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Expand chart
Reproduced from NMHC; Map: Axios Visuals

California Gov. Gavin Newsom yesterday signed legislation capping annual rent increases at 5% a year plus inflation for the next decade.

Why it matters: California is the third state this year to pass major renter protections in response to sky-high housing costs, a surge of homelessness in major cities and an outcry from residents who feel they are at the mercy of greedy landlords.

  • New York State lawmakers increased rent controls in New York City just before they expired, and allowed other towns to do the same.
  • Oregon made big news in March when it became the first state to impose a statewide permanent rent cap of 7% a year plus inflation.
  • In California, Newsom also signed legislation Tuesday that prohibits landlords from rejecting prospective tenants because they have Section 8 housing vouchers.

San Francisco and Los Angeles — where buying a house is increasingly out of reach and residents feel priced out of many rental properties as well — have become embodiments of a national housing crisis.

  • President Trump has repeatedly ripped into San Francisco for the rapid rise of homelessness, last week referring to it as a "tent city."
  • Nationwide, more than 21 million households (about half of American renters) spend more than 30% of income on housing — a threshold that HUD determines to be a high-cost burden.
  • Newsom said rent caps are an important first step in addressing the high cost of housing, but more needs to be done. “We need to build more damn housing,” he said.

The other side: Most economists and property investors loathe rent control, arguing that it stops new construction and discourages landlords from maintaining their properties, causing an already tight supply to deteriorate.

  • "The bill represents the implementation of a failed policy that does nothing to increase the supply of housing affordable to all income levels," said National Apartment Association CEO Robert Pinnegar.
  • "It is no coincidence that three of the nation’s most expensive places to live, including San Francisco, New York and D.C., continue to grapple with housing affordability despite their long-standing rent control ordinances," he continued.

Between the lines: Plenty of academic research over the past three decades shows long-term problems associated with rent control, and local leaders tend to avoid interfering with private property issues.

  • But ridiculous rents mean unhappy constituents. Valuable workers flee to cheaper cities. People end up living on the streets. Rent control is a relatively quick way for lawmakers to take action as tensions rise.

Go deeper: Curbed LA has more details about the new law, including its exemptions.

Go deeper

Biden to sign 15 executive actions on Day One

President-elect Joe Biden. Photo: SAUL LOEB/AFP via Getty Images

President-elect Joe Biden is expected to sign 15 executive actions upon taking office Wednesday, immediately reversing key Trump administration policies.

Why it matters: The 15 actions — aimed at issues like climate change and immigration — mark more drastic immediate steps compared with the two day-one actions from Biden's four predecessors combined, according to incoming White House press secretary Jen Psaki.

Off the Rails

Episode 7: Trump turns on Pence

Photo illustration: Eniola Odetunde/Axios. Photos: Elijah Nouvelage, Alex Wong/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 7: Trump turns on Pence. Trump believes the vice president can solve all his problems by simply refusing to certify the Electoral College results. It's a simple test of loyalty: Trump or the U.S. Constitution.

"The end is coming, Donald."

The male voice in the TV ad boomed through the White House residence during "Fox & Friends" commercial breaks. Over and over and over. "The end is coming, Donald. ... On Jan. 6, Mike Pence will put the nail in your political coffin."

Big Tech's post-riot reckoning

Photo illustration: Sarah Grillo/Axios. Photo: Tasos Katopodis/Getty Images

The Capitol insurrection means the anti-tech talk in Washington is more likely to lead to action, since it's ever clearer that the attack was planned, at least in part, on social media.

Why it matters: The big platforms may have hoped they'd move to D.C.'s back burner, with the Hill focused on the Biden agenda and the pandemic out of control. But now, there'll be no escaping harsh scrutiny.