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Democrats could do a lot better with the power they hold

More than half of Americans live in states with Democratic governors. Many are poorly run

Photograph: Getty Images

Photograph: Getty Images

THE VIDEO of Brad Lander getting slammed against a wall and arrested by federal immigration agents shocked New Yorkers, who are not easily shocked. On June 17th the mild-mannered city comptroller had been attempting to escort a migrant through a federal building in Manhattan as agents tried to detain the man. “It’s bullshit,” said Kathy Hochul, the Democratic governor of New York, of Mr Lander’s arrest. It came a week before a crowded Democratic primary for New York City mayor, in which the city comptroller is a candidate. The arrest may well help his campaign, but it marked yet another skirmish over immigration with Donald Trump’s administration. It is just the latest escalation in a confrontation with cities and states that did not vote for the president, on a topic where the public supports him most.

Mr Trump’s administration has tried to withhold funding from some states whose governors, like Janet Mills of Maine, have personally annoyed him. He is now promising to target ICE raids primarily at Democratic cities like New York, Los Angeles and Chicago. Democratic voters clearly want their rudderless party to resist Mr Trump but, beyond getting arrested, it is not clear how they should proceed.

One answer would be to provide a credible alternative of strong government in the places they control. Democrats may be out of power in Washington, but just over half of Americans live in states with Democratic governors. All but three of the country’s 30 largest cities have Democratic mayors. Last year Mr Trump’s vote share in big cities surged—in Chicago it nearly doubled, from 15% in 2020 to 22%; in New York City it went from 23% to 30%. That reflects frustration with Democratic governance, and with a surge of migrants who arrived during Joe Biden’s presidency, putting pressure on cities. The best rebuke to the president would be for Democrats to make the places they govern work.

In each of the big cities in states run by Democrats the problems are similar. The cost of living is enormous, in large part thanks to housing shortages built up over decades. Taxes are high, and yet services are often poor. Infrastructure is shoddy. Politics often seems to be more about sharing the loot between special-interest groups than about serving the public. Federal stimulus, in the form of covid-19 relief money, is running out, and few places have worked out how to replace it. And this is all before the problems that Mr Trump’s vengeance campaign may create.

One encouraging change is that a number of mayors realise how serious the problem is and are determined to make changes. “Families flee San Francisco for three reasons,” says Daniel Lurie, San Francisco’s reformist mayor: “safety, affordability and our public schools”. Mr Lurie, a philanthropist who was elected last year, is one of a clutch of centrist Democrats determined to break with the party’s traditional clientalist politics. The list includes Mike Johnston, the mayor of Denver; Mike Duggan, the mayor of Detroit; and a few others.

The biggest problem Democratic cities face is that high taxes and a high cost of living have not correlated with excellent services. In San Francisco the city government spends $1.1bn per year tackling homelessness and yet has a homelessness rate 12 times the national average. In Chicago total spending on schools passed $34,000 per pupil last year, compared with a national average of $20,000, but scores in reading and mathematics have plunged over the past decade. These costs have been inflated by keeping open near-empty schools that nobody wants to close for political reasons. The city’s schools have roughly 50% more capacity than needed. In New York cities and the state collect around $13,000 per person in local taxes, almost twice the average state.

Residents have an easy way to express their dissatisfaction: They can move. Between 2019 and 2024, Americans moved 162m times, according to postal-code data from Melissa, a location-data firm. These address changes offer a close, though imperfect, proxy for migration trends. During that period roughly 750,000 more people moved into Florida than left; Texas followed with 550,000, and South Carolina with 450,000. The loser states were the big three Democratic ones: roughly 1.25m more people left California than moved into it; New York followed with 1m, and Illinois with 450,000.

 

 

Life in Phoenix, where temperatures are over 90 degrees Fahrenheit (32C) for 190 days a year, is rarely idealised by films or TV shows as New York City is. But it has several advantages. Housing is cheaper. There is little public transport, but new residents can zip around in their own cars on new wide roads. And Arizona’s income tax is just 2.5%; the total burden of taxation is just 9.5% of state net product, compared with 16% in New York. And though the murder rate is a lot higher in Phoenix than it is in New York City, most residents will see less disorder and poverty in their sprawling neighbourhoods.

For Democrats nationally, there are worrying potential consequences of this migration. The Economist’s analysis of zip-code-level data shows that Americans typically move to districts governed by the same party as the one they left. But when they do cross partisan lines, they are significantly more likely to move from a Democratic-governed area to a Republican one than the reverse. Democrats are anxious about what this might mean at the ballot box. After the last census in 2020, Illinois, California and New York each lost one congressional seat, thanks to their relatively anaemic population growth. Texas and Florida both gained seats.

 

 

People still want to live in places like San Francisco, New York and Chicago. Judged by measures like life expectancy, states that vote for Democrats continue to do better than those that vote for Republicans. High rents are evidence that the demand to live in places like New York or San Francisco remains high. One of the best things they could do is build more housing. Analysis by The Economist finds that safely Republican states consistently approve the most housing. Deeply Democratic places approve the least.

 

Chart: The Economist

 

So why not fix it? In America power is diffuse. This affects big cities more than it does sparsely populated places. In Los Angeles County 10m people live in 88 different cities, with populations ranging from 30,000 to almost 4m. Power is shared between hundreds of different politicians. Cook County in Illinois, which has 133 individual cities as well as Chicago, makes even LA’s governance look coherent. The whole state of Illinois has 8,500 units of government. Even New York City must fight with Albany to implement policies.

That makes getting anything done tricky, because there are so many veto points and collective-action problems. This is why fixing the housing problem in California is so difficult. While the state recognises the need for more housing, most local politicians would also prefer it go somewhere else. “LA is just incredibly strange, convoluted and decentralised,” says Chris Elmendorf, a housing-law expert at the University of California, Davis. “They have a constellation of local interest groups that are super-powerful that don’t want new housing in their areas.”

When budgets are large and power is spread among so many politicians, special- interest groups can more easily inject their own costly measures into law. In New York City for example, installing a lift in a building costs on average $158,000, compared with $36,000 in Switzerland, according to Stephen Smith of the Centre for Building in North America, a think-tank. Laws require American lifts to be large enough to carry a stretcher, raising costs. The workers who install them are expensively licensed, through apprenticeships run by closed-shop trade unions. In California the law requires construction workers on public projects to be paid the prevailing wage. This means that the state has to maintain a database of wages and enforce them. A sheet-metal worker in Los Angeles must be paid $90.48 per hour, including benefits. For a 35-hour week, that is equivalent to $165,000 per year.

 

Cost, elevated

In Chicago work will soon start on an extension of the Red Line, part of the “elevated” train system some six miles into the southern suburbs of the city. It is now expected to cost almost $1bn per mile, for an above-ground track going mostly through sprawl. Contrast that with the driverless 5.7km (3.5-mile) M4 Metro extension in Copenhagen, which opened last year at a total cost of 10bn Danish krone, or $1.5bn, despite several of its stations being underground. Worse still is California’s high-speed rail system, which was meant to connect San Francisco to Los Angeles but seems unlikely to ever reach either city, despite nearly $14bn of spending so far.

Indeed, the power of public-sector and trade unions adds to costs across the board. San Francisco’s budget has increased by 46% over the past decade. In 2023 nearly half the budget was devoted to paying its own employees. An analysis from the San Francisco Chronicle found that the city had more employees per resident than any other large county in America. In Chicago Mayor Brandon Johnson negotiated a deal with the city’s teachers’ union that will increase spending on schools by $1.5bn. This was less than some feared it might cost. This is despite the fact that Chicago has a colossal deficit.

Even cheap policies get bogged down by resource fights. Congestion pricing in New York is a good example. Last summer, New York’s transit workers’ union, which had initially lobbied for the policy, came out against it, saying they needed more upfront investment in transport. The logic for this sort of brinkmanship is simple: if a project is happening, holding out support can let you extract more benefits for yourself. The result is that many projects do not happen at all.

Lots of government improvements will cost money or time. And overcoming union power will not be easy. Allowing more housing construction, though, is a free reform. Contrast cities like New York or San Francisco with Republican-run states and the failure is evident. In Texas in May the state passed a law legalising the construction of apartment buildings with just one staircase, as opposed to the two usually mandated elsewhere in America (but not in other countries). That follows a decision by the city of Austin (which is run by Democrats) to rezone in 2023.

Can Democrats change? Housing gives reason for hope. The state of California has passed dozens of pro-housing laws, imposing strict targets on local governments and chipping away at the many regulations that give leverage to unions and community-interest groups to stop development. These may at last be beginning to bite. In February Cambridge, Massachusetts, another expensive NIMBYish place, abolished single-family zoning, which banned developers from building apartments. It follows the example of Minneapolis, another city run by a centrist Democratic mayor, Jacob Frey, which started zoning reform in 2020. The city has seen enormous amounts of housing built, and falling rents too.

 

Chart: The Economist
Chart: The Economist

 

 

The challenge will be breaking out of the old model of governance. In New York City, neither of the two leading mayoral candidates offers much hope for change. One wants to apply “prevailing-wage” rules to more housing construction, which would make the housing problem worse, and tighten rent control, which would hurt investment. His proposals to make New York more affordable include expensive gimmicks like making buses free and creating city-run supermarkets. The other has a housing plan that seems to have been written by ChatGPT. The most Yimby-friendly candidate is Mr Lander, who has an urban-planning degree. But polls taken before his arrest gave him little chance.

Tight budgets will not make things easy. San Francisco has a deficit of $800m and city hall is bracing for layoffs. “We have to tighten our belts,” admits Mr Lurie. The end of covid-19 relief spending is crunching schools and public-transport budgets all over the country. Yet in some ways that makes the case for change stronger. Without it, the risks are high. From the 1950s to the 1990s, an era of lower immigration, America’s big cities declined in population. New York City lost almost 2m residents from 1960 to 1990. Only then did reform begin to materialise. Some Democrats fear that for real change to come to America’s biggest cities, it may take a radical shock. With Donald Trump, a shock is what they are getting. 

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Author: CHICAGO, NEW YORK AND SAN FRANCISCO

Source: The Economist

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