By Iris Richmond. Remember the partnership between KB Home and American CityVista (ACV) headed by former HUD Secretary Henry Cisneros, the one formed to pursue affordable housing ventures?

Rumors circulated about a riff between the partners after KB Home passed on an infill project, Monticello Village in San Antonio. Yet Bruce Karatz, president and CEO of KB Home, and Cisneros, president of ACV, both say the partnership is intact.

When KB Home "reluctantly passed" on the project, it stirred up hints of controversy locally. Cisneros explains that, while KB Home gets "first crack" at every project ACV undertakes, KB needs, at minimum, roughly 100 units to be involved, and home prices should not exceed the market's median price. Originally slated for 90 units, Monticello barely met KB's standards. Then the Monticello Park Neighborhood Association voiced concerns about the high density level. Consequently, lot sizes were increased, which resulted in fewer units and a $20,000 price increase. After KB Home's exit, Perry Homes, based in San Antonio, climbed on board.

"It's always a difficult tightrope to walk when working with infill," says Cisneros, "and the Monticello project ended up being the wrong fit for KB Home."

Meanwhile, ACV and KB Home have three infill projects ahead of them, two already underway in Laredo, Texas, and one in California's San Fernando Valley.

Published in BIG BUILDER Magazine, July 2002