becomes the conduit would find it much easier if the information was available to appropriately assess risk.

Under cover

The third big issue the new president wants to tackle during his term is insurance, the lack of various types of coverage--and its high cost when available. Myriad issues surround the reinsurance industry, front-line insurance carriers, liability, property and casualty coverage, and builder's risk.

Mold issues and construction-defect litigation are the biggest roadblocks. "[The NAHB] needs to continue to encourage scientific research on mold," Conine says. He recommends builders check out the NAHB's Web site, www.moldtips.com. He also says that the NAHB needs to encourage state legislatures to come up with dispute resolution measures.

Photo: Herman Farrer Photography

Conine has developed land and built a variety of housing products from apartments to custom homes. Some insurers, he says, are no longer writing residential policies in certain states. And attorneys are joy-riding litigation in which they are the primary beneficiaries, he adds. Conine feels that even the homeowners who sue get a raw deal.

Say there is a $100,000 problem. Often the builder is not even allowed to intervene and fix it. The lawyers take the suit on contingency. When the lawsuit is settled perhaps there is a $100,000 settlement. The lawyers take 40 percent leaving the homeowners with $60,000 to solve a $100,000 problem. Such settlements make both builders and homeowners losers.

The NAHB's Insurance Task Force has recommended what Conine describes as some "fantastic ideas." One idea is to prove to your insurance underwriter that you are a good builder and that you come to the NAHB meetings and have educated yourself on building science issues. He encourages all builders to get a copy of the insurance task force report, and read it.

Where it began

Conine is the fourth generation of his family to be in the building industry. His grandfather and great grandfather on his mother's side were land developers. His grandfather on his father's side was a utility contractor installing water and other utility lines in new developments. Conine spent his summer vacations from school helping install some of Dallas' infrastructure. And Conine's dad? He was a lender.

So it was only natural that Conine follow in the family's footsteps. In 1976, after graduating with a bachelor's degree in business with an emphasis on real estate from Texas Tech in Lubbock, Conine jumped at a Denver job with mortgage bankers Lomas and Nettleton that sounded like it would give him time to learn to ski. However, it proved to be one of the driest winters in Colorado history, so there was no skiing. Plus, he discovered he was homesick.

A year later when a friend of the family, Bob Hickman of Metroplex Associates, in Dallas, called and asked him if he wanted to come home and join the multifamily housing builder, Conine leapt at the opportunity. He stayed with the company five years until it was acquired by a condo conversion firm. Conine then started his own firm, the Dallas-based Conine Residential Group.

On the homefront

Conine built his first two homes, side by side, in 1981. He sold one and moved into the other. He built single-family and multifamily homes throughout the late '70s and early '80s. His company launched its subdivision development in the mid-'80s. It further diversified into apartment and home building in the late '80s and early '90s.

Diversity has helped Conine successfully ride business cycles. If one division hit a bump or slowed down, another would be doing well, he says. His company continues to be a small private company with 10 employees. He also has an ownership interest in Zachary Custom Builders.

For Conine, diversification does not include long-term property management. Unlike other builders who build and hold apartments for their own investment, Conine Residential builds them, polishes them up, and sells them.

Conine offers rent incentives to get occupants into the buildings while they are still under construction. He keeps the buildings two to three years, while the "landscaping takes hold," and he can fully lease the building without having to offer incentives--that's when they are most valuable, he feels. Then he sells. Managing apartments is a whole different business, he says, and he prefers building and development.

As for development, Conine acquires land as he needs it. He doesn't want to land bank or have three to four years of land supply. Of course, Dallas, he says, doesn't have some of the land development and approval problems that other areas do. It takes, he says, only 60 to 90 days to get the land he acquires through its approval process. Texas accepts growth, Conine says, and growth keeps taxes down.

Moving up

Conine became active in his local NAHB in the early '80s when the International Builders' Show came to Dallas. Then, director Ted S. Schlossman asked him to come to the 1987 NAHB fall board meeting in Maui, Hawaii. His first committee assignment came from Shirley Wiseman Lach (the first female NAHB president) in 1989. She tapped him for the land development committee as well as getting him involved in the Housing Finance Committee. Thus, began Conine's path up the leadership ladder. Conine chaired the land development committee in 1991.

J. Roger Glunt, the NAHB's 1993 president made Conine a national representative. (Each of the 50 states has one person who serves as national representative to the NAHB, representing his or her state.)

One of the ironies of Conine's climb up the NAHB ladder is that he became president of the Texas state association in 1996 before he became president of his local Dallas association in 1997. Because the terms overlapped, "There was one month," he says, "that I was president of both at the same time."

Over three years, Conine began the final ascent through the ranks: national secretary, treasurer, vice president/president elect.

Along the way, he has become a family man. Conine and his wife Meg have three sons: Travis, 9, and twins Mason and Shelby, 7. All the children are named after Texas counties.