The Texas Residential Construction Commission is investigating KB Home for possible false advertising due to lingering complaints from San Antonio-area homeowners who say the builder misled them.

The complaints center on the adjacent Sundance Ridge and Sundance Trails communities, where some homeowners say they were promised an upscale community and do not want KB to bring lower-priced homes into their neighborhoods.

The residents have been lobbying county commissioners and state legislators, signing petitions and hammering “for sale by owner” signs into their front lawns.

“I can confirm that based on complaints that we had, we are looking into some allegations that include false advertising,” said TRCC spokesman Patrick Fortner. But Fortner said the agency couldn’t get more specific because it’s an ongoing investigation.

KB Home says it has been working to listen to and respond to individual homeowners and the community. A few months ago, after many residents objected to plans to build smaller homes with siding and one-car garages, the builder reversed some of the cutbacks. All homes in the Sundance communities now will have masonry and at least two-car garages.

“We have fully responded to any homeowner complaints brought to us by the TRCC, but we are not aware of any other open issues,” KB Home spokeswoman Cathy Teague said.

The Sundance communities, located off Potranco Road outside Loop 1604, have about 400 lots combined. The adjacent neighborhoods share a community center, pool, fitness center, playground and other amenities such as walking trails.

The biggest issue is that homeowners worry that lower-priced homes will bring down their property values and ruin the neighborhood’s aesthetics. Already, some said their tax appraisals have dropped.

Many of the current owners say they purchased homes with two- to three-car garages with prices from the $130,000s into the $200,000s.

Prices on the various floor plans now start at $110,000 and go up to $186,000.

“The real problem is this was supposed to be an upscale community,” resident Maria Suarez said. “Now it’s being marketed as a starter community.”

Over the weekend, a group of residents met with the chief of staff for state Sen. Carlos Uresti, D-San Antonio, to outline their complaints.

Sundance Ridge and Sundance Trails opened in the summer of 2006 at the height of the real estate market. Now, builders across the San Antonio market are scaling back their neighborhood plans to cope with the slower economy.