Angela Kleiman: Sure thing, Daniel. We are predominantly in — on the east side, so over 60% of our portfolio is more suburban in nature and the east side. And what that means is because supply is predominantly in the CBD, we are more insulated from that. And we — so we’re seeing much better activities coming from the east side of our portfolio. And where things are trending right now, we are seeing some demand — some demand growth, which is healthy, which is a good indicator at this point. Downtown seems to be doing okay. It’s holding its own. And what we expect is the cadence of supply to occur some more time between now and next quarter in terms of the bulk of the delivery. But as we’ve all experienced in this market that can get slightly pushed by a month or two in our markets, but that’s what we’re expecting at this point in time.
Daniel Tricarico: Thank you.
Operator: Our next question comes from the line of Eric Wolfe with Citi. Please proceed with your question.
Unidentified Analyst: Thanks. It’s Nick here with Eric. Angela, you mentioned kind of what’s happening in L.A. and the overhang and kind of getting the units back, which obviously is a good thing, medium and longer term. Just curious if you’ve changed the underwriting in that market specifically to make sure you’re rented to tenants that are going to be paying the rent?
Angela Kleiman: Hey Nick, Rylan will talk about how we’re underwriting activities in our various markets, including L.A.
Rylan Burns: Yes, hi Nick, I think there’s a higher degree of caution as it relates to what we’re seeing in L.A. Thankfully, a double-edge, where we have a lot of exposure to that market. So I think we have pretty good data. And as we’ve shown over the past year or two, we know how we are turning these delinquent units back into rent paying units and how quickly that can occur. So I feel like we’ve got pretty nuanced underwriting as it relates to L.A. market, but it is something that we’re certainly factoring in.
Angela Kleiman: Yes, Nick. And as it relates to the actual tenant underwriting itself for leasing activities, we have not needed to make any material change. Obviously, from building to building, there are always nuances and the tenant background and credit. We set a very solid bar for our credit. What has happened with delinquency really is not related to our underwriting. It’s really a legislation result because eviction moratorium went on for so long. And then all the courts are backed up in terms of processing these evictions which is why the whole time line to get out these nonpaying tenants became prolonged. And so in terms of — if you’re talking about, say, new tenants going delinquent, we’re not seeing that as a material problem at all.
Unidentified Analyst: Okay. Yes. That’s exactly what I was asking about. So you’re not seeing anything from new tenants. This is definitely more of a residual of what you’ve seen before because it seems like the bad debt has certainly been improving pretty rapidly recently. It feels like April was even better than the first quarter.
Angela Kleiman: Yes, that’s correct, Nick.
Unidentified Analyst: Okay, thanks. Thank you, appreciate it.
Operator: Our next question comes from the line of Alexander Goldfarb with Piper Sandler. Please proceed with your question.
Alexander Goldfarb: Hey, good morning out there. Angela, just going back a few questions back to the demand and jobs and tech jobs. What do you think is more the reason for this if tech is still sort of sluggish on the hiring front, would you say it’s more about sort of markets returning to normalcy more about people, let’s say, in Southern Cal enjoying that lifestyle? Or is this really just a function of housing shortage. And we can talk about all these other factors, but the reality is the lack of housing, the single-family slowdown, meaning since the credit crisis, the shortage, that’s really the dominant driver. And therefore, all these other items that we talk about are sort of on the margin, but it’s really the housing shortage that’s driving the stronger-than-expected recovery in apartments.
Angela Kleiman: Hey, Alex, that is an excellent point and good job. You’ve been paying attention. What we are seeing is that the supply definitely is a significant benefit for our markets, and it’s something that we’ve been stating for several years now, in that we don’t need much demand for us to achieve our plan and to have a healthy performing market. And so these other incremental benefits are great signs in terms of whether it’s moving a return to office. We are seeing continued improvements in both domestic and international migration and in fact, we’re showing a positive population growth for the first time in three years. So all these little anecdotal data on the margin is hopeful. But in terms of really driving acceleration, the other — the high-paying job growth will need to kick in. But our markets are going to do just fine.
Alexander Goldfarb: Okay. And then the second question is just an update on the whole — you have a third attempt on overturning Costa-Hawkins sort of, I guess, six months out. Is there a sense for — what’s the sense on the advocacy front, where both sides stand. And obviously, Gavin Newsom has been big into promoting new housing. But are there major political forces coming out in support of low returning Costa-Hawkins? Or the majority of the political might out of Sacramento is supporting — keeping Costa-Hawkins against the ballot initiative?
Angela Kleiman: Alex, that is an important question. What we are seeing is the vast majority of the legislature are not supporting overturning Costa-Hawkins. So they’re on our side. And because they recognize, especially in our market, we have an acute shortage of housing. And so that is not — that is an antigrowth initiative. We have maintained our coalition to support reasonable legislation and especially relating to housing. And of course, this proposal has been defeated overwhelmingly twice, and we just have not seen anything that shows that will be different this time.
