Camden Property Trust Reit (CPT) Q2 2021 Earnings Call Transcript

Camden Property Trust Reit (CPT 1.05%)
Q2 2021 Earnings Call
Jul 30, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Kim Callahan -- Senior Vice President of Investor Relations

Good morning, and welcome to Camden Property Trust Second Quarter 2021 Earnings Conference Call. I'm Kim Callahan, Senior Vice President of Investor Relations. And joining me today are Ric Campo, Camden's Chairman and Chief Executive Officer; Keith Oden, Executive Vice Chairman; and Alex Jessett, Chief Financial Officer. [Operator Instructions] At this time, I'll turn the call over to Ric Campo.

Ric Campo -- Chairman and Chief Executive Officer

Good morning. The theme for our on-hold music today was coping with the chaos. Last year when the pandemic began, we held a companywide conference call to share some of the lessons learned from the great financial crisis. I started the call with the first line of the famous retro kicking palm if looks like this. If you can keep your head when all about you are losing theirs and blaming it on you. We went on to lay on a list of suggestions to help cope with the chaos that we knew it was headed our way. Among other ideas, a few suggestions were included in our on-hold music today.

We knew that Queen and David Boy and our teams are going to find themselves under pressure. And we new when that happened, we told them just to take the advice from the Eagles and take it easy. We encourage them to embrace innovation, tail path, and as Boston reminds us, don't look back. We said we rely on Camden's values and culture and do things our way because like Bon Jove, we were born follow. And finally, we encourage them to get on board the REO speed wagon and roll with the changes. At the end of the call, we showed a video that was produced by our Dallas Texas operations group during the great financial crisis. That seem just as appropriate for what we faced at the beginning of the pandemic. We thought you might find that interesting today. So go ahead and roll the video. When we held our first quarter earnings call, we are beginning to see an acceleration in both occupancy and pricing power across our markets. The actual rate of acceleration that occurred since the call, which far exceeded our estimates and resulted in the improved earnings guidance we released last night. Across the board, we are seeing a very strong performance and continued improvements in our operating fundamentals. And in almost all cases where current rental rates exceed the pandemic levels. The outlook from our third-party economists and data providers is also quite positive. And they expect the apartment business will continue to thrive as we move into the second half of 2021 and into 2022. Despite the ongoing levels of high supply in many markets, demand has been greater than anticipated, allowing positive absorption of newly delivered apartment homes. Our occupation is currently 97%, leasing activity is strong, and turnover remains low. So overall, I would say our outlook for Camden in the multifamily industry is very good. We are excited to have entered the national market with the acquisition of two high-quality apartment properties. Our acquisition and development teams continue to work hard and smart to find opportunities in a very competitive environment. I want to give a shout out to our amazing Camden team members for doing a great job in taking advantage of this strong market. Great customer service and sales acum is very important in a market like this. We must deliver great customer service and support the Camden value proposition when asking for and getting double-digit rental increases from our customers. Thank you, team Camden for everything you do every day to improve the lives of our teammates, our customers and our stakeholders, one experience at a time. Next up is our co-founder, Keith Oden.

Keith Oden -- Executive Vice Chairman

Thanks, Ric. Now for a few details on our second quarter operating results. Same-property revenue growth was 4.1% for the quarter and was positive in all markets, both year-over-year and sequentially. We have remarkable growth in Phoenix and Tampa both at 9.1%, Southeast Florida at 8.6%, Atlanta at 5.7% and Raleigh at 4.6%. We thought the April new lease and renewal numbers we reported on last quarter's call were pretty good at nearly 5%. But as Ric mentioned, pricing power continues to accelerate. For the second quarter of '21, signed new leases were 9.3% and renewals were 6.7% for a blended rate of 8%. For leases which were signed earlier and became effective during the end -- during the second quarter, new lease growth was 5.4% with renewals at 4% for a blended rate of 4.7%.

July 2021 looks to be one of the best months we've ever had with new signed -- signed new leases trending at 18.7%, renewals at 10.5% and a blended rate of 14.6%. Renewal offers for August and September were sent out with an average increase of around 11%. Occupancy has also continued to improve, going from 96% in the first quarter this year to 96.9% in the second quarter and is currently at 97.1% for July. Net turnover ticked up slightly in the second quarter to 45% versus 41% last year due to the aggressive pricing increases we instituted, but it remains well below long-term historical levels. Move-outs to home purchases also ticked up slightly from 16.9% in the first quarter this year to 17.7% in the second quarter, which reflects normal seasonal patterns in our markets.

So despite the constant headlines regarding increased number of single-family home sales, it really has not had an effect on our portfolio performance as the move-outs to purchase homes are still slightly below our long-term average of about 18%. Ric mentioned Camden's why in his opening remarks. It's something we discuss internally often. Our purpose or why is to improve the lives of our teammates, customers and shareholders, one experience at a time. In our companywide meeting at the beginning of the pandemic, we shared the Star Wars video, and we emphasize that the chaotic months ahead would provide an extraordinary number of opportunities to improve lives one experience at a time. We focused our efforts on improving our teammates lives who likewise focus their attention on improving our residents' lives. The results have been truly amazing, and we could not be more proud of how Team Camden has performed throughout the COVID months.

Improving the lives of our team and customers has in turn improved the lives of shareholders, including the approximately 500 Camden employees who participated in the employee share purchase plan this year. I'll now turn the call over to Alex Jessett, Camden's Chief Financial Officer.

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

Thanks, Keith. Before I move on to our financial results and guidance, a brief update on our recent real estate activities. During the second quarter of 2021, as previously mentioned, we entered the Nashville market with a $186 million purchase of Camden Music Row, a recently constructed, 430-unit, 18-story community and the $105 million purchase of Camden Franklin Park, a recently constructed 328-unit, 5-story community. Both assets were purchased at just under a 4% yield. Also, during the quarter, we stabilized both Camden RiNo, a 233-unit $7 million new development in Denver, generating an approximate 6% yield in Camden Cypress Creek II, a 234-unit joint venture in Houston, Texas, generating an approximate 7.75% yield. Clearly, our development program continues to create significant value for our shareholders.

Additionally, during the quarter, we began leasing at Camden Hillcrest, a 132-unit, $95 million new development in San Diego. On the financing side, during the quarter, we issued approximately $360 million of shares under our existing ATM program. We used the proceeds of the issuance to fund our entrance into Nashville. Our existing ATM program is now fully utilized. And in line with best corporate practices, we will file a new ATM program next week. In the quarter, we collected 98.7% of our scheduled rents with only 1.3% delinquent. Turning to bad debt. In accordance with GAAP, certain uncollected revenue is recognized by us as income in the current month. We then evaluate this uncollected revenue and establish what we believe to be an appropriate reserve, which serves as a corresponding offset to property revenues in the same period.

When a resident moves out OMS money, we typically have previously reserved all past due amounts, and there will be no future impact to the income statement. We reevaluate our reserves monthly for collectibility. For multifamily residents, we have currently reserved $11 million as uncollectible revenue against a receivable of $12 million. Turning to financial results. What a difference a year or a quarter can make. Last night, we reported funds from operations for the second quarter of 2021 of $131.2 million or $1.28 per share, exceeding the midpoint of our guidance range by $0.03 per share. This $0.03 per share outperformance for the second quarter resulted primarily from approximately $0.03 in higher same-store NOI, resulting from $0.025 of higher revenue, driven by higher rental rates, higher occupancy and lower bad debt and $0.05 of lower operating expenses driven by a combination of lower water expense and lower salaries due to open positions on site and approximately $0.02 in better-than-anticipated results from our non-same-store and development communities.

This $0.05 aggregate outperformance was partially offset by $0.01 of higher overhead costs, primarily associated with our employee stock purchase plan, combined with a $0.01 impact from our higher share count resulting from our recent ATM activity. Last night, based upon our year-to-date operating performance and our expectations for the remainder of the year, we also updated and revised our 2021 full year same-store guidance. Taking into consideration the previously mentioned significant improvement in new leases, renewals and occupancy, and our resulting expectations for the remainder of the year, we have increased the midpoint of our full year revenue growth from 1.6% to 3.75%. Additionally, as a result of our slightly better-than-expected second quarter same-store expense performance and our anticipation of the trend continuing throughout the year, we decreased the midpoint of our full year expense growth from 3.9% to 3.75%.

The result of both of these changes is a 350 basis point increase to the midpoint of our 2021 same-store NOI guidance from 0.25% to 3.75%. Our 3.75% same-store revenue growth assumptions are based upon occupancy averaging approximately 97% for the remainder of the year, with the blend of new lease and renewals averaging approximately 11%. Last night, we also increased the midpoint of our full year 2021 FFO guidance by $0.18 per share. Our new 2021 FFO guidance is $5.17 to $5.37 with a midpoint of $5.27 per share. This $0.18 per share increase results from our anticipated 350 basis points or $0.21 increase in 2021 same-store operating results, $0.03 of this increase occurred in the second quarter, with the remainder anticipated over the third and fourth quarters and an approximate $0.06 increase from our non-same-store and development communities. This $0.27 aggregate increase in FFO is partially offset by an approximate $0.09 impact from our second quarter ATM activity. We have made no changes to our full year guidance of $450 million of acquisitions and $450 million of dispositions.

Last night, we also provided earnings guidance for the third quarter of 2021. We expect FFO per share for the third quarter to be within the range of $1.30 to $1.36. The midpoint of $1.33 represents a $0.05 per share improvement from the second quarter, which is anticipated to result from a $0.04 per share or approximate 2.5% expected sequential increase in same-store NOI, driven primarily by higher rental rates, partially offset by our normal second to third quarter seasonal increase in utility, repair and maintenance, unit turnover and personnel expenses. A $0.015 per share increase in NOI from our development communities in lease-up, our other nonsame-store communities and the incremental contributions from our joint venture communities. And a $0.02 per share increase in FFO resulting from the full quarter contributions of our recent acquisitions. This aggregate $0.075 increase is partially offset by $0.025 incremental impact from our second quarter ATM activity.

Our balance sheet remains strong with net debt-to-EBITDA at 4.6 times and a total fixed charge coverage ratio at 5.4 times. As of today, we have approximately $1.2 billion of liquidity, comprised of approximately $300 million in cash and cash equivalents and no amounts outstanding under our $900 million unsecured facility. At quarter-end, we had $302 million left to spend over the next three years under our existing development pipeline, and we have no scheduled debt maturities until 2022. Our current excess cash is invested with various banks, earning approximately 25 basis points. At this time, we'll open the call up to questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question today comes from John Kim with BMO Capital Markets.

John Kim -- BMO Capital Markets -- Analyst

Ric and Keith, I know you mentioned that July is on track to be one of the best months you've ever seen, and I thought it would have been clearly the best. But I'm wondering what period this is both comparable to this to, and what may concern you, whether it's affordability, rent income ratios or supply or something else?

Ric Campo -- Chairman and Chief Executive Officer

I would say that we've never seen this kind of demand release into the market and our business groups. I mean you can go to the financial crisis, you can go to the big bust in the '80s, and we've never seen this kind of snap back in demand in the history of our business. I think it's a -- really is unprecedented. What -- I guess, what could sort of slow it all down or stop it or whatever is, what's going on with the pandemic today. The uncertainty in the market today about how the massive fiscal and monetary stimulus is going to happen unwind over time is probably the biggest thing that concerns me. Supply has always been the issue, right? People worry about and supply -- the demand is so high today that supply -- we're not building enough apartments today, if you can imagine that, saying that, that to take up this demand. So it's definitely unprecedented. We're going to enjoy it while its here, and hopefully, it looks like 2021's going to be a really, really strong year. And when you sort of look at the backdrop, it looks like next year is going to be the same. Keith might want to add a little bit to that.

Keith Oden -- Executive Vice Chairman

Yes. So just the last question that John asked was the concerns mentioned affordability. In our portfolio, we're still running about 19% of household income that goes to rent payments. So that's -- it's been in the 18% for the last couple of years. So it maybe ticked up a little bit. But the reality is that our residents had the ones that have -- were not impacted by directly from a job standpoint, COVID, their wages are increasing as everyone else's are. So yes, the rents are going to go up. But my guess is that we're going to see some pretty significant increases in household income as well. And we start from a place of great affordability.

John Kim -- BMO Capital Markets -- Analyst

Okay. And my second question is on development. You quoted that the yields are trending higher on some of the projects completed. But I was wondering where the development yield stands today on your current $907 million pipeline? And how much bigger you envision the developments going forward as far as overall pipeline?

Ric Campo -- Chairman and Chief Executive Officer

Sure. In the $900 million pipeline, our yields ranging from 5% to 6.75%, and so it's pushing up on an average of roughly 5.75% to 6% in total, and that's initial yield. All the IRRs are in the 7.5% to 8.5% range. And that's really instructive when you think about what's been going on in the capital markets, our weighted average cost of capital, given everything that's going on, it's been driven down in the mid- we're delivering development yields in the mid-8s, right? So we're creating -- the spread between our weighted average cost of capital on our development today has been the widest that I've ever seen it. And maybe after the financial crisis, we did some transactions right after the financial crisis, where we're making 10%. And today, and our weighted average cost of capital was obviously much higher 2011 and '12. We have roughly $720 million in our pipeline today, and those yields were not protecting mid-6s or high 6s like we have now.

But you never know, given the current revenue line that we have going up high into the right. So the other challenge to those deals will be just cost and getting the right workers. We do have worker shortage in construction and supply chain disruptions and so big issue out there. So most of our developments in that $14 million of our pipeline are in the mid 5% to 5.5% with IRRs that are in the 7.5% to 8% range. In terms of -- we also are adding to the pipeline. We would like to -- development is a great business right now. Obviously, and margins have been widened dramatically by the low interest rates and low cost of capital. So we are trying to add to that pipeline as we speak as well.

John Kim -- BMO Capital Markets -- Analyst

Great. Thank you.

Operator

Our next question comes from Neil Malkin with Capital One Securities.

Neil Malkin -- Capital One Securities -- Analyst

Good morning and congratulations on the $150 share price, unbelievable. First question, can you talk about really, I think the thing that's driving some of this is in migration trends. Clearly, people are voting with their feet. Just -- can you just discuss if you've seen any changes, acceleration in terms of the percentage of new leases that are from odd-date or from higher cost states, etc? We heard this earnings season that you're seeing an uptick from already elevated levels to sort of new highs in terms of incremental demand for modest state. So any color would be great.

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

So if you look at a year ago, about 15.6% of our new leases came from folks moving to the Sunbelt from other areas. Today, that number is about 19%. So that's a 350 basis point increase in folks moving from non-Sunbelt markets to the Sunbelt markets and renting with Camden. So really fairly dramatic increase on that side.

Ric Campo -- Chairman and Chief Executive Officer

The thing I would add too is that when you look at -- I'll take Houston as an example. Houston was our slowest market in a most difficult market because during the pandemic and after the pandemic, because of the oil and gas influence with Houston. When you look at the number of jobs that have been added back in Houston, relative to Austin or Dallas or Atlanta or some of the other markets, it was at the bottom. And in spite of those jobs or a lot of jobs being added back in the same rate as other markets, the Houston market is bouncing back not as strong as some of the other markets, but in an amazing way. And part of it is this in-migration. People believe fundamentally that markets that have pro-business governments that are -- that have decent weather and job growth opportunities there moving there. Even if the jobs aren't as point today, they're still moving to those markets. And I think that's one of the things that's really pushed up all the demand side of the equation in all of our markets, including Houston.

Neil Malkin -- Capital One Securities -- Analyst

Yes, that's great. And maybe just talking about acquisitions or recycling. Obviously, cap rates are very low, sub-4. But your AFFO cost equity is also in the mid- to high 30s. Your leverage is lows in the industry. I'm just wondering, given the expectations for outsized growth in Sunbelt markets, and I'm sure your conviction in that thesis as well. Would you look to dive a little bit more into the acquisition market kind of using your currency picking up some leverage, which you have clearly the capacity to do and just kind of increase your growth?

Ric Campo -- Chairman and Chief Executive Officer

The answer is yes. And we sort of showed that in the second quarter when we issued under $360 million on the ATM and about $300 million of properties in Nashville, sort of the best match funding we can see with the numbers the years put out as they used to discuss. When we look at -- we look at the incremental sort of dilution rate if you issue equity or bring up debt toward acquisitions and development. And that's not the ultimate arbitrary. What we really do is we look at the most important measure from my perspective, our management game perspective is our weighted average cost of capital relative to our terminal unlevered IRRs. And those unlevered IRRs today when you look at our weighted average cost of capital, it's been driven down obviously through rally of the stock price, the 10-year treasury being at 1.24% today and bond price -- bond yields where they are.

So when you look at a mid-4s weighted average cost of capital, and we can acquire properties like in Nashville. And even though they're lower going-in cap rates, when you look at it on an unlevered IRR over a seven- to 10-year period, 6.5% unlevered IRR when you put in these kind of rent breaks that we're having -- And so I would tell you that 150 basis points of positive run on acquisitions is rare in wetland. And so that shows a -- I think it's a green light for growth and both on the acquisition side and the development side. As long as we manage our balance sheet appropriately. And you've heard me and our management team, Keith and Alex talked about this, our targeted range for debt-to-EBITDA is five to four times. And during -- sort of during good times and strong capital markets, you drive your debt-to-EBITDA down when you get closer to the four. They're in tougher times for bad times, recessions, pandemics and capital market pickups, it drives -- sort of naturally goes up when cash flows decline or interest rates rise and what have you, and that's where it tend to go more mostly to five.

So today, we're in good times, obviously, strong capital markets, very, very strong operating fundamentals. And this is a strong spread between our weighted average cost of capital in our unlevered IRRs. So we're going to methodically grow our company in this way. And today, we've already done $300 million of acquisitions. We have more to come. And as I said earlier, our $720 million development. Hopefully, we get a lot of that starting next year. And this is a time where it's a pretty good time. So we're going to make, hay, while the sun shines.

Neil Malkin -- Capital One Securities -- Analyst

Yes, that's great. Congrats on a good quarter and keep up the great work.

Operator

Our next question comes from Rich Anderson with SMBC.

Rich Anderson -- SMBC -- Analyst

Good morning. I guess 15% increase in rents is improving lives of people. But I am curious, is that market or is that Camden plus market because of all the bells and whistles that you can offer people that your competition can't? I am just wondering -- and I'm referring to the July renewal activity or releasing activity.

Ric Campo -- Chairman and Chief Executive Officer

Keith?

Keith Oden -- Executive Vice Chairman

That's total revenue. So that includes our technology package and all the other amenities that we provide our residential yes. it's all in revenue and you're sort of looking back to the beginning of the year and then looking at asking rents currently. So and as to whether it's improving their lives or not, we have -- it's a three-legged stool. We are going to improve the lives of our residents, our shareholders and our employees. And so clearly, we're improving the lives of our shareholders. We've done so much over the last two years to improve the lives of our residents with our resident relief program and all the other things that we did. Obviously, some of that growth is -- reflects the fact that early on in the pandemic, we were the first company to across the board freeze rents on renewals and new leases. And so obviously, there's some take back of what kind of could have occurred had we not made that conscious decision to allow our residents some flack in the midst of the early days of the pandemic. So yes, the real numbers, and it's strong. And as you look out of YieldStar, all these recommendations are being driven by our revenue management systems. And YieldStar is forward looking out to 90 to 120 days. So I think that this trend is likely to continue.

Ric Campo -- Chairman and Chief Executive Officer

Yes. And I would just add, when you made the comment about improving their lives, I mean, we are. There's a Camden demand, it's no question. And people -- you don't get people to increase their rents that substantially and smile at the same time without providing a value proposition to that customer. then you have to have clean ground. You have to have well-maintained properties, you have to be well located. All those value propositions support driving rents the way we're driving them today because our customers understand that we're a business, and we need to improve our bottom, our top line and our bottom line for them to create value for themselves. If you look at the apartment industry, go down the scale of sort of more affordable housing, where you have, I'd say, more affordable, meaning less cost. But quality of the housing, as you go down with owners that don't understand that you should reinvest in your properties and it should make sure that they're clean and they're safe and all those things. That does really improve the lives of those customers. And the good news is our customers are all doing really, really well.

When you think about the -- our average income is about $100,000, but the challenge with that number is we don't update it when somebody renews their leases. And when you think about the wages for people that are growing over $100,000 are actually growing pretty substantially. And those folks all got stimulus money. So they don't have money in their pockets, and they understand that the price of things go up. And as long as the value proposition is there, you took care during the pandemic and you can take care of them on an ongoing basis and you do well with that, they're willing to pay a higher price. It's like anything else, the brand proposition is about, is this price worth this brand. And you can always buy something cheaper. You can go to a lower quality apartment and get a less rent. But you don't get the Camden experience.

Rich Anderson -- SMBC -- Analyst

I didn't mean to put you on the defense, I was half joking but...

Ric Campo -- Chairman and Chief Executive Officer

That's OK, that's not defensive, that's just selling the brand.

Rich Anderson -- SMBC -- Analyst

Of the 14.6%, how much of that is rent. And the reason why I ask is when Alex mentioned 11% blended expected for the rest of this year, is that also fully baked in with fees and everything else? Or is that just pure rent? I'm just trying to get a direction off of that 14.6% that you started with in July.

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

Yes. So 11%, that is pure rent and the 14.6% blended rate that we're talking about, that is on a rental rate basis. We do pick up other fees and those other fees are growing slightly north of 3%.

Rich Anderson -- SMBC -- Analyst

Okay. Thanks very much.

Operator

Our next question comes from Rob Stevenson with Janney.

Rob Stevenson -- Janney -- Analyst

Good morning guys. Keith, I mean, it's hard to have underperformers when you're up 15% in July. But when you take a look at the markets, if you're forced to rank order them, what are the markets that are sort of toward the bottom on a relative basis performance-wise? And what differentiates them from the guys that are sort of a step-up from them these days?

Keith Oden -- Executive Vice Chairman

Well, the -- you rank on the just looking at the 14.6% blended rate and you just go down and stand out of the bottom, Houston is probably still at the bottom, but you're talking about instead of where it was in the first quarter or fourth quarter of last year, we're still basically flat to down maybe 2% from the beginning of 2020. Houston now has a substantial positive, and you're somewhere around 7% or 8% up in Houston. So it's -- if it weren't for the fact that the rest of the portfolio is producing as high as 20% trade out, everybody would be applauding the fact or we would be applauding the fact that Houston is at 7% or 8%. So yes, there's -- if you force it to be relative, there's always going to be somebody at the bottom that these are extraordinary growth rates in every single market that we're in.

Rob Stevenson -- Janney -- Analyst

And at the end of the day...

Ric Campo -- Chairman and Chief Executive Officer

I just would say that the worst market in those D.C. -- were D.C. proper, where there's a ban on any rental increase.

Rob Stevenson -- Janney -- Analyst

Okay. And then I mean, in terms of that, when you look at it, I mean, how much of the big jumps here are the removal of concessions versus so on its effective rate versus at the end of the day, pushing rental rate? Like where are the markets that you're pushing the market rate the most, and it's not part of it's the removal of concessions and/or the jump in occupancy that's driving the market performance?

Keith Oden -- Executive Vice Chairman

Rob, we don't use concessions. And the only time that we ever use any concession is on new developments, and that's part of -- it's just part of the marketing process and the expectation of residents. But outside of our development pipeline, we don't have any concessions across the ones portfolio. So it is pure rental increases.

Rob Stevenson -- Janney -- Analyst

Okay. And then, Alex, did you push a bunch of operating costs into the first half of the year? Curious as to how you go from 5.8% same-store expense growth in the first half to sort of the $375 million implied at the midpoint of guidance, how the back half sort of folds out for you?

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

Yes, absolutely. It's entirely based upon tax refund. So to give you the numbers, in 2020, we had about $2.3 million of tax refunds they entirely came in the first half of 2020. In 2021, we are anticipating the exact same number, $2.3 million of tax refunds entirely coming in the second half of the year. So it is just a timing issue around tax refunds.

Rob Stevenson -- Janney -- Analyst

Okay. Thanks guys, appreciate the time.

Operator

Our next question comes from Nick Joseph with Citi.

Nick Joseph -- Citi -- Analyst

Curious on the acquisition pipeline. How large do you expect Nashville to be in the near term?

Ric Campo -- Chairman and Chief Executive Officer

We'd like to get Nashville up to 3% or 4% in the near term. When you start looking at economies of scale and efficiencies, we really need to have 1,500, 2,000 apartments to actually get to that efficiency level. And so we definitely are going to be aggressive in Nashville and continue to push there.

Nick Joseph -- Citi -- Analyst

And then are there any other new markets that you may be entering over the next year or 2?

Ric Campo -- Chairman and Chief Executive Officer

Right now, we like our markets, and the interest in Nashville has been good so far. So we're pretty good with where we are today, so no.

Nick Joseph -- Citi -- Analyst

Thanks.

Operator

Our next question comes from Amanda Sweitzer with Baird.

Amanda Sweitzer -- Baird -- Analyst

Thanks, good morning. Can you provide a bit more of an update on your disposition timing? And where are you seeing buyer interest in pricing in a market like Houston relative to your prior expectations?

Ric Campo -- Chairman and Chief Executive Officer

Alex, go ahead and talk about timing.

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

Yes. So in our model, we are assuming that dispositions happen on November the first. We have two assets in Houston that just hit the market. We've got another two assets in TG County, which are going to hit the market next week. So it's a little bit early to sort of give any updates on pricing, although we certainly expect that we're going to do much better than the original strike prices we had when we first went out.

Keith Oden -- Executive Vice Chairman

Our conversations with the brokerage community around -- specifically around Houston, in the last 60 to 90 days, I think it's clear that the word is out that Houston rents are really, really accelerating hard. And so I think what they're telling us is it's a whole lot more interest just generally in Houston, as Alex said, we'll have to wait and see how it all plays out. But clearly, the improvement in Houston overall is going to be a positive for selling assets.

Amanda Sweitzer -- Baird -- Analyst

Yes, that's helpful. And then apologies if I missed it, but where do you stand in terms of receiving payments under the rent relief programs? Do you expect any payments? And how meaningful could potential evictions be in California for you once you're finally able to process them at this point?

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

So I'll sort of hit ERAP, which is just the payments that we're receiving grand total for us is we're right around $4.1 million year-to-date. And obviously, most of that came in the second quarter. So we're starting to get some traction we're finally starting to get some reasonable traction in California, although California is making up about 20% of our ERAP payments, that is about 70% of our delinquency. So we certainly have a ways to go there. And then the #2 market for us, which is interesting because it has one of the lowest delinquency levels at Houston, which is also right around 20% of our collections. So we don't have any assumptions -- any significant assumptions for ERAP payments coming in throughout the rest of the year. But as we talked about, we've got sort of an $11 million receivable. So obviously, we're going to keep working the process and hope to get some additional payments in.

Ric Campo -- Chairman and Chief Executive Officer

And of course, that $11 million receivable, I think we have reserved like $10 million of the $11 million, right, Alex?

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

That's correct.

Ric Campo -- Chairman and Chief Executive Officer

Yes. So we get payments, it will be upside, not downside. To your question about evictions in California. The thing that's really interesting to me about the whole debate over evitions. And I was watching CNBC or CNN or someone last night talking about 12 million residents in America are going to get evicted when the CDC moratorium comes off. And I think that there is a risk of massive evictions, but the risk is not in Camden's portfolio or any of the public company's portfolios. But if you look at our 70% of our receivables in California, those receivables are rent structures. Those receivables for people who know that you don't get -- there is no penalty for not paying Camden or anybody else to rent and 0 healthy. There's no light fees, there's no interest. There's nothing. And what -- and I also saw Gavin Newsom on the news last night as well, making the statement that if you haven't paid your rent for 12 months and you have a "COVID reason", the state of California is going to pay around. And so when people hear that, there's this confusion that if you owe rent for more than 12 months in California, the government is going to pay it.

But the bottom line is, is that the $45 billion of U.S. government allocation of money for renters has restrictions on. It has maintenance testing. It has a lot of restrictions. And those restrictions by the way, are wide that only about 10% or a little less than 10% of that money has never reached a resident yet in America. So our people driving cashless leasing $4,000 a month apartments in Hollywood who have $100,000 in cash in their bank account aren't going to get ERAP money. And the question will be ultimately what happens to them, right? We've reserved against it. And ultimately, those people are going to destroy their credit. And when they figure that out, maybe they'll take some of that money out of their bank account that they have and pay their rent.

It will be interesting to see. But at least for us, is not going to move the needle one way or another. Maybe all of a sudden, everybody in California pays the rent. We'll have a $5 million, $6 million or $7 million benefit. But it's not enough to move the needle. And we don't think ERAP going to be a big thing for us overall because our residents don't need the money. The money needs to go to people making or less and needs to go to people that are paying $500 to $900 a month and a part it's not 1,500 to 4,000. So that's my little soapbox for government at this point.

Keith Oden -- Executive Vice Chairman

Amanda, I would just add to that because I think it's an interesting always put these numbers into perspective. We get pretty -- we get probably more acute than it could probably -- it's a moral agitation, not a financial agitation. Certainly, I'm speaking for myself. But in our portfolio, we have out of our total 70,000 lesser miles apartments, we have 600 high delinquency residents. And our definition of that is there are three or more months behind on the rent. So it's 1% -- a little bit less than 1% of our total resident base. So it's not a huge in terms of numbers it charge. It's kind of big in terms of irritation, but -- and as Ric said, of that 600 high delinquency or high-balance delinquencies, we've written it all off anyway. So anyway, we're going to keep working the process and for the residents in our portfolio who are eligible, we're going to make sure that they get taken care of.

Amanda Sweitzer -- Baird -- Analyst

Thanks. That perspective was helpful, appreciate the commentary.

Operator

Our next question comes from Rich Hightower with Evercore.

Rich Hightower -- Evercore -- Analyst

Good morning guys. I wanted to get your take on the fact that a lot of your competitors are starting to expand into markets that are new for them, not so new for Camden. And what are the methods that you can employ to sort of maintain Camden's edge in owning and operating or even developing in those markets?

Ric Campo -- Chairman and Chief Executive Officer

Well, the good news is these are fast markets, right? They're big markets, multibillion-dollar market. So I would just say for years and years and years, we had to go to conferences and talk about how we thought the flyover parts of America are really good places to be. And that the coast were not necessarily our cup of tea. And I would tell you, our experience in Southern California, which is the best part of California when it comes to pro business and what have you, shows that during tough pandemic times, it was the right move from our perspective to stay in the flyover states. So with that said, the market's a big market, and we love competition. It's just -- we'll be able to then show just how good Camden's operating edge is against our other public company peers when they start reporting numbers in our markets. So we welcome to the market to them market its great friendly competition and come on down.

Keith Oden -- Executive Vice Chairman

Yes. I would just -- I would add to that, that the public companies where we compete with them, they make -- we all make the market better. I mean they all use revenue management. They are all smart. They raised rents when they should. The lowest common denominator in our business is still third-party managed assets that, frankly, probably aren't managed very well. So the more high-quality competition we have in the marketplace, the better we tend to do and the evidence of that is in the D.C. metro area where we've had -- we have significant presence at a moment and with a lot of competition and the other is in California. So it's steel, sharpened steel and bring it on.

Rich Hightower -- Evercore -- Analyst

Alright. Thanks for the thoughts.

Operator

Our next question comes from Brad Heffern with RBC Capital Markets.

Brad Heffern -- RBC Capital Markets -- Analyst

The $450 million in dispositions, can you just talk through the use of proceeds there just given obviously the Nashville acquisitions were already funded with the ATM?

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

Yes, absolutely. So we'll use those proceeds for additional acquisitions because if you think about the midpoint of our acquisitions, it's $450 million. And we've done $296 million, plus or minus. Additionally, we'll use those for our development pipeline. So at this point in time, we're spending a couple of hundred million dollars a year to fund developments as well as repositions, which were funding another couple of $50 million a year. So we've got plenty of really sort of accretive uses of the capital.

Brad Heffern -- RBC Capital Markets -- Analyst

Okay. Got it. And then just thinking about the 14%, 15% rent increases in July, like what do you think that looks like in 2022? Like next year, if we still see the same supply demand imbalance, are we going to see still significantly higher than normal rent increases? Or are people going to go, you just raised my rent 15% last year, I can't do it again kind of thing.

Ric Campo -- Chairman and Chief Executive Officer

Well, if you -- we're not going to get in the 2022 guidance, obviously. But -- If you look at some of our data providers like Ron Witten, he shows very strong 2022 as well, just the backdrop of reopening and continuing demand in the multifamily sector. So trees have to grow to the sky, obviously. And if you look at the long-term history of multifamily, usually, you have -- when you have -- when you come out of a big downturn, either a recession or pandemic, you have multiyear up legs. I think in 2010, what we told the market was that we would have the best -- the next three years would be the best revenue growth and operating fundamentals that we've had in our business history and that came true. That was through '11, '12 and '13 were the best operating fundamentals hit we've never seen in our business career because it was a snapback from, but not as big a snapback as the pandemic has been. But it was definitely a snapback.

So I would expect, based on the history and unless something dramatic happens, we have a black swan and delta virus, delta varian or something like that, that 2022 is going to a pretty good year. And as Keith said earlier, our residents are not RevPAR. They are paying 19% of their income for rent. So on average, if you go back to pre-financial prices, they were paying in the 20s. And so we are in an affordable market still. And if you look at our average rent, it's $1,500. And so -- or $1,500, $1,600. So with that said, there's a 15% increase sounds a lot like a lot, and it is. But on a relative basis to the income growth that we're seeing. And as long as you're giving the value proposition to the resident, they accept it.

Brad Heffern -- RBC Capital Markets -- Analyst

Okay. Thank you.

Operator

Our next question comes from Alexander Goldfarb with Piper Sandler.

Alexander Goldfarb -- Piper Sandler -- Analyst

Good morning. So two questions. First, if we hear you correctly, there's -- you didn't really have any concessions in the portfolio. So it's not like you're comping rents off of a really low base of last year. Yes, there's more population moving it down to the Sunbelt or to the free states, whichever terminology that people want to use, but that continues. But still, the mid-teens rent spreads that you guys are getting in the acceleration, is that -- and it -- just trying to understand that better. Is that just something that there's a ton of jobs or suddenly everyone who doubled up last year just wants to be back? It just seems like everything is great, but at the same time, the magnitude of that demand just seems incredible. So I'm just trying to understand because, again, it's not coming off of a really weak comp. It's like you guys were going 80 miles an hour and now you bugged up to 120 miles an hour, and which is a pretty strong increase for a rate that was already going at a good rate down the highway.

Ric Campo -- Chairman and Chief Executive Officer

Yes. The way I look at it is this, and we've had this debate in-house and talked to data providers like Ron and others. And what we kind of settle in on is this -- is that you have -- you had -- if you think about what happened pre-pandemic, we're having the best quarter that we ever -- that we had in a long time. We have positive second derivatives in most of our markets, except Houston in terms of revenue growth. And we were looking at 2020 as being a kind of a step-up in growth year from a sort of also ran years in '18, '19. So with that said, that demand just shut down, right? It was really good demand coming in the door and that shut down. And during that period, too, if you look at some of the demographic numbers, we still had one million people that were -- that should have been in the rental market that were not in the rental market. when you look at the millennials that are either doubled up or living at home or whatever, that was at the beginning of 2020.

So all that demand is shut down. And then if you think about demand in 2020 any new demand that would have come like a migration or even people graduating from college or just coming into the marketplace in 2020 didn't happen. And then all of a sudden, you look in 2021, you have vaccines come into play, the masking goes away and these places open up. So you now have 2019 demand coming to the market, 2020 demand coming into the market and 2021 demand company to the market, all at the same time when the light switch went off at the beginning of -- or maybe in the middle to the end of May. And so with that, you've got -- you just have people who are probably podded up with people they didn't necessarily want to be with, and they have plenty of money in their pocket through stimulus and job increases and all that. And they're all hitting the entrance at the same time, causing occupancies to spike and that therefore, rents the spike as well.

Keith Oden -- Executive Vice Chairman

So Alex, the only thing I would add to it is I think -- I wouldn't think of it as trying to explain 16% and how that works in the first six months of 2021. And because if you think about it in 2020, we were on track when COVID hit. We were going to blow our budgets away, and we were budgeting up 5% or 6% on top line revenue growth. And we're going to kill those. And then COVID hits, and it goes to 0. We froze rents. We froze renewals. So we missed an entire year of rental increases in slotted our residents. And so I think we probably would have ended at 6% to 7% and in 2020 ex-COVID. So some of the 16 is just a clawback of the rental increases that we didn't achieve in 2020, specifically because of COVID. And if you lift that away, now you're trying to explain 9%, 10%, which is still a crazy number, but we've seen that before. We've seen 9%, 10% top line rental growth coming out of the great financial crisis. and going back to the tech rack. So that level is not unprecedented in our world, but I think it's probably a better way to look at it.

Alexander Goldfarb -- Piper Sandler -- Analyst

And so what you were saying earlier about this spilling into next year, just means that was basically three years' worth of demand this year, it's going to take into next year to at least satisfy that?

Ric Campo -- Chairman and Chief Executive Officer

I think that's what our data providers are saying, yes.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. Second question...

Ric Campo -- Chairman and Chief Executive Officer

And that's [Indecipherable]. It's not a onetime shot. Usually, it's a methodical process.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. Second question is, obviously, a lot of new competition, a lot of new entrants coming down to the Sunbelt to your markets. But I was sort of curious, you said the development spreads are at the widest they've been. We do hear that in industrial, but apartments, I'm a little surprised just given land costs, shortage of labor, materials appliances, all the fun stuff. So do you believe that going forward, you're still going to maintain that really wide spread to development and the five yields on new stuff or those comments were more on existing projects. But on a go-forward basis, those yields are likely to temper maybe to five or something like that.

Ric Campo -- Chairman and Chief Executive Officer

Well, I think our -- I said on our $720 million that we have in our pipeline, that our development yields are in the low to mid-5s. And I think we're going to maintain those. And we might even do better because of revenue because revenue growth is so strong in these markets that our revenue projections will probably more than offset cost increases. With -- in terms of spreads, the reason the development spread is so high today is not that the yields have gone up. It's that the weighted average cost of capital has gone down and cap rates have gone down, right? So if you're a merchant builder, you're budgeting a 150 basis point positive spread on your development, which is more a normal spread on development then -- and you look at it today, and you're selling less at a 5.5 -- at a 3.5 cap rate or a 3.25 cap rate, you've increased your spread. And it's primarily been driven down by the compression of cap rates. And when I talk about our spread being wide, it's because our partially, we are doing better on some of our developments from a yield perspective. But mostly, it's being driven down by our lower weighted average cost of capital. And so that's where the spread is has been going down. I think that it is still difficult to buy land today and to make the numbers work. But when you look at them -- the supply numbers, I mean, there's at least 400,000 units or 350,000 to 400,000 units that are getting sort of permanent every year that are making their numbers work.

Alexander Goldfarb -- Piper Sandler -- Analyst

Okay. Okay. Thank you Ric.

Operator

Our next question comes from Austin Wurschmidt with KeyBanc Capital Markets.

Austin Wurschmidt -- KeyBanc Capital Markets -- Analyst

You've historically talked about jobs to completions as a barometer of strength and fundamentals. So I'm curious what your revised outlook for this year is? And certainly, it sounds like jobs alone isn't really enough to explain some of the strength. But can you give us that figure? And then also what ratio kind of the third-party forecasts are projecting for next year?

Keith Oden -- Executive Vice Chairman

Yes. So the -- in terms of total supply deliveries in Camden's markets over the next -- in 2021, it's going to be about 160,000 apartments over the entire footprint. That's roughly in line with what it was last year. And then if you look at Ron Witten's work in 2022, we still end up with something around the $165,000 unit range in terms of deliveries. Job growth is -- if you look at the numbers this year, it makes complete sense in terms of the ratio. In fact, it looks pretty bullish. You get numbers like seven to one on the 165 deliveries. But the thing that -- I think it doesn't make a lot of sense to think of it that way just for 2021. You almost have to go back and look at mash 2020 where the job losses occurred and then add to it the recovery. We're still -- in many of our markets, we're still not back to the employment levels that we were going into the pandemic. And yet, here we are with the kind of demand that we've seen. And I think it's all the reasons that Ric talked about earlier in terms of just releasing a lot of pent-up demand. But if you look at traditional numbers, you can -- you would look at 2021 and 2022 and say, these numbers look really bullish overall. I think you got to temper that by the losses in 2020.

Austin Wurschmidt -- KeyBanc Capital Markets -- Analyst

That's helpful. And then with everything that you guys are talking about on the development side and the spreads and attractive cost of capital. I mean it seems like developers might be licking their lips a bit. So really, where are you seeing the most activity from a permitting perspective or shovels in the ground that could move that supply and demand more toward equilibrium as you look maybe two, three years out?

Ric Campo -- Chairman and Chief Executive Officer

I guess it's complicated looking two, three years out because for the last years, we looked out a year or two and said, well, supply is peaking and because of either cost pressure or banking pressure or whatever, and it's never peaked, right? It continues to make its way up. So I think that -- and the last numbers I saw from [Indecipherable] shows, starts coming down in 2023, 2024. And I think that this is the time in the world where it's really hard to figure out what's going to happen a year from now or two years from now. I know that how is the ultimate tapering and the great experiment of massive fiscal and monetary policy, when that turns around, what's going to happen and how is that going to affect everything. And I don't think any of us know. That's why we want to be conservative in our business going forward. But at least from now, I don't -- every market is at peak supply. And it doesn't seem to matter from an occupancy or a revenue growth perspective.

It will matter at some point when if we go into other job slowdown or another recession. Obviously, that's when the world that's when things change, and we'll just have to see. But right now, but at least the next months to 24 months, things looks like that supply is not going to abate. It's going to continue to be pretty much high in every market. You have some markets that are higher than others like Nashville and Austin, but then you look at the rent trade out in Austin and Nashville today and it's at the high -- some of the highest rent trade-offs we have in the market. So I don't know if the answer ultimately, but we'll obviously have to wait and see.

Keith Oden -- Executive Vice Chairman

Austin, RealPage is our provider for permit data. The permit data is the most -- I'll say the least precise or reliable just because you're sort of forecasting behavior into the future. But they're on their numbers, they've got permitting activity of 170,000 apartments in our markets this year and 169,000 next year. So again, elevated activity, but I don't think -- I don't think these numbers reflect the most recent compression in cap rates, and they probably don't reflect the real updated cost numbers. So we're still in a race between cap rate compression and cost to build.

Austin Wurschmidt -- KeyBanc Capital Markets -- Analyst

Got it. Appreciate the thoughts guys, thank you.

Operator

Our next question comes from John Pawlowski with Green Street.

John Pawlowski -- Green Street -- Analyst

Just one quick question for me. A few months ago, obviously, your cost of capital was a little bit different. So just curious how you thought through issuing equity versus selling a building or two?

Ric Campo -- Chairman and Chief Executive Officer

Sure. So as I said earlier, the cost of capital has come down. And when we think about our capital structure, we think about our debt-to-EBITDA being between five times and four times. And it seemed opportune. We're going to issue equity when it's at all-time high prices, and it was at the time that we issued. And the challenge with issuing equity oftentimes is that -- and when you decide to do it relates to blackout periods and those kinds of things because we don't have the flexibility that most regular investors do in terms of buying and selling because of the blackout. And so we're blacked out 42% of the time in order to execute transactions like that. We will continue to recycle capital. So it's not a -- to me, it's not a one choice to either issue stock or you issue debt or you sell assets. It's a combination of those three things that produce capital. And ultimately, over the long term, you have to layer in all three of those activities.

We all know we have $100 million roughly free cash flow. And on a $16 billion company, it's hard to grow the company with $100 million a year. So the only way you can grow the asset base is to use your equity or debt issuance. And on balance, the question of whether we sell assets or issuing equity relates to what is the weighted average cost of capital and what does that look like on a long-term basis. And when your weighted average cost of capital is mid-4s, and you can put acquisitions on your books at 6% or better, you should do that. We are going to continue to recycle capital through sales of properties and acquiring other properties. But when the capital markets are conducive to putting long-term accretive transactions on the books like we have done in Nashville. That's the time that we issue equity.

John Pawlowski -- Green Street -- Analyst

I understand putting assets on the book and developing given the cost of capital. But for the better part of last year, the transaction market color you've been sharing is signaling a pretty sizable NAV discount not today, but several months ago. So just felt like selling assets or a cheaper source of funds than your common stock.

Ric Campo -- Chairman and Chief Executive Officer

Yes. I think with cap rate compression, the way it is, and that's why we're selling assets. We put up $450 million budget together at the beginning of the year to sell and $450 million to acquire. And that's when our stock price was $95 a share at the beginning of the year, and the weighted average cost of capital was north of 5%. So things changed and the world capital mortgage changed between the first of the year and now, and we made the decision to issue equity along with that existing program. So I mean, it's always -- hindsight is always perfect, right? And I would have -- last year, when the stock was 62, if we could have executed a massive sale of assets at a low cap rate and bought the stock that would have an opportune. But unfortunately, it didn't stay there that long. And this complication of not being able to execute 100% of the time makes it more difficult to do both of those kinds of transactions, both on the buy and sell.

John Pawlowski -- Green Street -- Analyst

Okay. Understood, thank you.

Operator

Our next question comes from Joshua Dennerlein with Bank of America.

Joshua Dennerlein -- Bank of America -- Analyst

I hope everyone is doing well. Just kind of curious on how you're thinking about kind of leasing season as we head into the fall, it just seems like it's going to go on for longer than expected and whether or not that influences your decision to kind of push rate a lot harder than you normally would at this time of the year?

Keith Oden -- Executive Vice Chairman

Yes. I think that the -- if you think about our revenue management system, YieldStar is a forward-looking tool and it's all -- it's really basing its most of its calculations on using the levers, which is primarily price and looking out 90 to 120 days. So the pricing that is being recommended by YieldStar both on renewals and new leases. And we're very disciplined around our revenue management system, 95% of the recommendations we take, and it's rare that we have an exception to the recommended yield star rate. So what that tells me is you'll start thinks the market clearing price that will maintain our occupancy rate north of 96% is 16% increases looking out 120 days. So that's -- YieldStar will continue to push as long as the conditions on the ground permitted.

Joshua Dennerlein -- Bank of America -- Analyst

Okay. And just curious, is there kind of any tweaks you have to make for next year just given just the change in seasonality or just the revenue management system just kind of automatically adjust for that?

Keith Oden -- Executive Vice Chairman

No. The revenue management system is -- the tweaks that we make are around sustainable occupancy levels occasionally, we tweak it up or down and then you'll start us the price to make that happen over a period of time, very small adjustments, but over a -- looking out 120 days. So the good thing about YieldStar is you don't have to be able to do that calculus or have your property managers do any calculus around what's the market clearing price 120 days out, that's what YieldStar does.

Joshua Dennerlein -- Bank of America -- Analyst

Got it. Thanks guys.

Operator

Our next question comes from Haendel St. Juste with Mizuho.

Haendel St. Juste -- Mizuho -- Analyst

I know it's been a very long call. Just a follow-up on the last question. I wanted to better understand the lease expiration schedule, I guess, the next couple of quarters, how that's been impacted by all the leasing that's been done and the COVID disruption and how that's playing into your thinking about the sustained strength above revenue growth near term?

Keith Oden -- Executive Vice Chairman

Yes, there's always seasonality in our rent roll, but it's not dramatic, but it's -- so fourth quarter and first quarter are always -- we have fewer transaction, fewer occupancy vacancies come available just because there's less traffic in most of our markets. But it's not dramatic. It's a couple of percent flip-flop between first and fourth and secondary quarters. And that's -- again, that's -- within the YieldStar model, it calculates that and maintain those exposure levels at optimized rates.

Haendel St. Juste -- Mizuho -- Analyst

No, I understand that, but I just wanted to better understand if there's anything about the number of units coming available that was madly different in the next couple of quarters than, say, prior years during the same period.

Keith Oden -- Executive Vice Chairman

Yeah I don't think so.

Haendel St. Juste -- Mizuho -- Analyst

Okay. And then the other question I had was, I guess, you've been pushing rate incurring a bit more turnover, Curious to your sensitivity there on incurring a bit more turnover, how much would you be willing or I guess, comfortable to incur. And you're also pushing renewals more and more aggressively. I'm wondering how much more you think you can push renewals here in any municipalities or regions like, say, D.C., California, there's a bit more sensitivity to pushing as aggressively in other parts of your portfolio?

Keith Oden -- Executive Vice Chairman

Well, in D.C. proper, we can't increase rent. So we were effectively frozen for rental increases in D.C. proper. In California, there's some recent legislation around rent control, but it's -- when you dig into it, it's CPI plus 6%, plus or minus. And in most cases out there, we're not impacted by that. So again, all of the math around recommended rental increases, it's not like we it's not like we sit around and do what we think we feel like we should be doing for rental increases. It's all driven by the metrics within YieldStar, and we take those recommendations.

Haendel St. Juste -- Mizuho -- Analyst

Okay good enough. Thank you. Appreciate the time.

Operator

This concludes our question-and-answer session. I'd like to turn the call back over to Ric Campo for any closing remarks.

Ric Campo -- Chairman and Chief Executive Officer

Okay. Great. Well, we appreciate you being on the call today. Those of you who are left, sorry, it went so long, but we try to answer all questions. If we didn't get to something on your list, we're available. So please give us a call or email Kim or call Kim, we'll get back to you. Thank you very much, and we'll talk to you next quarter or when the conference season starts after Labor Day. So take care, thanks.

Keith Oden -- Executive Vice Chairman

Take care, bye.

Operator

[Operator Closing Remarks]

Duration: 77 minutes

Call participants:

Kim Callahan -- Senior Vice President of Investor Relations

Ric Campo -- Chairman and Chief Executive Officer

Keith Oden -- Executive Vice Chairman

Alex Jessett -- Executive Vice President, Chief Financial Officer & Assistant Secretary

John Kim -- BMO Capital Markets -- Analyst

Neil Malkin -- Capital One Securities -- Analyst

Rich Anderson -- SMBC -- Analyst

Rob Stevenson -- Janney -- Analyst

Nick Joseph -- Citi -- Analyst

Amanda Sweitzer -- Baird -- Analyst

Rich Hightower -- Evercore -- Analyst

Brad Heffern -- RBC Capital Markets -- Analyst

Alexander Goldfarb -- Piper Sandler -- Analyst

Austin Wurschmidt -- KeyBanc Capital Markets -- Analyst

John Pawlowski -- Green Street -- Analyst

Joshua Dennerlein -- Bank of America -- Analyst

Haendel St. Juste -- Mizuho -- Analyst

More CPT analysis

All earnings call transcripts