So it’s a really interesting moment. The newer build stuff that seems to be coming online, both things that we’re taking from a delivery perspective, conversations we’re having with builders, I think the return profile is a little bit better. But those are going to be fewer — not fewer and far between, but there’s just going to be, I think, more angst on the builder side to lean out in sort of an uncertain environment, given where interest rates and things are. So all things being equal, plenty of capital interested in investing, not a tremendous amount of opportunity real time. But we expect that to kind of moderate throughout the year. I think we got to see what happens with mortgage rates. I think as of yesterday, there were a 30-year was closer to like a (ph) number.
Ernie Freedman: Yes, sure. So Brad, we talked about in our — in the prepared remarks as well as in the earnings release, a couple of the items, one with — and I’ll talk about kind of the midpoint of the guidance range, Brad. At the midpoint of guidance, we do expect down a little bit year-over-year. I think we’re in 2022, we’re at 97.7%, 97.8%. I think that’s going to come down a little bit. It has to do mostly with the fact we think turnover is going to be a little bit higher. And we talked about that as well in terms of — as we’re able to finally to make some more progress on residents, who haven’t been keeping current with the rents. We do expect turnover to tick up some, and that’s why you’re going to see occupancy come down.
The other thing — the other material mover on the negative side for us with regards to — for growth on revenues is going to be bad debt. And we’re certainly facing a lot of the challenges that other folks are out there who have exposure to Southern California. We do expect that bad debt is going to be up anywhere between 25 basis points and 75 basis points from where it was in 2022. So roughly at the midpoint about 2% where we came in at about 1.5% for the year for 2022. We do think that’s going to be elevated a little bit more in the first half of 2023. And we do — we see a path that we can start getting a little bit better for us in the second half of the year. The last thing I’d say, the other two pieces that are important with our other income.
And we think other income is going to be up again low double-digits, similar to what it was last year as we continue to make progress on our ancillary income items. And finally, with rates, our earn-in — we talked about it on our last call, our earn-in as we got into the year, we expect it to be about 4% from the activity that was done in 2022, and that didn’t change in the fourth quarter. We did see the loss to lease shrink significantly from where it was at the end of the third quarter, where it was at the end of the fourth quarter. The loss to lease going into the year is about 1% to 2%. And we saw that decrease for a couple of reasons, Brad. One was just leasing activity. We started to catch up to that. But two, and Charles talked about it, typical seasonal patterns for folks in the residential business, and we’re no different than a single-family is that you actually — in a typical seasonal year, you’ll see some sequential declines month-over-month in rental rate.
