Alan Peterson: Understood. Appreciate all those comments. And maybe, Chris, just shifting over to the JV. Can you give us a sense for what the stabilized run rate on asset management, property management, development fee income could be over the next, call it, two to three years once these JVs are fully ramped?
Chris Lau: Yes. Sure. The right way to think about the totality of the ventures here. The fees for us, and we’ve shared this in the past, the fees for us are largely structured as cost recovery like enabling us to leverage our infrastructure over a larger base. There is a margin on them, but it’s not a super wide profit margin on those fees. For us, the real opportunity here is growing the development program further participation in the JVs themselves. And then the opportunity for really attractive longer-term economics via our promoted interest which as a reminder, is especially unique given the evergreen nature of our venture structures, the JPMorgan Asset Management that provides us the opportunity to earn our promoted interest after construction and initial operation of the properties, meaning we have the ability to effectively monetize a portion of the value creation process from our development program without the need to sell assets, which is really, really unique and will be powerful over time.
Operator: Our next question is from Brad Heffern with RBC Capital Markets. Please proceed with your question.
Brad Heffern: Yes, thanks everybody. Can you walk through where construction costs are currently year-over-year, and has there been any change to the previous view that we’ll see increasing declines just given the strength in the broader housing market?
David Singelyn: Yes. Good question, Brad, on both parts of that. The construction costs year-over-year, we have seen significant reduction as we’ve talked about over the last couple of calls in the lumber and the bat material that goes into the house. That is actually a very significant reduction Today, it’s in the $400, 1,000 board feet, and it used to be in the $1,600 range. So, very, very significant reduction there. At the beginning of the year, maybe late last year, we anticipated having a little bit more reduction in some of the other input costs. With your comment about the housing market picking up, that hasn’t materialized to the extent we thought it would. But one other thing has materialized. And that is we have made investments into many of our platforms.
We talk about Resident 360 today. Well, a couple of years ago, we were making investments into our development platform. And today, we’re seeing benefits from that in better efficiencies in our construction cost. It’s a better ability to control the inventory better ability to get the volume discounts from vendors, et cetera. So, through that process, we have seen some benefits. And all of this is the drivers to, I think, Steve Sakwa’s prior question, that leads us to seeing our rental rates significantly increasing between now and the end of the year as those lower costs and more efficiencies play out in the construction of homes third and fourth quarters and future years.
Brad Heffern: Okay, got it. Thanks for that. And then I wanted to get your thoughts on supply. Obviously, the MLS acquisitions have grown to a halt for pretty much everyone, but how do you think about build to rent supply? And is there anything that suggests that more people are renting out their homes because they have locked in low rate mortgages?
David Singelyn: Yes. Again, it’s kind of two parts. One is on the supply for investment in acquisition and the shadow inventory of renting out the existing home to let Bryan talk about, but on the acquisition and investing side, you’re 100% right. The MLS inventory is significantly reduced. In many markets, it’s 50% of what we’ve seen historically. Not a surprise. People are kind of trapped in their homes with favorable mortgages that they can’t replace. So they can’t move and that has led to a scarcity of inventory. I think it’s part of the reason that the prices have remained strong recently. With that said, what we have — when we got into development, one of our thesis for development is we could grow in all economic cycles.
