A U.S. homebuilding company has announced plans to move its headquarters out of California, in another blow to the state.
Landsea Homes, a Newport Beach, California, construction firm, which designs and builds master-planned communities and houses across the country, announced on Mar. 8 that it would move its corporate headquarters to Dallas, Texas.
The firm has developed homes and communities in Boston, Massachussets, New York, New Jersey, Arizona, Florida, Texas, and throughout its home state of California in Silicon Valley, Los Angeles, and Orange County.
“As a national publicly traded homebuilder with communities from California to Florida, this is a strategic move in the best interests of our shareholders,” said John Ho, director and CEO of Landsea Homes, in a press release.
“In addition to our overall coast-to-coast growth strategy, we are very focused on growing our homebuilding footprint in Texas, and this move demonstrates our strong commitment to the state.”
Landsea’s new headquarters will be located on the 10th floor at 1717 E. McKinney Street in Dallas, and will total 7,716 square feet.
‘Blue’ States Lose Out to ‘Red’ State in Business Exodus
The home-development company joined a list of firms fleeing “blue” states to the better business environment in Texas, including Exxon, Mobil, AT&T, Hewlett Packard, Oracle, and Charles Schwab.
Tesla, Chevron, Hewlett Packard, NortonLifeLock, and Kaiser Aluminum were formerly headquartered in California, but have left the Democrat-run state in recent years.
Tesla, which moved to Texas from the Bay Area in 2021, saved its CEO Elon Musk $2.5 billion in capital gains taxes.
Meanwhile, Ho called Landsea’s out of state move beneficial to the company in many ways.
“We are relocating our corporate headquarters to Dallas, Texas, from Southern California, a move that should provide cost savings over time,” Ho told investors on a call on Mar. 7.
Texas only made up just 3 percent of Landsea’s revenue in 2022, but the company wants to build up its presence in the booming Lone Star State—but that will take time, he said.
The company currently owns or controls 1,087 lots, primarily in the Austin and San Antonio housing markets.
“Texas will come on toward the end of the year, but generally it will be around the same split [at year-end],” Ho explained.
California delivered 35 percent of the company’s homebuilding revenue in 2022, while Florida made up another 33 percent and Arizona made up 22 percent.
Landsea Homes earned a total of more than $1.4 billion in revenue in 2022 and pretax income of $101 million, with earnings at $1.70 per diluted share, reported the CEO.
Although the construction firm closed 2,370 homes last year, a 45 percent increase over 2021, major challenges arose in the second half of 2022 due to a decline in the buyers sector.
“While 2022 was a record year in terms of profitability, it was also a year in which the demand environment became more challenging due to a rapid rise in mortgage rates and a subsequent decline in homebuyer confidence,” Ho said.
“This change in market dynamics caused buyers who were in the market for a new home to become more cautious and prompted buyers in our backlog to cancel their purchase contracts. As a result, our net new order activity in the third and fourth quarters dropped off significantly as compared to the prior year.”
Progressive Policies Fail Taxpayers
Progressive policies have caused California to lose a seat in the U.S. House of Representatives for the first time in its history.
Millions of middle-class Californians and companies said they were fed up with high taxes, draconian pandemic mandates, public corruption, rising crime, poor schools, and crumbling infrastructure, culminating in little return for taxpayers.
So-called ‘woke’ policies, the high cost of living, and political pressure from the left have not made things better in California, even for those who are not conservative.
The pandemic and and other factors have caused residential neighborhoods in once trendy areas to empty out, while business districts have been gutted over the past three years.
Despite accumulating a surplus of $75 billion in 2022, the state government announced by the end of the year a shortfall of $25 billion.
Texas and Florida are the two states that have gained the most from the outward surge of residents and congressional seats from “blue” states such as New York, Illinois, and California.
U-Haul’s annual report for 2022 detailed a flood of residents of Illinois and California to the Lone Star State and the Sunshine State, which has accelerated since the pandemic.
The report indicated that New York, Massachusetts, Michigan, Illinois, and California were among the worst-performing states for growth last year.