Large corporations moving their headquarters out of California seems to be a continuing trend. The US construction giant, KB Home, has just announced that it will relocate its headquarters from California to Arizona in the spring of 2027.
KB Home is one of the largest and most renowned homebuilders in the United States, with operations in 49 markets across nine states, and a market value exceeding $3.2 billion.
For the past several decades, KB Home’s headquarters has been located in Los Angeles, making it a significant player in Southern California’s business landscape. However, starting from early next year, the team will move out of their headquarters building in the Los Angeles area to a new headquarters in Tempe, Arizona, within the Phoenix metropolitan area.
In a statement released last Wednesday (April 8th), KB Home emphasized the economic benefits of this relocation, citing the Phoenix metropolitan area as providing a business-friendly environment that can streamline operations and reduce costs for the company.
“This strategic move will enable KB Home to operate more efficiently and provide strong support for the company’s next phase of growth,” said Robert McGibney, President and CEO of KB Home, in the statement.
Despite the relocation, the company has committed to maintaining a significant presence in California through its six major operating divisions, with over 100 community projects still ongoing.
In recent years, there has been a wave of relocations from the “Golden State”, with hundreds of companies and tens of thousands of people moving out of California to other states. KB Home is not the first major corporation this year to announce a headquarters relocation.
In late February, the world’s largest self-storage company, Public Storage, announced the relocation of its corporate headquarters from Glendale, California to Frisco, Texas, ending its over 50-year history in California. The company is valued at over $53 billion.
Almost simultaneously, Yamaha Motor Corporation U.S.A., which has operated in California for 47 years, announced the relocation of its US headquarters to Georgia. The main reason for leaving California is to increase efficiency and profitability.
Additionally, major companies such as Chevron, Realtor.com, Tesla, SpaceX, X Social, Oracle, Charles Schwab, and HP have also moved their headquarters out of California in recent years.
The Hoover Institution has pointed out in previous studies that California’s high corporate taxes, stringent regulatory environment, and high operating costs are accelerating the pace of these companies’ departures.
In addition to large corporations, proposals targeting the wealthy in California have also been receiving attention. The latest billionaire to leave California is Facebook and Meta co-founder Mark Elliot Zuckerberg.
The Hoover Institution has noted that California is considering imposing a one-time 5% net wealth tax on billionaires, leading several billionaires to leave the state and causing a potential loss of around $25 billion. The departure of billionaires also means California will entirely lose the state income tax revenue they should have paid in the future.
The “California Billionaire Tax Act” proposal is currently in the signature collection phase. If it garners enough valid voter signatures by the end of June deadline, it will proceed to a statewide referendum in the November election.