KB Home, a homebuilding giant with more than six decades of roots in Los Angeles, has announced it will relocate its corporate headquarters to Tempe, Arizona, in spring 2027. The company cited Arizona’s friendlier business environment as the key reason for the move, while stating it will keep six operating divisions active in California.
KB Home is far from the first California business to announce a location change. Oracle, Tesla, Chevron, Charles Schwab, and Hewlett-Packard Enterprise have all made similar moves in recent years. According to the Public Policy Institute of California, the state lost nearly 800 corporate headquarters between 2011 and 2021, and a Houston Chronicle report counted more than 1,800 companies that have left California over the past decade.
The reasons businesses give for leaving point to the same pressures, including California’s top income tax rate, which now sits at 14.4%, housing costs, and municipal fees. A proposed 5% wealth tax could appear on the state ballot later this year, which critics warn could push even more companies out.
California officials have defended the state’s economic record, pointing to a GDP that grew to $4.25 trillion last year, the largest of any state. But not everyone finds that number convincing.
The Cardiff Connection
Cardiff’s Founder, William Stern, has a sharply different read on what California’s headline economic numbers actually mean for working businesses. According to Stern, the state’s impressive GDP figures are distorted by the outsized influence of the technology sector, reflecting investment flows and corporate valuations at the top of the economy rather than real wage or job growth for everyday workers.
In his view, businesses that can afford to leave California do so. Still, the small contractors and local operators who can’t relocate are left behind to absorb rising costs, tighter regulations, and shrinking margins until they simply close. He sees little reason to expect policy relief anytime soon, predicting that meaningful change won’t come until the state faces a true budget crisis.
That perspective speaks directly to the small businesses Cardiff serves. While the corporate relocation headlines focus on Fortune 500 companies, the more urgent and less visible story is what happens to the local operators left in a high-cost environment with no easy exit. Cardiff works with businesses, helping them access capital to stay competitive and weather the pressures of operating in difficult conditions.
