The 10:35 A.M. session at Citi's 2023 Global Property CEO Conference. I'm Eric Wolfe from Citi Research. We are pleased to have with us Dallas Tanner, CEO of Invitation Homes. This session is for Citi clients only. If media or other individuals are on the line, please disconnect now. Disclosures are available on the webcast and at the AV desk. As a reminder, the questions I will ask during the session will not reflect or imply user opinions for myself or Citi Research, and are being asked for informational purposes only. For those in the room or on the webcast, you can sign on to liveqa.com and enter code Citi2023 to submit any questions, if you do not want to raise your hand. Dallas Tanner, I'll turn it over to you to introduce your company, the management team, and give some brief opening remarks.
Thank you.
Hi, guys. It's good to be with everyone. Thanks for having us. Nick, you guys run a great conference, and we appreciate being in front of everybody. First, to my left, I have my two CFOs. I have my outgoing CFO in Ernie Freedman, who we all know and love, and our incoming CFO in John Olsen, who as many of you know, and so we have both of them in case one of them doesn't get the question right, the other guy will jump in. Then we have Charles Young, our President, now President and COO, to my right. We appreciate having everybody with us. If it's okay, I'd like to just start with a few opening comments, Nick. First and foremost, you know, business is really good. It's healthy.
Occupancy is up 40 bps from December to February. We're sitting at 97.8%. Our February new renewal and blended rate growth of 5.7%, 7.8%, blending to a 7.2%. It's extremely healthy for this time of the year. If you go back to, like, our 2019 numbers, you know, those numbers are typically in the low single digits. The fundamentals around demand just still continue to impress and feel very healthy. Our loss to lease increase ±4% by the end of February. Second point is in really our longer term fundamentals around the business. Lack of housing in this country, as many of you know, will continue to put positive pressure on demand. We've had basically a decade of underbuilding.
We have uncertainty in the market with development costs, and cost of capital, cost of goods sold, all much higher than they were four or five years ago. We think this is going to continue to, unfortunately, accentuate the problems with the lack of supply in the country. In those with scale and density in the right markets, it should be favorable from a demand perspective. The aging of the millennial cohort, which we've talked to many of you about over time. You know, the average age of our residents is about 39 years old, and has a combined household income of about $135,000. This is lending itself to a stickier duration of stay. Many of our markets now are pushing well beyond three years in average length of stay.
In our West Coast and kind of earliest markets where our business was established, we're starting to see that push into a fourth year, manifesting itself in much lower turnover over the last couple of years. You know, lastly, on that point, the growing affordability gap. As you look at the cost of ownership with rising mortgage rates, where things are going, in terms of decisions around homeownership, has created, you know, additional dislocation in the value proposition of leasing a single-family home for rent. Today, those averages in our markets are somewhere around $900, in that it is $900 more expensive to own versus to rent an Invitation Homes product.
Third point I wanna make as we think about this year, and we've talked about this internally a great deal, is we have to control the controllables, and yet maintain an opportunistic approach to growth as it comes in front of us. Our acquisition activity, primarily as we laid out in our guidance call, is generally mostly new product in that guidance that we have scheduled deliveries on in 2023, of which we've put in contract within the last few years. Balance sheet's in a terrific spot, courtesy of Ernie and John's work over really the last five to seven years. We have no maturities due until 2026. Our weighted average cost of debt is somewhere in the mid threes. On a Net Debt EBITDA, we're inside of six turns.
We're in a really, really healthy spot there. We're looking to outperform really in the near term around revenue and managing the expenses and some of the inflationary and transitory pressures most people in housing or construction are facing. Nick, with that, I think that's the kickoff. We'll open it up for questions.
Great. We've been starting out each session, asking the same question, which is, what are the top three reasons to buy your stock today?
One, it's really cheap. two, the residential fundamentals are about as good as any sector in the country right now, based on that kinda long dialogue I just laid out. Things feel really, really good in terms of the macros of if you wanna invest in housing or you have an ability to invest in housing, it's one of the more sure bets out there, in my opinion. Lastly, I think we proved this during the COVID downturn, and I think we'll prove it now. I think SFR is much more resilient than other residential types. Duration of stay with the customer, the ability to bring in ancillary services and help drive down costs in other categories of their life is just something that we're just barely hitting the tip of the spear on.
Our ancillary business this year will be close to $50 million, whereas, you know, three years ago, it was next to nothing. We see a lot of runway there as we continue to find ways to enhance the customer experience and drive additional value beyond your lease.
In terms of operations, you gave the February update. It seems like things are still pretty strong, went from 7.4% - 7.2%. Can you know, based on what you're seeing today and signing leases today and renewals, new leases, where do you think that's going in March and April? If maybe you can help us think about how the peak leasing season should end up.
Yeah. This is Charles here. You know, look, we like the position. As Dallas said, 97.8% on occupancy gives us a really healthy kind of strength position in terms of capturing the market rate that's out there. We had acceleration from January to February on the newly side from 4.9% - 5.7%. We're seeing further acceleration. It's early in March, we're seeing further acceleration, as we would expect, given the kind of seasonal curve. Post Super Bowl, this is when demand starts to pick up. When you look at all our metrics across all the markets, good demand, good, top of the funnel, pulling through. That's looking good, and we're seeing good, steady growth on the renewal side.
Again, we're pricing those 90 days in advance, you get a little bit of a timing issue. For March, we went out at 8%. You know, after that, going into April, we're in the 7%. We're still at a really healthy rate given Q1 historically. As Dallas said, if you go back pre-COVID terms, these are just phenomenal numbers, which would normally be in the low single digits. We're pushing towards the 7% and seem to be maintaining. We'll see what the acceleration will be going into the summer, but we're optimistic given our occupancy and execution.
Gotcha.
What would cause you to back off from that sort of 8% renewal level that you're seeing? Just a higher rate of turnover, less acceptance, and sort of on the flip side, you know, what would cause you to get a little bit more concerned? I mean, it sounds like things on the ground today are strong, but what would change your view?
You know, really, as on all of our rents, we're just setting that market. Right now, there, as Dallas said, there's an undersupply of our product that's being built. It's been that way for a decade now. Given the affordability gap, we're just seeing good demand, and with there being a lack of supply, and we have our great locations infill that others can't compete with, we're seeing good stuff. I think, you know, right now it's all around watching those dials and metrics, and things are going in the right direction in terms of that demand and our execution and being able to capture it.
Gotcha.
Your loss to lease, you said, went to 4% from 1%-2%. Can we take from that that market rents are already up, call it 2%-3% so far this year?
That's generally right. I mean, you could see it in terms of our acceleration from January to February. You know, we normally would be a little flat month to month. That acceleration is healthy when you look back historically. The acceleration going to March is what we would normally expect. That's continuing to happen. Yeah, I think what you're seeing is that newly signed demand, you know, what's happening with the occupancy that we're starting to see some that market rate on the newly signed start to capture in the numbers. We'll see if we can kind of capture as much as we can going forward.
I know it's early in the year, but any markets that are standing out in terms of sort of being stronger or weaker than initially viewed?
Yeah. Florida continues to be strength for us. South Florida here specifically has been really strong, demographic changes and all of that. Phoenix slowed down a little bit second half of the year, but it's starting to bounce back really quickly, which is, you know, what we expect, and, you know, that's that's been healthy. You know, all our other markets is kind of across the board are doing well. The seasonal markets with the weather, the Denvers and Chicagos, Minneapolis, they see a bit more seasonal slowdown, but we'll expect those to pop out. Outside of that, it's kind of across the board that we're seeing both health and strength on new lease and renewals.
In terms of L.A., you know, Southern California specifically, you know, where do you think sort of bad debt can get to? By the end of this year, do you think you're gonna be at a sort of normal run rate of bad debt? Does that sort of help your sort of 2024 numbers?
Yeah. The way we've looked at it this year, the first half of the year will be a little elevated on the bad debt side. We have opportunity, especially in California and some of the other markets that have been slower in terms of the systems, court systems and process to clean up. Our focus in this first six months is to try to get as much of that through the system as possible and start to return back to normal in the second half. We're not gonna capture our historical numbers this year. Given the L.A. County and Southern California noise, there may be a little bleed over into 2024, but we expect that most of the cleanup's gonna happen this year.
The good news that we're seeing is about half of our markets are running towards our historical bad debt numbers, which is great. That means when the system is working and the courts are opened up, we're able to get back to where we were. The places that are in transition, we're working through. Again, we see this as more of a transitory issue as we get through this year, next year, we'll start to return to normal outside of the kind of blend of how long California takes to clean up. Even when we get through L.A. County, the courts through that take a lot longer, so it could push into the latter part of the year into next year.
Does this experience with California change your views on long-term ownership in that market?
Look, and I'm on the record with this. Like, there's some amazing things about owning residential in California. The margins are terrific. The demand's off the charts. It comes with the nuance around this stuff, Nick. I don't think it changes it programmatically for us in that we love what we have. We bought less than 400 homes there since 2017, so it's not like we've been investing new capital in that market. Yeah, it may affect how you asset manage out of particular parts of the state over time, but nothing wholesale at this point. We still love the business there. The residents are terrific. It's just fraught with legal gymnastics from time to time, unfortunately.
Outside of that, it's an amazing economy with healthy demographics and great job growth and GDP that's fantastic. You wanna be in those markets as an owner of real estate. I think just managing the civil side of what all the stuff Charles talked about has proved a lot more difficult, you know, sitting here three years later after the pandemic. It's gone on a bit too long. I think even generally they know that. I think they're trying to work through it. It's just fraught with politics.
I think maybe more broadly, has anything that's happened with COVID shifted your view of any of the markets out there, just in terms of thinking about people can work, generally where they want now? Not everybody, but there's a lot more movement to certain markets. Do you think that's sort of a permanent shift or a temporary COVID-induced shift?
I think we got it right 12 years ago in focusing on the Sun Belt in the Southeast and getting as much concentration and scale as we could in these markets, not being distracted by like yields in the Midwest. We got a little distracted with Chicago, it's actually been a really good market for us the last 24, 30 months probably. I think if anything, we'd love to have more scale in the 16 markets we're in. We'd love to ultimately get some exposure maybe to a couple of new markets. You could argue we should be in San Antonio and Austin and Salt Lake and some of these higher growing markets, as you think about the next 10 years for the business. No, I think by and large, we got it right. I think it was emphasized during the pandemic.
I think, you know, states that have favorable, you know, metrics around productivity, whether it's, you know, state income tax rates or abilities to bring in new product and new supply into the market are going to benefit over the long haul. We're going to continue to work with our partners to build as much new product as we can in these markets that are willing to have us. We wanna build a ton of it over time.
I'll just add from an overall demand perspective, as we survey our residents, it's clear they're asking for more space. They want the extra bedroom if it's a hybrid environment. Outside of the going into markets, there is an overall strong demand for the single-family, given the space and optionality that our school districts and job centers that we offer.
I was going to ask on scale, right? You want more scale. What is the benefit from a margin perspective as you get that scale within an individual market? I recognize margins are impacted by property taxes, but if you just think about one individual market, what's the opportunity there?
Yeah. If you look at, we have a handful of markets that we are 6,000 homes or larger, South Florida being one of them, Tampa, Phoenix, Atlanta, South, SoCal. You get to a place where you get the real economies of scale. You can get some redundancy in terms of talent. If you lose somebody, it's the next person up, and you can keep moving. You get some of that local density in terms of how we utilize our maintenance, our superintendents as we're taking in homes and growing in terms of leasing. There's real benefit there. Our smaller markets, like the Denvers and the Dallases, have an opportunity to try to grow into some of that scale, and there's some benefit.
They're large enough now that we're at that base size where it's really effective and still healthy. There's opportunities when you can create a second team and start to get some of that crossover. Then, you know, broader, outside of the local density is that national scale that we have with our procurement power, our ability to, you know, think about pricing power on appliances and paint and flooring and all those things that drive our cost. A little bit of a change in dollars that permeate through all of our homes really make a difference. Our national scale is a big benefit for us as well, and we continue to try to squeeze on that, especially in this inflationary environment.
We can't stop it, but we can be better than others than a mom-and-pop or retail would have to deal with otherwise.
When you think about climate risk and resiliency and the interconnected issue of casualty insurance pricing, does that lead you to think about shifting capital in any way towards some markets away from others?
It definitely weighs into our thinking, you know, sort of serendipitous we're in Florida having this conversation. You know, you think about the way that insurance rates are moving. I'm sure you all have heard this from other real estate operators. This year is going to be a little bit more costly on the insurance side. I think to a degree, Scott, I think the challenge is it's hard to pivot really fast. I think it's longer and thematical. Again, if you invest more capital in Arizona, you're going to start to think about drought and water table issues. If you invest more in California, you're going to worry about earthquakes at some point. It's not that there's like any one market that makes, you know, a ton of sense.
I lived in Dallas the last seven years. My house froze twice in the last seven years. I think it's sort of the part of what we just have to manage. I don't know that there's a, like, an aha answer to any of it. Maybe you'd be more deliberate about which floodplains you're willing to be near versus not in, if you're in Florida, for example. I think just having a balanced and measured approach to kind of spreading that risk across the basket in your portfolio is really the way to do it. I think we've, by and large, for the most part, been pretty lucky and have been measured in kind of how we've done that. We've had some issues, but we haven't had anything that was, you know, overly intense where we couldn't manage and handle it.
I think our operating infrastructure allows us to react to that type of stuff a lot quicker than most. The flexibility we have with, you know, 400 + vans on the road and relationships with, like, Home Depot and Lowe's and some of our big suppliers who are literally in our business every day with their protests. We can get sandbags and lumber and all that stuff in place, so we can, you know, maybe mitigate some of that CapEx risk when there is an event. In terms of how you think about, you know, potential exposure down the road, you'll just asset manage your way through it to some degree. I don't know if you guys want to add anything to that insurance stuff.
Was there a question? If you could just repeat it in case others can't hear.
Sure. Dallas, you talked about controlling the controllables, and I'm just wondering the evolution of your industry, in terms of preventative maintenance sort of practices and policies and how that's evolving for you and the industry to avoid unnecessary CapEx or premature CapEx.
Yeah, I can jump in.
Yeah.
You know, we, our ProCare approach, which is the proactive maintenance, is key, and it's been a big part of our success. I will highlight that when COVID kicked in, we pulled back on some of that. We had to. We couldn't get inside people's homes, and we had to be thoughtful around a lot of that interaction. We're trying to get caught up for times that we haven't been able to get in. As we're dealing with delinquency, we're also not able to do what we call our PMOVs or pre-move-out visits that usually allow us to get our homes back in better shape because we set expectations with the resident. This is what you can do to maximize the return of your deposit, and that gives us the home back in better shape.
At the same time, we can turn it quicker. We're back on that ProCare offense, but it takes some time with some homes that we hadn't seen, and we're trying to get through this cleanup phase that we're in right now. I think that's a big part of our business. It's not only, you know, on the exit, it's also for us what we call our resident orientations. When we move somebody in, we wanna set expectation on, this is what you manage, this is what we manage. We create a fridge list, come back 45 days later and say, "Hey, what's on your list, and is there anything we can do while we're in here?" We're, we're back on that program. We started rolling that back out last year. That's great, but there's some catch up and cleanup to do.
As we go through that and we introduce technology and other things, we can get smarter and better with it, faster for our fields teams to implement, as well as make it more transparent and easier for our residents to see it as well. That's where technology steps in.
I'll just add one thing. Charles has done an amazing job in really. You know, we forget we've got this, you know, big company, right, with 88,000 assets, but we're only 10 years into running the company. We're still in the earliest of innings of where, you know, we're going with mobile technologies and with our customers and the way that we route vans and how, you know, a service operator in our company can. If you can go from six work orders a day to seven work orders a day, you guys would be shocked at what that does for us from an efficiency perspective and how we can continue to drive down costs over the long haul. Our app's been downloaded something like 120,000 times in the first year.
You know, just our communication and how we're dealing with the resident is far different than how it was three years ago. That is, like, the first inning of how we plan on communicating with the resident. As you think about what Charles said around how do you move somebody in, how do you move somebody out, those are like table stakes. Like, we've gotta be excellent at that. Where it gets really interesting and exciting for us is, can we start to turn a home inside of 12 days instead of it taking 12 days? Every market's a little bit different, but when you pick up a day one way or the other, it's a massive amount of bottom line for our shareholders.
We have spent a lot of money the last year investing in technology systems, people, and we're just now starting to see a lot of the net benefit there. As you think about... I wanna go back to your question, which is, and I think my team's sick of hearing me say this, but we wanna control the controllables. There's certain things that are gonna be outside of our elements, like a hurricane that rips through Fort Myers or something like that. If we can control the communication with the customer, the expectations set up front, and how we expect to get that home back at the end, and then all the little nuance on the operating side of it along the way, the sky's the limit for how efficient this business can get over time.
I'll just add something. I sold a pretty large portfolio in Indianapolis to SFR players, and I was shocked at their apathy and ignorance about simple maintenance issues. Your competitors in the industry, not yourself.
Thank you very much.
If, for example, like, you walk in, you walk into a garage door opener, you turn the garage door opener on, it's loud and noisy. It takes 15 seconds to put some silicone grease on those things.
Right.
that garage door goes out, that's gonna cost you $2,000.
Right.
You know? Simple little things like that they were not doing. I'm shocked.
To your point, like, smaller operators have a hard time doing that in scale. That's, that's the Someone asked a question about scale and why it matters. Like, that's exactly why it matters. If we have 30 vans in Atlanta that can keep silicone in the van or WD-40, right, or all these little kind of nuanced things. Then, by the way, to Charles's point, when we move somebody in, we say, "Hey, if it's non-major, we're gonna be back in 45 days. Here's your kitchen list. That squeaky garage door or that hinge on a door that's making noise, just mark it down, and then, you know, Dallas will be out here in 45 days." It won't be me 'cause I'm not very handy. You-- we'll hit every one of those items, right? That also lowers the angst.
It makes the experience more professional, and it just adds to the overall ability to retain that resident at the end of the lease. You just have to do it up front, and you have to do it appropriately.
That's a great point. It's a game of inches. We know that. Every little $5 and that time you put there to avoid a $500 replacement is the mentality that we're making sure that we give to our teams.
You got into about, I think, 7% on property tax increases this year and 10% for the remaining part of your expenses. Can you just help us think about sort of when some of those expenses should normalize? I mean, obviously you're not in control of property taxes, but you are in control of some piece. You know, for that other, call it, you know, 40%, 50% of your expenses, when should those normalize and come back to more of, like, a 3% type number?
Unfortunately, I left my crystal ball at home, but I'll say that, you know, look, clearly, we think that there is still some runway left from the perspective of property taxes, which are far and away the largest component of our cost structure. We've talked a little bit about insurance. Insurance is only about 5% of our cost structure, but as other property owners are experiencing, our sense is that that's gonna be elevated. I think if you look at the rest of the cost structure, you know, we continue to expect sort of inflationary pressures to work their way through the system. I think our hope is that, you know, as we get into the back part of this year and early next, we start to see some degree of normalization.
You know, again, we're focused on the things we can control, which are how do we influence the efficiency with which we approach certain things? How can we be thoughtful about where we are spending dollars, either in a preventative manner or a reactive manner? And how does that flow through our asset management decisions, right? I mean, one of the nice things about our business. There's an incredibly liquid underlying market, and if on a turn, we identify a home where the capital reinvestment that would be necessary just doesn't pencil from the perspective of a rebuy analysis, we can sell that home into the end user market. You know, what we're experiencing right now is multiple offers on the homes that we're selling.
you know, I think, it really comes back to being prudent, being careful, and controlling what you can control, and trying to be transparent, with respect to the rest of it.
I just add anecdotally, when we talk to builders, developers, they're starting to see that costs come down, like, on the front-end side, wet and dry utilities, lumber, some of those things. Nobody's seeing it yet in terms of 'cause there's still supply chain issues around sinks, faucets, you know, LVP flooring. Our scale will help us with some of the procurement kind of, you know, recost that we're doing. A lot of this stuff, just like in the insurance business, is getting passed on to some degree. I think to John's point, we're still a ways away from kinda seeing, call it, the end of that pipeline come down in pricing.
Got it.
You talked about the supply-demand imbalance we're seeing. I think you said something like, call it, we need 13 million units over the next seven years. At the same time, your acquisition guidance is probably the lowest it's been in quite some time. You know, what's the inhibitor there? What would cause you to be, you know, more aggressive on the acquisition side? Is it just cost of capital, or are you waiting for required returns to come up as well?
Well, and I'll go for a little bit here, so just bear with me. I'd say, first, from a cost of capital perspective, we don't like our current cost of capital on balance sheet. The stock's really cheap. There's plenty of outside capital that wants to create additional venture with our company. The bid-ask spread is a little wide right now. And I think a large part has to do with where financing costs are. As you start to think about, you know, we basically paired back in May of last year, our buying, call it one-off and resale type stuff, got just really careful, just given how quickly interest rates and the markets were starting to move.
What we've basically seen, you guys, in about nine months is cap rates that have moved from the low fives to the mid fives. You know, you couple that with the fact that on cash, we're getting paid 4.5% right now, it's hard to argue that you wanna lean in and go buy 5.25 cap type assets when your cash is generating such... It's a boring answer, but it's the truth. I think for us, we've got plenty of liquidity. Between our current venture, free cash flow, untapped revolver, we've got inside of $2 billion of near-term liquidity. We're ready if or when the opportunities make sense.
I think the positives have been so far in the first seven months of this interest rate creep has been, I think our conversations with our current builder partners and others are accelerating to where there'll be more opportunity to continue to add to our development and builder pipelines, add structures and terms that make a ton of sense for the business today. That is an area that we're hyper-focused on. The resale supply market, as we sit here in March of 2023, is less than it was in March of 2022. Even if you want to be active in the resale market, which we are, we'll write 80 to 100 offers a week, but we're casting at much higher cap rates to make sure it's accretive.
The last thing I wanna do is do deals for the sake of doing deals that aren't accretive to my shareholders. We're really comfortable right now sitting on cash, operating the business as well as we can, and being ready. I do think there will be some opportunities over the next year with the smaller operators that are gonna have a harder time recapping their portfolios at interest rates that don't make sense. I think one of our benefits is that we're gonna have, you know, whether it's cash or OP units, dry powder, to be able to be a good partner, a trading partner for some of these portfolios. I would expect that, you know, last time this year, we had about 1,200 homes in our pipeline on the builder program. Today, it's at 2,300 homes.
I would expect we continue to grow that to where that becomes, you know, a multi-billion dollar type pipeline at returns that are far better than we get in the end user market right now.
Yeah. I guess along that, do stock repurchases make a little bit more sense now? You mentioned the stock was really cheap. I know Ernie's worked really hard to get to investment grade and build a great balance sheet. You know, you know where your stock's trading today, and you said it's really cheap, so why not just buy it back?
It's a fair question. People are asking it. We've certainly considered it. If you think about where do we have the ability to make the biggest dent for shareholders, it's probably not in buying $75 million-$100 million of stock each quarter right now, and especially when our cash is generating a 4.5%. It's probably, you know, being ready and opportunistically buying as much assets that are gonna lend themselves to longer term accretive growth. Yeah, we don't love where the price is. It's not in a world where it's that blatant that we should do that.
Since we're getting to about five minutes here. But I wanna touch on the regulatory side. I know you get asked it a lot, but it's obviously really important for the industry. A couple questions on that. You know, you saw certain municipalities like Charlotte come out with a sort of a proposal to limit the number of purchases of institutional homes or limit the amount that institutions can own in a certain market. I guess, first, we would love to get your thoughts on that and just anything else that we should be aware of on the regulatory side that you're watching.
Well, we're always watching. You're right to call it out. It's important. Look, we're in housing. I think us, our multifamily peers, skilled nursing, you know, assisted living, we're all kind of gonna live in this environment where housing debate and housing discussions are gonna be more prevalent, especially in light of all the supply factors that are gonna continue to be challenging, I think, for the new supply piece of the discussion. In terms of things we're hyper-focused on, I would just tell you from a macros, it feels like the pendulum swung pretty hard in the last two years, and there's sort of a little bit more balance now at the federal level. I think in the House specifically, we have a lot of supporters of our space and of trying to create regulation that actually allows for more development.
I think companies like ours that have existing scale, to your point in Charlotte, that is an absolute strategic advantage if you already have scale in some of these markets. I think some of these things will pop up and some may stick, and some may go away. That same argument came up in Atlanta last year, and the attorney general and the governor there got pretty active and squashed it because you want new supply. You wanna encourage development, new supply, not sort of the opposite. I think it'll vary by market. I think we have to be pretty nimble in paying attention to it. At the end of the day, I'm really grateful that we already have significant scale in some of these markets. My instincts are that this is...
I don't want to say it's fleeting because it deserves more attention than that, but I also think it's sort of like how pendulums swing one way high or the other. Right now we're sort of on one of the higher ends of where the pendulum is. I think if interest rates stay elevated and mortgage rates stay between 6.5% and 7.5% for a long time, you're gonna see more housing supply and stock come back into the resale market. That will ease some of those challenges
I guess, is there any desire or willingness to work with the other large SFR players to sort of self-regulate? Meaning, I don't know, limit increases, limit the percentage that you own in a given market, or just institute sort of best practices that would effectively allow you to self-regulate versus having politicians kind of come in and potentially make arbitrary rules.
I think I'm gonna answer the question differently. I don't wanna do anything ever that would violate any sort of an antitrust type of thing where we're talking about rents or caps or anything like that. Never. I think what we'd wanna do is continue to work with our trade association to have engaging conversations with people at both the federal and state levels that allow for healthy conversation about what it takes to help normalize housing deficiencies. I know I sound like a politician the way I just said that, for the record, but what I mean by that is you have to be able to get in a room without Twitter and have conversations about what can create meaningful change in the housing continuum. The reality is, and I think you hit on this, is housing is a very local issue.
It's not a federal issue. Most of the noise we get comes from the federal side. The actual ability to influence supply is gonna happen locally. There I believe we've actually made some pretty good inroads in a lot of markets. The Charlotte thing's sort of new, and it's sort of interesting because North Carolina's been actually a pretty easy market to look at new building projects in. We're building there. We've built several communities. I think with some rational dialogue, most of that stuff sort of centers. I think at the end of the day, and I've said this about rate, there are markets that have imposed restrictions on rate, which we abide by. Generally speaking, we want the market to dictate rents. And we're not a... Our company isn't a workforce housing business.
We're a for-lease, for-choice, entity. I think we'd love to follow where the market sets rate and do our best to achieve as much of that rate as we can.
Before we move to the rapid-fire questions, we've been asking each session your top ESG priority.
It's to get out our sustainability report this year.
All right, let's do rapid fire unless there's any other questions. What will Same-Store NOI be for your property sector in 2024? Not for your company, but for your property sector.
How many are in our sector today? Two?
Well, you know, you don't have to worry about that.
Include the privates as well.
Privates.
I just said it's mid-single digits. Mid-single digits. Okay. What's the best real estate decision today? Buy, build, sell, develop.
I think I'd hold. If you're sitting on great real estate, you should operate the heck out of it.
This is another one that, I guess there's only three companies. You know, how many Will there be more or less of the same number of companies in your space?
Same.
in the future?
I think we all think same.
Okay. All right. Thank you very much.
Thank you.
Thanks, guys.
Yeah.