L.A.’s trailblazing home builder is the latest to leave California

One of Los Angeles’ most influential home builders, KB Home, is relocating its headquarters out of state, becoming the latest high-profile firm to do so.

The company, which has been based in Los Angeles since 1963 and helped build its sprawling suburbs, is moving its main office to the Phoenix metropolitan area by spring 2027, in part to reduce costs and place its employees in a more affordable housing market.

KB Home touted Arizona’s business-friendly environment as a reason for the move, but said it still plans to maintain six operating divisions in California.

The move to Arizona will help accelerate KB Home’s growth and streamline operations, Robert McGibney, president and chief executive of KB Home, said in a news release last week.

“This move brings our teams together in a more collaborative environment, and Phoenix is the right place to do it,” McGibney said.

The company has deep ties to California, with more than 100 projects and tens of thousands of homes across the state. KB Home has opened nine housing communities in Southern California in the last six months and plans to open 10 more by the end of 2026.

The company’s shares, which have been falling this year amid concern about the property market, have climbed around 1% since it made the announcement late Wednesday. They closed little changed Tuesday at $51.93.

KB Home got its start in Detroit in the 1950s and briefly shifted operations to Arizona before settling in California by 1963. The company, which gets its name from the last names of its founders, Donald Bruce Kaufman and Eli Broad, rode the boom and helped shape the growth of Southern California.

KB Home quickly emerged as one of the top builders of affordable homes in the country, starting in the post-World War II boom, when growing families across the country were leaving crowded cities for the promise of rapidly emerging suburban neighborhoods such as the San Fernando Valley in Los Angeles.

With first-time buyers as their intended customers, the company’s innovations included lowering prices by building homes on slabs, instead of digging costly basements. It pioneered providing financing for buyers and 10-year limited warranties on their homes.

Broad became one of LA.’s most influential civic leaders, using his multibillion-dollar fortune, political clout and forceful personality to spur advancements in the public sphere, particularly in the arts.

He helped guide the redevelopment of Bunker Hill in downtown Los Angeles after it was cleared for urban renewal, and it was there that he built perhaps his greatest legacy: his namesake Broad Museum, which houses the extensive private contemporary art collection that he and his wife, Edythe, accumulated.

As a downtown booster, he and then-Mayor Richard Riordan were widely credited with getting the Walt Disney Concert Hall completed in 2003, raising more than $200 million to get the stalled Frank Gehry-designed project back on track.

In the late 1970s, he became the founding chairman of the Museum of Contemporary Art, and he bailed it out of a financial scandal three decades later with a $30-million grant.

KB Home’s California exit is the latest in a corporate exodus from the state. Some companies have relocated to avoid high taxes and strict regulations that complicate doing business in the state. The move has often been done to cut costs and improve profitability.

Two other California-bred companies connected to real estate, Realtor.com and Public Storage, announced similar moves to Texas in February.

Realtor.com, a real estate services company, was drawn to the Lone Star State for its unparalleled housing growth and affordable living, according to a news release. Public Storage, the largest self-storage business in the country, announced a similar move, citing interest in Texas’ growing talent and innovation.

The Golden State has remained the fourth-largest economy in the world, even as steep taxes and stringent environmental regulations push some firms to leave. Powerful companies across business sectors have expressed discontent with the state’s business environment.

Tesla and financial services firm Charles Schwab left the San Francisco Bay Area in 2021. Elon Musk’s SpaceX and Xexited the state in 2024, along with Chevron, the oil giant that was started in California.

California has also lost residents, who are fleeing high housing costs for more affordable states such as Arizona, Nevada, Oregon, Washington and Texas.

California has led the nation in net out-migration for six consecutive years, according to U-Haul data. Los Angeles County lost 54,000 residents from 2024 to 2025, partially due to continued out-migration to other states.

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