What will the midterm results mean for America’s cities?
Americans from both parties continue to draw differing meanings from Democrats’ drubbing of Republicans in the midterm elections. The conclusions obviously center on the role of President Donald Trump and his national policies including tariffs, the Iran war, gas prices and immigration. The media have understandably focused on the new makeup of Congress, where Democrats will hold around 260 House seats and 54-56 Senate seats.
The Capitol’s new partisan dynamic will have some bearing on urban policy. However, the election’s real impact on cities centers on the composition in state Capitols. “Democrats made huge gains Tuesday in statehouse races across the U.S., flipping a dozen legislative chambers and gaining full control in six states,” noted The Wall Street Journal. “[L]egislatures play an increasing role in Americans’ daily lives, setting policy in areas such as education, healthcare, labor, abortion and gun laws.”
That is how policy should be determined in our federalist system, where the governments closest to the people have an outsized role in making determinations about, say, housing and transportation policy. Some broad conclusions are obvious. Democrats, who tend to dominate in urbanized areas, will naturally be more interested in urban policy than Republicans, who are more focused on suburban and rural concerns. Democrats are more likely to support higher housing subsidies and other government-focused solutions to urban problems.
Beyond that, however, there’s a lot of uncertainty and internal disagreement within the parties. In California, for instance, YIMBY(Yes In My Back Yard) Democrats have led the charge for loosening regulations for certain types of housing construction. Republicans often have resisted those efforts. Nevertheless, many Democrats have also resisted these housing reforms and some Republicans have supported them, so reading the tea leaves is not entirely a matter of looking at the number of Ds v. Rs in state legislatures.
On the plus side, there are plenty of areas for bipartisan policymaking on issues including homelessness, housing affordability, crime and transportation. After the dust clears we might see a reduction in culture-war bravado and increase in productive legislating. Even during Trump’s first term we saw a growing bipartisan consensus for certain types of criminal-justice reform. It largely evaporated as the parties catered to their respective echo chambers, but the policy framework remains.
On the negative side, Republicans have pioneered noteworthy state-level reforms in the area of education. And those could vanish. For instance, Texas Gov.-elect Gina Hinojosa has signaled her plan to back away from the state’s education voucher system. Victories of union-backed state legislative candidates in Texas and elsewhere suggest that school-choice experiments are facing tough going.
Affordability issues were front and center in the midterms, which should drive housing policy as housing prices remain stubbornly high in most major cities. In July, the president signed the bipartisan ROAD to Housing Act, which (mostly) reduces federal regulations that restrict housing construction. What’s next from Congress?
Prior to the election, “Republicans have said they want to see reforms to the housing finance system. These rules, they’ve said, have discouraged banks and financial institutions from infusing money into the housing market,” per Realtor.com. It quoted the chairman of the House Housing and Insurance Subcommittee, who called for prevailing-wage exemptions for single-family home construction. Democrats have been mainly calling for additional federal subsidies for affordable housing programs. Given Tuesday’s results, it’s easy to predict which policies will prevail.
At the state level, Californians rejected, 56% to 43%, Proposition 45, a Chamber of Commerce-sponsored initiative that would have provided broad reforms to the California Environmental Quality Act (CEQA) by speeding up the approval process on “essential” projects, including housing. Lawmakers have passed many bills that have streamlined CEQA on a piecemeal basis. But the “no” campaign successfully convinced voters that its passage would greenlight polluting factories and data centers.
Voters did approve, 61% to 39%, Proposition 1, an $11.25-billion housing bond that will pay for subsidized projects and is unlikely to make any dent in California’s housing-affordability crisis. Housing Finance reported that several other states and cities likewise approved housing bonds on Tuesday. Expect that approach to become more popular following the partisan shift.
The transit status quo is another likely winner from Tuesday’s results. As The Guardian reported, “Voters in the San FranciscoBay Area overwhelmingly approved two transit measures this week that advocates hope will save the region’s financially distressed public transit agencies from a potential death spiral.” One boosted sales taxes in five Bay Area counties to fund transit and the other created a parcel tax in San Francisco to raise revenues for the Muni system.
Although transit is important in that region, the systems’ push for taxes to bail out their endless financial problems will only delay the day of reckoning — and will keep Bay Area officials from grappling with the poor service that’s a root cause of declining ridership. The systems had threatened massive service cuts if voters didn’t comply. Streetsblog USA likewise documented the success of transit taxes and transit-supportive candidates across the country.
In the most prominent mayoral election, Council member Nithya Raman handily defeated Los Angeles Mayor Karen Bass. Most news reports centered on Raman’s democratic-socialist background, which is troubling given that Los Angeles has suffered from too much bureaucratic government — not too little. But Angelenos were rightly frustrated by Bass’ incompetent handling of last year’s wildfires and their aftermath, as well as the city’s ongoing struggles with housing, crime and homelessness.
When I interviewed Raman before the June primary in my role on the Southern California News Group editorial board, she outright rejected any Democratic Socialists of America agenda and focused entirely on nuts-and-bolts reform. Spencer Pratt, the Republican candidate in the primary, noted on X before the election that many DSAers were rejecting Raman and even backing Bass. That’s not to say concerns about Raman aren’t valid, but that it’s too early to panic.
One final note: Democratic socialist Jane Kim won California’s race for insurance commissioner on a campaign that touted the creation of a government-run disaster-insurance program. That certainly is cause for alarm, as she’s likely to back away from the market-oriented reforms that have slowly started to rebuild the state’s crumbling property insurance market. A healthy insurance market is critical for boosting housing affordability.
Stay tuned, as the Free Cities Center will follow the urban-related policies that emerge after this rather dramatic change in voter preferences.
Steven Greenhut is director of the Pacific Research Institute’s Free Cities Center.