Good day, welcome to the Q4 2019 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Also, this event is being recorded. I would now like to turn the conference over to Kimberly Callahan, Senior Vice President of Investor Relations. Please go ahead, ma'am.
Good morning, and thank you for joining Camden's Q4 2019 Earnings Conference Call. Before we begin our prepared remarks, I would like to advise everyone that we will be making forward-looking statements based on our current expectations and beliefs. These statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information about these risks can be found in our filings with the SEC, and we encourage you to review them. Any forward-looking statements made on today's call represent management's current opinions, and the company assumes no obligation to update or supplement these statements because of subsequent events. As a reminder, Camden's complete Q4 2019 earnings release is available in the Investors section of our website at camdenliving.com, and it includes reconciliations to non-GAAP financial measures, which will be discussed on this call.
Joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer, Keith Oden, Executive Vice Chairman, and Alex Jessett, Chief Financial Officer. We will attempt to complete our call within one hour, so we ask that you limit your questions to two, then rejoin the queue if you have additional items to discuss. If we are unable to speak with everyone in the queue today, we'd be happy to respond to additional questions by phone or email after the call concludes. At this time, I'll turn the call over to Ric Campo.
Good morning, welcome to the beginning of the new decade. Our on-hold music today featured five seemingly random songs, but there's always a method to our madness. There's also a contest, but with a twist. We know that our success is driven by our Camden colleagues, so the contest is for them. The five songs were selected by our executives on the call today, Kimberly Callahan, Alex Jessett, Malcolm Stewart, Keith Oden, and me. Each was asked to select their favorite song of the last decade that just ended. The five songs were "Call Me Maybe" by Carly Rae Jepsen, "Humble and Kind" by Tim McGraw, "Uptown Funk" by Bruno Mars, "The Fighter" by Keith Urban and Carrie Underwood, "Can't Stop the Feeling" by Justin Timberlake. The first person to email Kim correctly, matching the executive with the song they selected, will get a shout-out and a prize.
Good luck. In order to move forward into the next decade, I think it's always important to look back and take stock of our accomplishments in the last decade. Here are a few highlights. We improved the quality of our portfolio and created value for our stakeholders through $3 billion in sales of properties with an average age of 23 years, $2.3 billion of acquisitions with an average age of four years, $3 billion of development, creating $1.1 billion of value for stakeholders, $500 million of redevelopment and repositioning of 40,000 of our apartment communities, creating $525 million of the value. We improved our debt to EBITDA from over 8x to just under 4x, with all assets unencumbered and all debt unsecured. We doubled our FFO per share and nearly doubled our dividend.
We built an amazing culture of employee excellence that was included on the Fortune 100 Best Companies to Work For list every single year in the decade, with a number of top 10 finishes. Team Camden ended the decade with a remarkable performance in 2019, exceeding all of our established goals. We are positioned for a strong start to this new decade as we continue to improve the lives of our employees, our customers, and our stakeholders, one experience at a time. The best is yet to come. Don't believe it? Just watch.
Thanks, Ric. Consistent with prior years, I'm going to use my time on today's call to review the market conditions that we expect to see in Camden's markets during 2020. I'll address the markets in the order of best to worst by assigning a letter grade to each one, as well as our view on whether we believe that market is likely to be improving, stable, or declining in the year ahead. Following the market overview, I'll provide additional details on our Q4 operations and our 2020 same property guidance. We anticipate same-property revenue growth this year in the range of 2%-4% in each of our markets, with the exception of Phoenix, which remains our top market and should produce revenue growth in the 5%-6% range.
The weighted average growth rate is 3.2% at the midpoint of our guidance range, and all of our markets received a grade of C+ or higher this year. As I mentioned, our top ranking for 2020 goes to Phoenix, our number one performer in 2019, with a 5.9% revenue growth and a three-year average revenue growth of 4.9%. We give Phoenix an A rating and a stable outlook. Supply and demand metrics for 2020 look strong, with estimates calling for nearly 50,000 new jobs and only 6,000 new apartments coming online this year. Up next are Raleigh and Atlanta, both earning an A-minus rating with stable outlook. In Raleigh, new developments have been coming online steadily, with 5,000 new units delivered last year and another 6,000 expected this year. Job growth has also been strong, and 20,000 new jobs are projected for 2020.
Employment growth was also strong in Atlanta last year, with approximately 70,000 new jobs added, and projections call for 45,000 additional jobs in 2020. Completions remain steady, with 9,000 new apartments delivered last year and 11,000 more scheduled for this year. Denver received an A-minus rating with a declining outlook. Our Denver portfolio has been a strong performer, averaging nearly 5% annual same property revenue growth over the last three years. We expect the market conditions to moderate over the course of 2020, given the somewhat elevated levels of new supply. Over 30,000 new jobs are expected in 2020, with around 9,000 new units scheduled for delivery. Orlando makes our top five cut again this year, receiving a B+ rating with a stable outlook. Job growth has been strong in Orlando over the past few years, and that trend should continue.
However, the strength of the Orlando market has attracted more new development activity, so the level of supply is rising. 35,000 new jobs are expected there in 2020, with 8,000-10,000 completions. We gave Southern California and D.C. Metro each a B+ rating with a declining outlook. Our portfolio in Southern California faces healthy operating conditions with balanced supply and demand metrics. After several years of relative outperformance, we expect some moderation in pricing power this year. Job growth should be around 130,000, with completions of 25,000 expected in 2020. Our D.C. portfolio placed in our top five for revenue growth last year, but elevated levels of supply, coupled with uncertain employment growth forecasts, political risk in an election year, make us a bit more cautious on our outlook for D.C. this year.
Supply should remain steady, with completions of around 13,000 units in 2020. Most job forecasts are predicting a noticeable slowdown in D.C. this year, which could impact our pricing power in that market. In Tampa, conditions are currently a B with an improving outlook. Tampa's new supply should come down slightly to around 4,000 units, with 20,000 new jobs projected, putting the jobs-to-completion ratio at a healthy level of around 5x . Our Tampa portfolio posted 3.1% same property revenue growth last year. We believe their growth rate could accelerate during 2020. Austin and Charlotte both moved up in our rankings this year from B- grades to Bs with stable outlooks. Our 2019 budgets for Austin and Charlotte originally called for revenue growth in the low 2% range.
However, market conditions firmed over the course of the year, resulting in actual revenue growth of over 3% for 2019 in each of those markets. We believe that the revenue growth for 2020 will be in a similar range to last year. New supply remains steady in Austin, with approximately 10,000 new units anticipated this year, but the economy is strong, and the city should add over 30,000 new jobs again this year. Conditions in Charlotte are similar, with 25,000 new jobs projected and 8,000 new units expected for 2020. Conditions in Dallas firmed a bit since last year's report card, and the market earned a B- with a stable outlook again this year. New supply has been persistent in Dallas, with 20,000 completions recorded in both 2018 and 2019, and another 20,000 units projected to deliver this year.
Job growth continues to be a bright spot, with 50,000 to 60,000 new jobs expected. Given the current supply and demand metrics, we think the Dallas market will remain very competitive in 2020. In Southeast Florida, market conditions rate a C+, but with an improving outlook. New supply and job growth have remained steady over the past few years, and 2020 estimates call for over 30,000 new jobs and 9,000 new units. Competition from for-sale and rental condominiums is still an issue in that market, but we expect slightly better operating conditions in 2020 and an improvement from the 1.4% same property revenue growth achieved last year. Houston receives a C+ rating with a stable outlook, as we expect to see limited revenue growth again this year. Estimates for new supply in 2020 vary widely from a low of 9,500 to over 20,000 units coming online this year.
The market is definitely going to see an increase over the roughly 6,000 units delivered in 2019. Annual completions in Houston have ranged anywhere from 5,000 units to 22,000 units per year over the past 20 years, so 2020 supply levels will be moving back towards historical long-term averages. Houston's job growth may also revert to its long-term average of around 45,000 new jobs per year, resulting in limited pricing power and revenue growth for our portfolio this year. Overall, our portfolio rating is a B+ again this year, with most of our markets expected to moderate in revenue growth during 2020. As I mentioned earlier, all of our markets should achieve between 2% and 4% revenue growth this year, with the exception of Phoenix, budgeted slightly higher.
We expect our 2020 total portfolio same property revenue growth to be at 3.2% at the midpoint of our guidance range. A few details on our 2019 operating results. Same property revenue growth was 4.1% for the Q4, and 3.7% for the full year. Our top performers for the quarter were Phoenix at 6.3%, Raleigh at 6%, San Diego Inland Empire at 5.3%, D.C. Metro at 4.8%, and Denver at 4.7%. Rental rate trends for Q4 were as expected, with new leases down slightly, 0.2%, and renewals up 5.1% for a blended rate of 2.2% growth. Our preliminary January results indicate 5.4% growth for renewals and 0.8% for new leases for a blend of 3.1%, which is consistent with January 2019. February and March renewal offers are being sent out on an average increase of over 5%.
Occupancy averaged 96.2% during the Q4, compared to 96.3% last quarter and 95.8% in the Q4 of 2018. January occupancy has averaged 96.2%, compared to 95.9% in January 2019. We're off to a good start this year. Annual net turnover for 2019 was 100 basis points lower than 2018 at 43%. Move-outs to purchase homes were 15.9% for the quarter and 14.6% for the full year, compared to 15.5% for Q4 of 2018 and 14.8% for the full year of 2018. At this point, I'd like to turn the call over to Alex Jessett, Camden's Chief Financial Officer.
Thanks, Keith. Before I move on to our financial results and guidance, a brief update on our recent real estate and capital markets activities. As mentioned on our prior quarter's call, during the Q4, we stabilized our Camden McGowen Station development in Houston, Texas, and we began construction on Camden Atlantic, a 269-unit, $100 million new development in Plantation, Florida. Late in Q4, we acquired Camden Carolinian, a recently constructed 186-home apartment community located in Raleigh, North Carolina, and Camden Highland Village, a 552-home apartment community with an adjacent 2.25-acre development site located in Houston, Texas. The combined purchase price of $222 million for our Q4 community acquisitions was significantly below replacement cost, and we expect these acquisitions to produce a stabilized yield of approximately 5%.
For full year 2019, we completed acquisitions of four communities with 1,380 apartment homes for a total cost of approximately $440 million. We acquired three undeveloped land parcels for a total cost of approximately $37 million. Also, late in Q4, we completed the sale of our Corpus Christi, Texas, portfolio and exit of that market. The assets sold included two wholly owned communities with 632 apartment homes and one joint venture community with 270 apartment homes. Our net proceeds were approximately $75 million. This portfolio had an average age of 22 years with average monthly revenue of $1,300 per door and annual CapEx of approximately $2,000 per door. Using actual CapEx, this disposition was completed at a 5.5% AFFO yield, generating a 12.75% unleveraged IRR over a 20-year hold period.
Based on a broker cap rate, which assumes $350 per door in CapEx and a 3% management fee on trailing 12 months NOI, the cap rate would've been 6.25%. Our time in Corpus definitely put sunshine in our investors' pockets. Subsequent to quarter end, we acquired 4.9 acres of land in Raleigh for approximately $18.2 million for the future development of approximately 355 apartment homes. On the financing side, as previously disclosed, during the Q4, we completed a $300 million, 30-year senior unsecured bond offering with an all-in interest rate of 3.4%. We used the proceeds for the early redemption of our existing $250 million 4.8% bonds due June of 2021, and the prepayment of our $45 million 4.4% secured mortgage due 2045. These transactions locked in 30-year debt at near all-time low yields and extended the average duration of our debt by approximately three years.
After taking into effect these transactions, 100% of our debt is now unsecured, and all of our assets are now unencumbered. In conjunction with the redemption and prepayment, we incurred during the Q4 a one-time charge to FFO of approximately $0.12 per share. Our balance sheet remains strong, with net debt to EBITDA at 3.9x and a total fixed charge coverage ratio at 6.4x . We ended 2019 with only $44 million outstanding on our $900 million unsecured line of credit. Our current line of credit balance, after the January 2020 payment of our Q4 dividend and the payment of property taxes, which are disproportionately due in January, is approximately $180 million. At quarter end, we had $772 million of wholly owned development currently under construction, with only $359 million remaining to fund over the next two years. Moving on to financial results.
Last night, we reported funds from operations for the Q4 of 2019 of $125.6 million, or $1.24 per share, exceeding the midpoint of our prior guidance range by $0.01, primarily from higher same-store net operating income resulting from higher levels of occupancy and other property-level income, and continued lower turnover costs, lower taxes, and general cost control measures. For 2019, we delivered full-year same-store revenue growth of 3.7%, expense growth of 2%, and NOI growth of 4.7%, as compared to our original same-store guidance of 3.3% for revenue, expenses, and NOI. You can refer to page 27 of our Q4 supplemental package for details on the key assumptions driving our 2020 financial outlook.
We expect our 2020 FFO per diluted share to be in the range of $5.30-$5.50, with a midpoint of $5.40 representing a $0.36 per share increase from our 2019 results. After adjusting for the $0.12 non-core prepayment penalty incurred during the Q4 of 2019, the midpoint of our 2020 guidance represents a $0.24 per share core increase, resulting primarily from an approximate $0.19 per share increase in FFO related to the performance of our same-store portfolio. At the midpoint, we are expecting same-store net operating income growth of 3.3%, driven by revenue growth of 3.2% and expense growth of 3%. Each 1% increase in same-store NOI is approximately $0.0575 per share in FFO.
An approximate $0.17 per share net increase in FFO related to operating income from our non-same store properties, resulting primarily from the incremental contribution of our four acquisitions completed in 2019 and our 10 development communities in lease-up during either 2019 and/or 2020, partially offset by the recently completed disposition of our two wholly owned Corpus Christi communities. An approximate $0.04 per share increase in FFO due to an assumed $300 million of pro forma acquisitions spread throughout the second half of the year at an initial yield of 4.5%. This $0.40 cumulative increase in anticipated FFO per share is partially offset by an approximate $0.02 per share decrease in FFO from an assumed $200 million of pro forma dispositions at the end of 2020.
An approximate $0.04 per share decrease in FFO resulting primarily from the combination of lower interest income resulting from lower cash balances and higher corporate depreciation and amortization through the implementation of a new cloud-based accounting and human resources system. Our combined general and administrative, property management, and fee and asset management expenses are effectively flat year-over-year. An approximate $0.07 per share decrease in FFO due to higher net interest expense resulting primarily from actual and projected 2019 and 2020 net acquisition and development activity, partially offset by the 2019 accretive refinancing of debt. At the midpoint, our guidance assumes $300 million of new unsecured debt issued in the H1 of the year. Finally, an approximate $0.03 per share decrease in FFO due to the additional shares outstanding for full year 2020, following our Q1 2019 equity issuance.
At the midpoint of 3% for our expense growth, we are anticipating that most of our expense categories will grow at approximately 3%, with the notable exception of property insurance, which is anticipated to increase at approximately 20% due to the currently unfavorable insurance market. Property insurance only comprises 3% of our total operating expenses. Property taxes represent a third of our total operating expenses and are also projected to increase approximately 3% in 2020, more in line with long-term trends.
The previously discussed savings on Texas property tax rates as a result of the passage of Texas House Bill 3 and Texas Senate Bill 2, which reduced school district tax millage rates by approximately $0.07 in 2019 and an additional $0.06 in 2020, and capped local government's tax revenue increases at 3.5% for cities and counties, and at 2.5% for school districts without voter approval, are offset by property tax increases in other markets, including Washington, D.C., North Carolina, Georgia, and Florida. Page 27 of our supplemental package also details other assumptions, including the plan for $100 million-$300 million of on-balance sheet development starts spread throughout the year. We are finalizing our pilot of Chirp, our mobile access solution, and we'll update you further as we firm up our deployment schedule.
Our 2020 guidance does not assume any incremental FFO impact from this initiative, which we expect to be meaningfully accretive in 2021 and beyond. We expect FFO per share for the Q1 of 2020 to be within the range of $1.29 to $1.33. After excluding the $0.12 per share Q4 2019 prepayment penalty, the midpoint of $1.31 represents a $0.05 per share decrease from the Q4 of 2019, which is primarily the result of an approximate $0.02 per share decrease in sequential same-store net operating income, resulting primarily from the reset of our annual property tax accruals on January 1st of each year and other expense increases, primarily attributable to typical seasonal trends, including the timing of on-site salary increases.
An approximate $0.015 per share decrease in FFO due to a combination of lower interest income resulting from lower cash balances and lower fee and asset management income. An approximate $0.01 per share decrease in FFO due to higher interest expense. An approximate $0.01 per share decrease from our previously disclosed Q4 2019 business interruption insurance recovery, and an approximate $0.01 per share decrease from our wholly owned Corpus Christi dispositions. This $0.065 per share aggregate decrease in FFO is partially offset by an approximate $0.015 per share incremental increase in FFO from our recently completed Houston and Raleigh acquisitions.
At this time, we'll open the call up to questions.
Yeah. Before we start our first question and answer, we let our Camden folks know that we do have a winner to our Camden contest. The first person to correctly identify the songs with the person that submitted them is Laurie Baker, who is our senior benefits administrator here in Houston. She correctly identified "Call Me Maybe" by Carly Rae Jepsen with Kimberly Callahan, "Humble and Kind" by Tim McGraw with Mr. Malcolm Stewart, "Can't Stop the Feeling" by Justin Timberlake with Alex Jessett, "Uptown Funk" by Bruno Mars, Mr. Campo, and shockingly, "The Fighter" by Keith Urban and Carrie Underwood with me. Now we'll turn it over to open it up to questions. Thank you.
We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Our first question will come from Nick Joseph with Citi. Please go ahead.
Thanks. Maybe just starting on Houston, you did 2.1% same-store revenue in 2019. It sounds like you're expecting a similar level of growth this year. Given the increasing supply and the job growth comments that you made, just wondering how you can tie those two and what you're seeing, more from your portfolio specifically.
Yeah, Nick, you're correct. Our original guidance last year for Houston included right at 2.1% growth, that's about where we are this year. One of the challenges on the Houston data is you have estimates from our providers that range all the way from new completions of a low of about 9,500 apartments, to on the high end, almost 20,000. That's a meaningful difference in that spread. We took the average or we're sort of planning our game plan around the average of those two outliers. We have five data providers. The average is about 14,000 to 15,000 apartments. That doesn't seem that unmanageable in an environment where we think we're still going to get 45,000 to 50,000 new jobs, and the estimates on the job growth are much more tightly bunched than the new supply.
My guess is the new supply number, there's still a fair amount of uncertainty as to the timing of deliveries, which seem to always be getting extended further and further out. The second part of that is that our portfolio has a pretty decent mix of urban core and suburban assets, even though a fair amount of the supply is more so this year than in previous years is coming in the suburbs, we still think that our balanced portfolio is well-positioned. Probably going to see a little bit more impact as we did last year in the urban core, just because that's where the current lease-ups are happening. Probably going to get a little bit more impact late in the year from some of the suburban assets.
All in all, we still feel pretty good about our ability to grind out another 2% in a Houston market that's going to continue to be challenged. There's nothing new or even very interesting about Houston being countercyclical to the rest of our portfolio. This is about the seventh or eighth time in 30 years that we've seen results like this, where Houston is definitely just countercyclical. People dig into and try to put a lot of analysis around it, but I don't think you really need to overthink it too much. The reality is, and it's just as stark as this, is that low oil prices are really good for everybody else in the country and not good for Houston. The reverse is also true.
We had a lot of times in the past where Houston was an outlier to the top end of the range. Right now, it's an outlier to the bottom.
Let me just add that I think the interesting thing, and this will apply to all markets, including Houston, but I think it's really supported better in Houston than the other markets maybe. When we talk to our data providers like Ron Witten, for example, I'm going to paraphrase what Ron said on his last client call with us, which we did last week. He said that apartment demand is disproportionally strong versus the underlying economy.
If you just look at the underlying economy and you look at job growth slowing, at supply at all-time highs, you would say, "Well, how can you have revenue growth in apartments when you have supply with the backdrop of job growth falling year-over-year?" The answer is that we just have this really interesting demographic tailwind, and tailwind is the term that Ron uses, and I think it applies to Houston as well. You have continued growth in young adults who have a high propensity to rent apartments, and you have lifestyle folks, non-couple types, that have a higher propensity to lease, and there's more of them today. When you look at propensity to rent for every demographic age group, all the way up into the 60s, those cohorts have grown dramatically in terms of propensity to rent.
When you think about people that were in their 50s before, it's like, well, they're going to buy houses or stay in houses. They're already in houses, they're actually selling houses and renting. The renter population is increasing at a faster rate than we would ever expect given the backdrop of job growth. One of the other really interesting studies that came out was Freddie Mac, their housing summary in 2019. There was some data, it was reported in The Washington Post just recently, that 40% of renters say they will likely never buy a house. That's up from 23% of renters saying that in 2017. 80% of those folks, 80% of the 40%, says that rent fits them better for their lifestyle. They don't want a mortgage. They want flexibility and the optionality of being able to move whenever their lease is up.
I think that continues to drive all the markets, including Houston. Houston, it does have more supply coming in on a relative basis than it did in the last few years, so it's keeping that revenue growth muted. Ultimately, I think the demand side of the equation is definitely far greater than the economy would sort of indicate.
Thanks. That's very helpful. Then maybe just quickly on D.C., you'd mentioned political risk in an election year. What have you seen in D.C., I guess, in election years, and then maybe the following year that's maybe different than other years?
We have done some analysis on election years versus the overall economy in D.C. Interestingly enough, it sort of picks up during the election year, and then it sort of depends on who gets elected, because if you have an incumbent that gets elected, what happens is you don't have a flurry of changes, right? You don't have lobbyists now that need to retool because they have a new administration. If you have a new administration, you tend to have more growth in D.C. during that period because you have the sort of the existing incumbent, lobbyists, and business people sort of having to retool and figure out how to improve their position vis-a-vis the new administration. Generally, it helps the economy in D.C. and the economy nationally leading up to an election.
D.C. actually benefits if there's a change of administration.
Thank you.
Our next question will come from John Kim of BMO Capital Markets. Please go ahead.
Thank you. Regarding Phoenix, it continues to be a strong market as you're forecasting this year as well. When do you think development will pick up in the market to meet that demand, and why hasn't this occurred yet?
In our Phoenix numbers, John, we've got completions picking up slightly in 2020. We were at about 6,800 delivered units last year. Looks like we're projecting about 7,600 units this year. That's about a 10% increase. That's probably still not sufficient to get ahead of the demand. One of the things about Phoenix that's just different than a lot of other markets that we operate in is just the lack of competition that we have from public companies and probably fewer merchant builders that are indigenous to Phoenix than you have in some of the other cities that we build in. You just got a different embedded base, a little bit different competitive profile, and then I'm not aware of any other public companies that have anything currently under construction in Phoenix.
There may be one or two, but it's minimal, if any, as opposed to some of our more well-traveled markets, Washington, D.C., Southern California, the Florida markets, and even Denver and Dallas. Just a different profile. My guess is that if you look at what projected job growth is, again, in Phoenix next year, where the consensus number is somewhere in the 35,000 jobs. If we get 7,500 apartments, that's roughly equilibrium, but I just don't think the capacity is there to ramp up the way some of the other markets can and have historically. Good results like that ultimately will attract competition. I think the good test case of that is Denver, which we operated in with very little outside competition from the public companies for a number of years, and that's obviously changing as well. I'm guessing it'll ramp up.
I agree with Keith in the sense that the pipelines in these markets are pretty much as full as they can get. When you look at the sort of the permit data and what have you, we're at peak times in most of these markets, and the challenge that we have and other developers have is that it's just really hard to make numbers work in lots of markets, including Phoenix. Construction costs continue to go up faster than rental rate increases go, and it's hard to make those numbers work. I think most people would like to ramp up their business, but they really have a hard time ramping up from this high level already.
Okay. My second question is to the JT fan, Alex. What are your views on moving to a core FFO per share guidance number and the pros and cons of reporting NAREIT versus core?
It's interesting because I heard yesterday that probably one of the last hangers-on to not having core FFO has gone over to the dark side. At this point in time, we plan on reporting FFO based upon the NAREIT white paper. I think there's a lot of importance around doing that. If you think about it, the SEC enables NAREIT to have a non-GAAP measure as long as it's consistently applied. We're going to keep with that, and we're going to consistently apply it based upon the white paper, at least for the foreseeable future.
Thank you.
Thanks.
Our next question will come from Shirley Wu of Bank of America. Please go ahead.
Hey, guys. Thanks for taking the question. My first question is actually a follow-up to Nick's question on Houston. I think in your last quarter call, you mentioned that historically, 40%-50% of the demand in household formation was driven by jobs, but that capture rate actually fell last year to 15%, but you were actually seeing a more positive turnaround. Could we get a little bit of extra color in terms of how that has continued to play it out, or if that turnaround has continued to improve?
We have seen a higher capture rate of multifamily versus single-family. I think when we made that comment on the last call, it was interesting because we dug down into this data, it was very unusual for a single-family demand to exceed multifamily demand, in Houston and in any market. Multifamily demand has continued to outstrip single-family demand, from a rental perspective. It was just an aberration. We had our data providers look at it, and part of it was that when the job growth had happened, the people were already here because Houston did have the downturn with the energy business. You had 80,000+ jobs that were lost in the energy business. A lot of those people lived in homes. When the new jobs were created, those people took those jobs.
They were already in either a rent home or an owned home. The demand for multifamily, or the competition for those housing units went to single-family as opposed to multifamily. That has turned around now because we've added more jobs, and we've also seen the in-migration rate for people moving into Houston improve and go up. During the 2014-2016 timeframe, before that, they were coming here because you get a job easy. During that energy downturn, it wasn't as easy. They weren't as plentiful. We didn't have negative job growth, but people sort of heard about that and then didn't move to Houston to take a job. The other thing that was happening at the same time is that we have a historically low unemployment rate in every city.
A young adult can get a job in pretty much any city in America if they want to stay there. There was a little bit of a decline in migration rates because of that as well. I think just migration rates overall in the country are down because of this very tight labor market. If you can get a job in the city you live in, you don't necessarily move out of the other city or move into another city to get the job. That might be a little different for the coastal cities where you still do have outmigration in California and New York and other places for tax reasons and high cost of living reasons and things like that.
We have definitely seen the capture rate for multifamily demand increase this year, and we think it's going to increase next year, and we'll continue to outstrip single family demand versus multifamily.
Got it. That's helpful. My second question has to do with turnover. I think turnover has been continuing to trend down across the board for all your competitors, but it's gone so low to a point where do you think there will be a contained deceleration in turnover, or do you think it's going to kind of taper off or pick back up?
I don't know, Shirley. For the last five years, it's ticked down in our portfolio, and every year, I've kind of mused out loud that we've got to be approaching the limits of what the turnover rate can fall to. It fell again last year. I think a lot of the factors that Ric mentioned about just the demographics, we just have to change our thinking about what turnover rates are likely to be in the future because five years is more than enough to call a trend. I think we're probably in a permanently lower turnover part of the cycle, and this is likely to continue. It's like the falling homeownership rates. It's hard to know where it stops, but at some point, you got to believe it'll reach some logical endpoint or low point, but we haven't seen it yet.
Got it. Thank you.
Our next question will come from Rich Anderson of SMBC. Please go ahead.
Thanks. Good morning. I'm still picturing Ric at a Bruno Mars concert, but, anyway.
We have seen it. We had him here for Super Bowl, and we brought him in Friday night of Super Bowl, and we went to that concert.
Okay. Anyway, the year last year started from a same store NOI, just to look at the NOI line, at 3.3%, and you ended the full year 4.7%. It's precisely the same number, this year, to start, again, NOI, not revenue, at 3.3%. I'm curious, how much is 2020 perhaps going to look like 2019, where you set a reasonable but perhaps beatable same store profile as we go through the year? Do you feel like 2020 is different than 2019, at least in that regard?
Rich, I'm going to answer your question on the revenue side of things, because there are a lot of things that happened on the expense side of property.
Yeah. Fair enough.
I don't know, they're just sort of random walks sometimes. On the revenue side of things, you're right, we went out last year with guidance. Original guidance was 3.3%. Basically, our forecasting and our modeling had occupancy rates pretty much in line with what the prior year had been. 2018, we hit 95.8% occupancy in our portfolio wide, which was the highest occupancy level on same store that we've ever had. If you go back 20 years, our 20-year average for same store occupancy is about 94.6%. All of a sudden, we get this increase in occupancy rate. We hit a peak in what we thought would probably be a peak of 95.8% in 2018. Those were, we felt like, kind of crazy high numbers, and then we sort of repeat, but we thought, maybe we can maintain that. That's what we modeled in 2019.
The 3.3% had an expectation of somewhere around 95.7%, 95.8%. As it turns out, occupancy rate over the course of the year ticked up. We end up averaging 96.1% occupied for the full year of 2019, which explains the lion's share of the difference between a 3.3% revenue growth and a 3.7% revenue growth for the year. There were a few other ins and outs, a few out performances, but the lion's share of that was the increase in the occupancy rate. The question really is that, are you taking a 30-year high occupancy rate and saying, that's going to be repeatable? In our world, it looked like the 96.1% occupancy rate was a little black swan-ish. Naturally, there's a little bit of reluctance to repeat that as far as modeling for next year.
We moderated the occupancy rate a little bit in light of two primary facts. We know that deliveries in Camden's portfolio of new supply are going to be up about 15,000 apartments over last year. That's about a 10% increase. We know we're going to get more new units than we had last year. The flip side of that is we also know that based on the job growth estimates in Camden's portfolio, job growth across our platform is coming down, somewhere in the 100,000 jobs over the course of the year range. You're going to get fewer jobs, you're going to get more supply, and it just feels to us like we're probably going to have a little bit different supply-demand challenge in 2020 than we had last year.
The flip side of that is that if we end up catching lightning in a bottle again, and we average something in the 96.1% range, that's captured by the high end of our revenue range for this year at 3.7%. That's how we ended up settling on our guidance for this year.
Okay. Then could you then, based on what everything you just said there, fewer jobs, more supply, and in your world, decelerating revenue, at least from your standpoint today, yet you're ramping development, I think, $100 million more of projects sequentially versus the Q3 on tap now. How does that reconcile based on what you just said? You're showing some confidence on the development side, and yet you're kind of playing it a little closer to the vest on the operating side.
Well, it is primarily because the development starts are kind of lumpy, right. You put a property under contract. It takes you a while, especially in California, to get permits and what have you. We have been consistent in saying that we will be a $200 million to $300 million a year development start company. If you go back to our peak development, we definitely have throttled it back a bit. On the other hand, when you look at sort of going forward, the $200 million to $300 million, I think is sort of a steady state, kind of not necessarily an overtly bullish view, but just a more moderate view.
When you look at what's happening in the acquisition market, cap rates continue to compress to levels that I can't imagine, that I never thought I could imagine, when people are paying sub-4 cap rates in Dallas and Austin and other markets like that. It really makes our spread between where we can invest our capital, via if we do acquisitions versus the development, that development still gets paid very well, from a premium perspective, compared to acquisitions.
Okay, fair enough. Thanks very much.
You bet.
Our next question will come from Austin Wurschmidt of KeyBanc Capital Markets. Please go ahead.
Thank you, and good morning. The other income per occupied unit accelerated this quarter. I'm interested if that was driven primarily by parking fees and the rollout of the smart home technology initiatives you've discussed? What do you expect other income growth could look like in 2020?
Yeah, absolutely. We didn't really pick up much from the smart access. We do have our parking initiatives, which we're starting to get some traction on, and we're also getting a slightly higher amount of recapture on our utility income, and that's what you're seeing in Q4. If you go into 2020, we're basically assuming that call it non-apartment rental income will be in line with our apartment rental income. You've got other income, which is what we all think about, but we also do have parking revenue, which we're not calling other income, we're calling rental revenue, but when you put that acceleration in there as well, it should all be in line. There should not be a dilutive impact in 2020 from other income.
Got it. Thank you. Appreciate that. Then maybe sticking with you, Alex, as far as the balance sheet, where do you guys expect to finish the year from a leverage perspective and what would get you more comfortable levering up from the current levels of around four times?
Yeah. We've always said that we're comfortable in the 4x to 5x range. We're here today at 3.9x , obviously we've got a little bit of capacity. When we look at our models, we've got ourselves sort of in the mid-4x by the end of the year, obviously we'll keep watching that closely and make sure that we understand what our capital raising alternatives are throughout the year.
Thank you.
Our next question will come from Alexander Goldfarb of Piper Sandler. Please go ahead.
Hey, good morning. Morning down there. Just two questions, but first, on the NAREIT FFO versus core, preference would be NAREIT FFO. It just makes comparability easier, and the core FFO, everyone sort of picks their own metric, makes it tough for comparison.
Hopefully, you got my answer that I agree with you.
That was pretty darn clear. Two questions. First, going back to Nick's question on Houston. I hear you, Keith, that Houston has gone through booms, busts, been a great market over time. Still, since the oil bust, it has lagged. And to Ric's point on cap rates and where things are trading, it would seem like there's an arb here where you can maybe trim some of your Houston exposure and reinvest that in other markets and in the creative spread, whether it's either maybe markets with faster growth, same cap rate but faster growth or maybe development. Can you just talk about whether almost north of 11% of Camden in Houston makes sense, just given how the market has performed? Maybe 8%, I don't know.
I don't know what the number is, but maybe something lower is better, and put that money in markets that are showing more consistent growth.
Well, when I think of growth, I look at it over a long period of time, Alex. The variability from year to year in a portfolio like ours is not that concerning to me. It's more, what's the long-term growth been? If you go back to a 20-year history, Houston has outperformed most of our other markets over that period on just a pure NOI basis. It tends to be a little bit more volatile, for sure. In the context of what we're trying to achieve, which is a total shareholder return, grow NOI over a long period of time, it fits what we're trying to do very well. Now, with regard to the timing and what's your exposure today, where's it going, I think that given the size of the Houston market, somewhere around 11%, 12% makes sense for a long-term target.
Having said that, it behooves us to be opportunistic as to when we put money to work in these markets, not necessarily in tune with the underlying, is the market at the top of the peer group today? It's more, where will it be over the next 10 years? If you think about from a timing standpoint, we just bought an asset in Houston at the end in Q4 that we think was an extraordinary value play. We think we bought that asset at a roughly 30% discount to replacement cost, at a 5% kind of stabilized yield. Those are numbers that you can't get in most of our, certainly, the replacement cost numbers, you can't touch that in any of our other markets. If you're thinking about this as sort of a 10-year horizon, 5- 10 years, that's an incredible play.
To your point of, could you be selling Houston now, lightening up and redeploying the capital? Sure, you could do that. If Houston right now screens as one of our most attractive, and I think in 2020 also will screen as one of our most attractive acquisition opportunities, then it would hurt my brain in a really bad way to be thinking of Houston as a fantastic acquisition market and then disposing assets into that. It's just hard for me to think of it being a great buy market and a great sell market at the same time. Having said that, we clearly have the opportunity when Houston is in a more recovered state and people are trading, not necessarily at discounts to replacement costs, to sell some of our older assets in Houston at an appropriate time, which we don't think is now.
To do that, to bring our exposure back down to the level that we want it to be at and end up with a newer, higher quality portfolio in Houston and just live with the timing aspects that are associated with that.
Okay. That's helpful. Second is on development. You just bought the Raleigh site. You also issued some ATM. Maybe you can talk about where you see new development yields today when you're starting projects. I think your stabilized stuff you said was sort of five-ish, but maybe where you're underwriting development yields today and just understanding how that compares to where you raise capital in the spread.
Well, the development yields that we're targeting today, we're still targeting suburban development deals in the six range and the urban development deals in the low fives. In terms of the spread
I don't think of my spread to issuing capital today. We think of it on a more broad basis. The way we think about our cost of capital is it's our long-term weighted average cost of capital. With a balance sheet that's about a 75% equity, 25% debt spread. When you do a sort of capital asset pricing model analysis of what is Camden's cost of capital, it's around a little slightly higher than 6%. When we look at a development transaction or an acquisition, we look at what our unlevered IRR would be over a seven-year period, on that development. That needs to be higher than our cost of capital, and it needs to be 150 basis points wide of our cost of capital, plus or minus.
Acquisitions can be tighter than that because you don't have the development risk. How we manage our balance sheet in the short-term is sort of being opportunistic with debt rates, being opportunistic with equity issuances to try to keep our balance sheet in the right place, given where we are in the market cycle. I don't think about incremental cost of capital on whether I'm doing a 30-year bond deal or issuing equity on the ATM.
Thank you, Ric.
Our next question is coming from Rob Stevenson of Janney. Please go ahead.
Good morning, guys. Given that California is roughly 12.5% of your NOI across 12 properties with the legislative, regulatory, ballot issues, et cetera, how are you guys thinking about capital deployment there beyond the one project you have under development and potentially the one that's in the shadow pipeline?
We still like our California portfolio in spite of legislative issues, because where our portfolio is in probably some of the less risk markets in terms of rent control. The statewide rent cap really doesn't affect us that much because you're talking about a CPI +5 kind of number, which we're right now not getting. I think I would be a little bit more nervous, especially with the renewed Costa-Hawkins ballot legislation that's likely to be on the ballot in 2020, that would allow cities to get more aggressive. Our portfolios are not in the cities that are more militant when it comes to rent control. Even with all the sort of negative aspects of California with cost of living and all that, it's still a pretty good market to be a multifamily owner in, and I like the exposure there.
Okay. Keith, you were talking before about the turnover being low and can't get much lower, et cetera. There's obviously positive to that from a same store perspective, is that putting a drag on your redevelopment, given the fact that you're getting access to fewer units on an annual basis? How are you guys working around that?
Yeah. At the margins, it matters a little bit, but you're talking about the difference between a 43% and a 44% turnover rate year-over-year between 2018 and 2019. If you had a 5% or 10% delta in any given year, yeah, that would probably affect the repositions. The fact is, as Ric gave the numbers in his opening remarks, we've done almost 40,000 apartments, and so we are down to, I think the active reposition pipeline right now is only about 2,900 apartments. The vast majority of the reposition activity that was available to happen in our portfolio has already happened.
Okay. Thanks, guys.
Our next question will come from Rich Hightower with Evercore. Please go ahead.
Hey, good morning, everybody.
Morning.
Morning.
I guess we've covered a lot of ground on the call so far, just along the topic of very low acquisition cap rates and compressing development yields out there, Ric, you've done a good job in the past of sort of laying out what the competitive landscape looks like, just in the sense of the typical capital stack for a developer or maybe competitors on the acquisition side, hurdle rates and lender requirements. Can you maybe just walk us through what the average math looks like nowadays, and maybe how that compared to where we were a year ago?
Well, a year ago, interest rates were higher, right, than they are today. The capital stack has improved for the acquisition folks because the interest rates are much lower than they were last year at this time. You did have a really interesting situation last year when you had coming out of the 2018 cycle, right? We thought that you would have some pressure on merchant builders and pressure on others to where you'd have the buy side of the equation having the advantage versus the sell side. That just hasn't manifested itself yet, except for maybe a few markets and some unusual situations that we've been able to uncover. Cap rates continue to be very sticky, if not going down, and primarily because the capital is very available.
Even though, if you look at private equity trying to raise funds from pension funds, those numbers are down and getting new funds being raised in that way is definitely down, but there's still a massive amount of capital that's already been raised that's unfunded that needs to find a home. I don't think we lack any capital from the equity or the debt side of the equation. It's actually improved and created more pressure than you would think.
Yeah, just to follow up on that, we were in National Multifamily Housing Council annual meeting in Orlando last week. Just to give you an interesting data point with regard to the amount of capital and the amount of participants, that is brokers and companies that are in the multifamily field and chasing deals right now. Two years ago at the NMHC national meeting, comparable meeting, there were 5,500 credentialed participants. This year, there were 8,000 credentialed participants at the same exact conference. In two years, an additional 2,500 people paid a pretty healthy price to show up and spend three days at the NMHC. I'm inclined to call peak NMHC, and we'll see where it goes from there. The amount of people interested in the space has grown dramatically. The amount of capital, there's no end in sight.
I think there's more of the same in store on transactions.
Yeah, that's helpful color, guys. Any quick commentary maybe on LTVs or lender requirements, debt service coverage, those sorts of things, just to kind of get a sense of that?
Yeah. LTVs are 70%-80%. One thing that's been interesting is, as the banks have sort of tightened their areas, debt funds have expanded dramatically. Debt funds are now over 20% of the multifamily fundings are coming from debt funds, both development and acquisitions. Two years ago, debt funds were maybe 5% of the market. Now they're 20%. It's not just banks or insurance companies, it's these debt funds. There are MEZ programs out there, too. I know developers who are putting in 10% equity, 20% MEZ, and 70% construction loans from debt funds or banks. You can get up to 90% financing with a MEZ piece. The MEZ competition is as aggressive as we've seen in a long time, too. It's definitely much wider than Treasuries. It's 500 basis points, 600 basis points above the 10-year.
You can get a MEZ piece to get you to 90% financing.
Fascinating. I'm confident it's all going to end well. Thanks.
Well, we have a balance sheet that is structured that if it doesn't, we'll be doing very well.
Absolutely. Thanks again.
Our next question will come from Nicholas Yulico of Scotiabank. Please go ahead.
Oh, thanks. Hi, everyone. Just wanted to go back to the leverage topic. Your leverage is clearly the lowest in the sector, and you look at the rest of the multifamily REITs, they tend to have debt-to-EBITDA at 5x or maybe above. I know your proxy does spell out that having leverage in the low 4x range is a performance metric for executive comp. I guess I'm just wondering why you feel the need to have it that low. If this was put in place years ago as a performance metric to get your leverage down, it's come down. Why do you still feel a need to have your leverage so much lower than the peer group?
It's primarily based on sort of where we are in the cycle. We have called the top of the market a couple of times in the last few years and missed that mark, obviously. I would point you back to the Q4 of 2018 when the world was changing dramatically and the 10-year was over 3%, all of a sudden, people started talking about prices falling, and our stock price fell pretty dramatically along with others. We're 10 years into the longest U.S. recovery in the history of since the Great Depression, or maybe even the history of America.
I'm not sure it's the history of America, but I think with the unusual, and maybe it's usual now with low interest rates, and maybe it's going to be low forever, I don't know, but your peak supply, the longest recovery ever, I think you need to be cautious in this area, and our board feels that way. We're going to keep our debt to EBITDA at the low end of the range until there's maybe signs for us that there may be clear sailing, but I can't imagine not having a recession in the next five years. If we do, I want Camden to be positioned to take advantage of what could be interesting opportunities.
The discussion that we just had on the last question, when you think about people who are rushing into the space today paying sub-4 cap rates and leveraging to 90% with MEZ, I'd like to know who they are in the future when we have a recession.
Yeah, that's a fair point, Ric. I guess I'm just wondering, though, why it needs to be as low as 4x , right? Which is clearly a performance metric that you guys hit max payout on that if you keep it at four. Why is that the magic number? Does at some point the company revisit this and think about, hey, maybe now is the time to be doing more development, we can do that, and we don't need to keep our leverage that low?
Nick, just to point on the performance metric, the metric is 4%-5%, which is the range for debt to EBITDA. It mirrors our guidance to the street. I think in Alex's answer earlier in his commentary, if we have a bond transaction model, then if we do our book of business as we currently have it laid out with acquisitions, development funding, et cetera, we'll end the year at 4.5%. That's right in the middle of the range that we've given guidance to, not only the performance metric, but also guidance to the street. I think by the end of the year, all things being equal, we should be somewhere near the middle of the range of the 4x-5x , which we think is still appropriate given all of Ric's commentary.
All right. Thanks, everyone.
Our next question will come from Drew Babin with Baird. Please go ahead.
Hey, good morning.
Morning.
I know it's been a long call, so just one for me. A follow-up on Houston supply. It does look based on the data I'm looking at, like the number of deliveries or the quantity of deliveries picks up kind of as the year goes on this year. Given that there's visibility on the first part of 2020, do you maybe worry a little bit more about kind of the H2 of the year and how things might shape up for 2021? Do you look at it as supply kind of naturally spreading itself out a little more kind of as things are delayed? Just curious how you're thinking about that.
Well, the way we look at Houston, you have to remember, Houston is a vast market, 650 square miles, right? One of the things that's really interesting about the Houston supply, and this kind of just shows you what lenders and merchant builders have done. They are moving out of the core, the urban core, and moving into the suburbs pretty dramatically. To give you an example, in Katy, there are 3,000 units that'll come online this year in Katy. We have two joint venture properties in Katy and nothing else. There's 3,000 units coming online in The Woodlands. We have two joint venture properties that are up towards The Woodlands, but are not Woodlands proper. That's 6,000 units that are coming online in Houston that are really not competitive with our sub-markets.
The way we look at Houston, number one, I think that it's always clearly the back half of the year is going to be more pressure than the front half of the year. Just always is, especially with the ramp-up of the development starting sort of beginning of last year. They'll bring products on, and we also have clearly a continued slippage of ones that were supposed to be in the first and second quarter that go into Q3 and Q4. With that said, H2 of the year will probably be a little more difficult than H1 . Keep in mind that the key is where is that product and how does it affect our product in the suburbs? We think that we're reasonably insulated from a lot of the supply because Houston's so big.
Okay. From a timing perspective, you kind of look at it as maybe more of a general overhang that'll persist for a certain period of time rather than anything potentially lumpy, given how spread out the market is.
Yes.
Okay. That's all for me. Thank you.
Our next question will come from Neil Malkin of Capital One Securities. Please go ahead.
Hey, guys. Hopefully, we can keep this call going till like, 1:00 East Coast time.
Why not?
Yeah.
Feel like I'm in the Senate.
Oh, boy. I'd rather be here. Anyways, permits have picked back up in recent months. You talk about debt funds kind of filling the void there. I'm just wondering if you think we've kind of reached a structural peak in terms of supply, just given the types of delays and labor constraints such that even though permits might be picking up, we're continuing to see so many delays. Is this kind of the most that we can physically produce, and we shouldn't really expect anything severely acute the rest of the cycle?
If you look at our data providers and you look out to 2020 completions versus 2019, both in Camden's markets and nationally, completions are expected to be up about 10% year-over-year. These are not, obviously, they have less certainty to them. In the 2021 numbers, there's a slight uptick from that. Not major, but the answer to your question is, I don't know if it's a structural capacity, but it could very well be that it's a financial wherewithal and call it developer capacity. You do reach a point where even if money is certainly relatively plentiful, there are aggregate limits on how much they're willing to play with any particular sponsor. I don't know if it's structural in terms of the construction providers.
We clearly have had getting the existing book of business completed for everybody in every one of our markets has been challenging for the last five years, I just don't know how that gets any better in an environment where you have a constraint on skilled labor, but more projected completions. I just think it gets worse.
Yeah. Okay. That makes sense. The last one is, in your operating expense guidance, do you bake in any successful real estate tax appeals?
We actually do. If you look at 2019, we got refunds in of about $2.9 million. In 2020, we are anticipating $2.6 million of refunds. Pretty close to what we've received in 2019.
Thanks, guys.
Our next question will come from John Pawlowski of Green Street Advisors. Please go ahead.
Hey, thanks. Just one from me. I want to go back to your cautious comments on D.C. for 2020. Are you seeing anything on the ground today in terms of foot traffic, concession trends that suggests that the third-party forecast for slowing job growth could come to fruition? Because the declining outlook from 2019's level, from the mid 4% revenue growth, down from the 4.8% you did this quarter, seems to be like a pretty sharp pivot in terms of the trajectory of pricing power. Is it just caution versus the third-party forecast, or are you seeing it happen today?
There's two things on the forecast. Our primary provider is Ron Witten, as everybody knows. He's got 2020 employment growth at 13,000, which is at the low end of everybody else's range. We've challenged that number because it doesn't seem consistent with what we're seeing. If you look at the average of the data providers that we have, it includes CBRE, RealPage, and Marcus & Millichap, it's closer to 25,000. It certainly seems like the average probably makes more sense when you look at the numbers. If it's closer to the lower end of that range, it's going to be a challenging market because we know we're going to get 11,000-12,000 additional apartments in D.C. Metro.
Again, the D.C. Metro story is always a little bit tricky because you got to think about where the footprint is, and our footprint is different than most of our competitors, and it includes Northern Virginia and Maryland and some of the suburban assets that we continue to just have incredibly strong results from. The only place we do have challenges is where there's a sub-market where we've got immediate construction or lease-up going on, and we get impacted like anyone else does. I think our game plan next year reflects a fair amount of realism in terms of what we expect to see. Obviously, 2019 was an unexpectedly good year for us in the D.C. market, and I'd love to see it repeat.
I'm just not sure that based on the data, that it makes much sense to be particularly more bullish than we are in our forecast.
Sure. Understood. On the ground today, the team has not really seen any recent changes in terms of renewal pricing or concessions or foot traffic?
No. In fact, in our market update call the other day, I would describe them as very optimistic in terms of their game plan for 2020. We ask everybody to give us their, on a scale of 1- 10, how achievable is this, and they were in the 9- 10 range. They feel very comfortable with their game plan. No change, no concerns based on current conditions in D.C.
Okay, great. Thank you.
You bet.
Our next question will come from Haendel St. Juste of Mizuho. Please go ahead.
Hey, good morning out there.
Hey.
A couple of quick ones from me. First, I guess I'm curious on any updated perspectives on rent control in some of your Sun Belt markets for this year. Per National Multihousing, it looks like Florida introduced measures last year that would remove the state preemption of rent control, and those bills are poised for consideration here. Then there's also been some chatter in Atlanta, while Georgia too has a state-level preemption against rent control, it looks like the city council there recently introduced a resolution encouraging the state to allow cities in that state to pass rent control legislation.
Yeah. Haendel, there's talk and there's chatter and there's activism around the idea of some form of rent control in almost every state that we operate in. The question is, how far advanced is it? What's the traction? The market that I would say is more on my radar screen as far as actionable legislation that could impact us would be Denver. There's been a lot of conversations, there's been a lot of local initiatives around the idea of rent control. I'm not overly concerned about the other ones you meant, Florida, for example. It's possible that there might be something introduced. It's hard for me to get my head wrapped around a statewide initiative in the state of Florida around rent control at this point. It's something you got to be aware of. I mean, the ground is shifting on this, for sure.
Having conversations in states that five years ago, you probably would have said, "That's not ever going to be a conversation in the state of Florida or Atlanta or Texas." It's just something you got to be really aware of. Ultimately, how many of them progress to the point where you're actually in a firefight like you are in California over specific initiatives, that remains to be seen.
Yeah, I just don't see it happen in those markets. As Keith pointed out, in Houston, for example, there has been discussion of rent control here because housing prices or apartment prices have gone up and affordable housing is really tough here. The interesting thing is they'll talk about it, and then when you get people in a room that understand the politics of the area, they know it's never going to happen. I think that there's a lot of talking, but you don't have the same kind of political, polarized, sort of hardcore blue folks like you do in California, New York, and some of these other markets. When you get to the ultimate, these are red states and pretty much going to be that way for a long time, which would preempt a lot of state stuff.
Got it. Appreciate that. Can I get you to talk a little bit more about the Chirp mobile servicing platform that you're planning to roll out here? How should we be thinking about that incremental cost? What are the key features or focus areas? Then maybe can you talk broadly about the expected benefits and put maybe some broad numbers around potential expense savings or NOI margin benefit. You mentioned no accretion this year. Curious what that could look like maybe in two or three years' time.
Absolutely. What it is it's a mobile access solution that would enable both the resident and vendors to, using their smartphone, to enter the premises and also enter the locks of the individual communities. We are in the middle of our pilot. The pilot is going very well. We will have more information for you as we get a real deployment schedule. I will tell you that we have done a lot of studies around this, when you really look at what our consumers are willing to pay for, there are a lot of smart home technologies out there that are getting a lot of press. The reality is what our consumers are most interested in is access. That is what we are primarily focusing on.
In addition to the fact that we know that our residents are willing to pay for this amenity, and it truly is an amenity, we believe that there's going to be efficiencies on the operating side. If you think about the amount of time that we spend either re-keying locks, letting vendors in, dealing with lockouts, et cetera, there should be some fairly meaningful savings on the expense side. Once again, we're firming all of this up. As I said, 2020 is really our year for a rollout and a deployment, and our pledge to you guys is that we will update you quarterly as we know more.
All right. Fair enough. Thank you.
Our next question will come from Hardik Goel of Zelman & Associates. Please go ahead.
Hey, guys. Thanks for taking my question. I'll keep it quick. Just wanted to dig into the other income effects, specifically in Q4, and just where different things are accounted for. I think Alex mentioned briefly parking is, you guys account for it a little differently than traditional other income. If you could share the breakdown of where parking fees, maybe the cable bundles, and all these other things are accounted for, that would be great.
If you are on page seven of our supplemental package, you will notice that we have property revenues as one line item. If you go down to our footnote, which is footnote A, we try to break out rental revenue versus other revenue that is tied with a contractual obligation. If you sort of think about rental revenue, we deem parking revenue, because you are effectively renting parking space to be rental revenue. We certainly think about our tech package, valet waste, et cetera. That would fall into the other income category.
Got it. At the market level, I guess for the same thing, if I'm looking at the rental rate sequentially, it's up roughly 70 basis points, but the revenue per home is up 40. Is that just a drag from other income? How do I interpret that at the market level?
Well, I think what I would look at is if I go to Q4 comparison, I would say that average monthly rental rates were up 3.4%, yet revenue per occupied home was up 3.7%. If you look at the monthly rental rates of up 3.4%, then you add your occupancy of 0.4%, that gets you to 3.8%, which is pretty much in line with the 3.7%. I would tell you there's really not a drag there from any of our additional other income categories.
Got it. Thanks.
You're welcome.
This concludes our question and answer session. I would like to turn the conference back over to Ric Campo, CEO, for any closing remarks. Please go ahead, sir.
We appreciate you being on the call and supporting Camden for last decade, and look forward to being with you for the next decade. Take care and thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.