Holed up in a little rental house in Baton Rouge, La., Rick Horton, D.R. Horton's regional president for Texas, Arkansas, and Oklahoma, and a handful of other company colleagues are the epitome of the term “start-up.” On the ground, trying to aggregate lots in the ravaged Gulf Coast region, the Horton team is living and working in their makeshift regional headquarters as the company officially announced their entry into the market in late December.

Horton joins KB Home as the second publicly traded builder to tap into the rebuilding effort in the region. In December, KB Home formed a joint venture with Baton Rouge–based Shaw Group to enter the Louisiana market.

D.R. Horton representatives admit that increased labor costs from bringing in workers from other markets as well as material shortages may affect profitability, at least in the short term. But despite local officials' inability to identify exactly how badly Katrina damaged the existing housing stock and pinpoint the current shortages, no one disputes the ravenous demand.

While the company confirms to have more than 1,000 lots tied up, a slow release of product is expected because of test estimating and pricing metrics.

Meanwhile, the financial resources desperately needed to jump start efforts in Louisiana may soon be put in play. The state received a $6.2 billion grant from Congress—the maximum it was eligible to receive—announced HUD Secretary Alphonso Jackson and Gulf Coast rebuilding coordinator Donald Powell in late January. For more details on the Gulf Coast market, see Local Intel on page 63.

Learn more about markets featured in this article: Baton Rouge, LA.