CORRESPONDENCE - WS-1 OPPOSITION

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While the fundamentals remain strong for investors, there are signs that rental markets are at a turning point. Real rents are still climbing, but at a slower pace now that vacancy rates are ticking up. Returns to rental property investors remain healthy, but the influx of high-end supply has begun to dampen financial performance in many prime urban locations. Meanwhile, conditions in the vastly undersupplied low-cost segment continue to be extremely tight. RENTAL HOUSING'S ROLE IN THE ECONOMY Rental housing is an increasingly important contributor to the US economy. According to Bureau of Economic Analysis estimates, households spent $519 billion on rent alone last year, accounting for 2.8 percent of GDP in 2016—up substantially from the 2.2 percent share averaged during the boom years of the 2000s, Indeed, renters' real aggregate housing expenditures climbed a strong 3.2 percent annually in 2006-2016, and drove 58 percent of the growth in domes- tic personal housing consumption over the decade. With the sustained strength of rental demand and sluggish recovery in single-family construction, over a third of housing starts are now intended for the rental market. This is a larger share than in any year since 1974. Before the recent run-up in multifamily construction, rentals accounted for only about one in five new homes started in a single year. Among multifamily properties, the share of starts intend- ed for the rental market was 93 percent in 2016. Among single-family homes, 4.9 percent are now being built as rentals, significantly higher than the 2.2 percent share averaged in the 1980s and 1990s. Investments in new multifamily housing have also helped to drive the economy. The multifamily share of private domestic investment in new permanent residential structures grew from just 11 percent in 2000 to nearly 20 percent in 2016. The Census Bureau estimates that the value of private multifamily construction put in place (including labor, materials, soft costs, taxes, and profits) exceeded $62 billion in the 12 months ending in August 2017, similar to multi- family activity near the peak of the housing boom. In sharp contrast, the value of new single-family construction remained nearly 50 percent below the 2006 peak. ROBUST GROWTH IN RENTAL SUPPLY Unprecedented growth in renter households—totaling nearly 10 million between 2006 and 2016fueledone of the fastest rental construction recoveries in history. After hitting a low of just 90,000 units in early 2010, the number of rental housing starts peaked at a 408,000 unit annual rate in early 2017. While this represents the highest volume in any four -quarter period since the late 1980s,