Expert Voices 2026 | The Great Experiment: Cities and the Federal System

As the United States approaches the 250th anniversary of the signing of the Declaration of Independence, the Penn Institute for Urban Research is pleased to present the 2026 Expert Voices Series, The Great Experiment: Cities and the Federal System. This series is part of America 250 at Penn, a university-wide initiative that invites reflection on the nation’s founding principles and their relevance to contemporary issues.¹

Philadelphia—where independence was first declared, and a new system of government forged—remains a fitting place to examine the meaning of federalism today. The University of Pennsylvania once stood at the center of the history-making events of 1776 and the Revolution that followed. Two and a half centuries later, in research and practice, we continue to examine and experiment with how to shape a more sustainable and inclusive nation that lives up to the country’s founding principles.

America’s federal system, the divided authority among national, state, and local governments, was itself a bold experiment. Rejecting both centralized rule and loose confederation, the Founders created a structure that balances unity with diversity and disperses power across multiple levels of government. As James Madison observed, the federal government’s powers would be “few and defined,” while those retained by the states would be “numerous and indefinite.”² 

This design created enduring space for local variation, innovation, and adaptation. Positioned at the intersection of federal policy, state authority, and local initiative, cities translate national ambitions into local realities. Federalism has enabled municipalities and metropolitan regions to function as democratic laboratories, where varying approaches to the provision of public goods, like education, transportation, and economic development, can be tested and inform policy nationwide. Cities have been the primary arenas in which this federal experiment has unfolded. The capacity of cities to pursue sustainable urban development and shared prosperity is deeply shaped by how responsibilities and resources are distributed across the federal system. 

This year’s Expert Voices Series convenes a distinguished group of scholars and practitioners who examine how America’s federal system has shaped national and metropolitan development, and how it continues to influence urban life today. “The Great Experiment” also reflects a core insight of the American project: that democracy is never complete. So long as the promises of equality and liberty remain unrealized for any community, the experiment continues. We invite you to reflect on this year’s Expert Voices as a contribution to that ongoing experiment, and as a reminder that cities—then and now—remain central to the nation’s pursuit of a more just, resilient, and prosperous future.

- Eugénie Birch and Susan Wachter, Co-Directors, Penn Institute for Urban Research

[1] America 250 at Penn commemorates the 250th anniversary of the signing of the Declaration of Independence and supports research, teaching, and public engagement on the history, evolution, and future of American democracy, with particular attention to Philadelphia’s role as a founding city.

[2] James Madison, The Federalist No. 45, “The Alleged Danger from the Powers of the Union to the State Governments,” January 26, 1788.

How has America’s unique federal system shaped national and metropolitan development? What is the impact of that system on our cities today?

Cities as the Backbone of American Governance and Prosperity 

In many profound ways, municipalities and cities are the level of government closest to the people and must be able to respond to the public service needs of the vast majority of Americans. From the nation’s earliest days, towns and cities organized police, fire, sanitation, and street systems to serve their residents. As industry and technology advanced, cities envisioned and created water and power distribution systems, building policies and transportation terminals to support a working economy. In the modern era, cities have managed the airports, seaports, economic strategies, parks, libraries, and convention facilities that have made America’s cities the center points of economic transactions and the sustainers of the public amenities that enable a high quality of life.

The evolution of America’s towns and cities and of their governments offers an almost perfect parallel to the progress of America itself, a mirror of our social, economic, and physical development. The complex and interwoven elements of our demographic and workforce patterns, our technological innovations, and our cultural interactions are largely rooted in the supportive places we call cities. Our cities, in turn, adapt and advance to keep up with the pace of societal change.

The leaders of our national intergovernmental system have always instinctively acknowledged the basic roles of localities and cities. This is why our state governments have built expensive highway systems connecting cities and why they support excellent state universities, either within cities or to generate the brainpower that keeps cities and the nation productive. It is also why the Federal government has a 100-year history of assisting cities to perform as our national building blocks. That is what the Federal government intended by the enactment of such seminal legislation as the National Industrial Recovery Act, the Civil Works Administration and the Public Works Administration in 1933 to temper the effects of the Great Depression by upgrading the infrastructure of cities and creating jobs. In the same period, the Federal Housing Administration put homes within reach of urban residents, and the Housing Act of 1937 introduced federal funding for the construction of public housing.

After the Depression and World War II, municipal leaders realized that their cities needed a more formalized relationship with the Federal government and strengthened the National League of Cities and the U.S. Conference of Mayors. Since then, they have worked in a bipartisan manner to pass hundreds of pieces of legislation and grant programs to cement the federal-city relationship.

Examples of the most prominent advancements are the following:

• Federal grants through the Lanham Act in the 1940s made it possible to construct public airports in cities.
• The Housing Act of 1949 set the goal of “a decent home and a suitable living environment for every American family” and began urban renewal programs in the cities.
• The Federal-Aid Highway Act of 1956 improved inter-city connectivity.
• The National Defense Education Act (NDEA) in 1958 required teaching of science and mathematics in urban schools in response to the Russian space challenge.
• The Civil Rights Act of 1964 addressed housing segregation in cities.
• The Urban Mass Transit Act of 1964 expanded public transportation systems in cities.
• The Fair Housing Act of 1968 prohibited housing discrimination and gave cities legal tools to make housing more accessible.
• The Model Cities Program of 1968 required comprehensive plans for community development.
• The Clean Water Act of 1972 (CWA) provided funding for upgrading wastewater treatment in cities.
• The Comprehensive Employment and Training Act of 1973 (CETA)stimulated job training and employment development in urban areas.
• The Community Development Block Grant Program of 1974 (CDBG) made direct grants to local governments for housing and economic projects.
• The Community Reinvestment Act of 1974 (CRA) required banks to help address credit needs in low and moderate-income areas.
• The Low-Income Home Energy Assistance Program in 1981 (LIHEAP) assisted low-income households with home energy needs. 
• The Homelessness Act of 1987 (McKinney-Vento Act) directed funds to homelessness programs, largely in urban areas.
• The HOPE VI Program in 1992 allocated funds to replace distressed public housing and focused on creating mixed-income communities.
• The Personal Responsibility and Works Opportunity Reconciliation Act of 1996(Welfare Reform Act) established work requirements for welfare recipients.
• The New Markets Tax Credit Program in 2000 (NMTC) offered tax incentives for private investment in marginalized urban areas.
• The Homeland Security Act of 2002 enhanced cooperation between federal-state-local governments to address security threats.
• The American Recovery and Reinvestment Act in 2009 (ARRA) enabled local governments to offset the effects of the Great Recession.
• The Water Infrastructure Finance and Innovation Act in 2014 (WIFIA) extended federal credit assistance for water infrastructure projects.
• The Fixing America’s Surface Transportation Act in 2015 (FAST) provided funding for public transit and highway projects.
• The American Rescue Plan in 2022 funded local governments to counteract the economic effects of the pandemic.
• The Infrastructure and Jobs Act of 2022 helped fund long-term capital improvements.

Over the years, the federal-city relationship has had its share of missteps and reversals, friction and contention. At the moment, we are in a period of open hostility between the Administration, Congress, and many cities. Large-scale cuts to established programs and recissions of already approved funding have always created tensions when they have been attempted, but today the language and actions are harsher and more dismissive. The President and congressional leaders blame cities for being inattentive to urban crime when data show that many crime indicators are down. The Administration uses immigration policies as punitive cudgels. Governors are attacking city property tax systems and budgets and redirecting long-standing annexation statutes. The scenario of “red state” governors and legislatures acting aggressively to restrict the powers of “blue cities” that are the economic engines of their states and, in so doing, undercutting the abilities of those cities to invest in continuing growth, defies logic, but it is the norm in dozens of states in the current political climate.

Urban advocates must work to return to a more productive model of federal-state-local cooperation. The American economy is becoming more urban-centered, not less. While two-thirds of the American population lives in just the 100 largest metros, that urban population produces more than 75% of the nation’s GDP. With the growing proportion of the US economy that is dependent on technological collaboration, higher education productivity, and entrepreneurial interactions – much of which occurs in the nation’s cities and metros – our leaders must realize that a functional intergovernmental system characterized by federal-state-local cooperation is imperative for American economic progress and national security. The intergovernmental system that has undergirded the most productive economy and prosperous nation in the world must be restored and strengthened for the future.

Henry Cisneros is Chairman of American Triple I, an infrastructure investment firm, and a Principal of Siebert Williams Shank & Co. He previously served as the Secretary of the U.S. Department of Housing and Urban Development (HUD) and was the first Hispanic-American mayor of San Antonio, Texas.

Federalism and the Future of High-Growth Metropolitan Regions

Navigating Federalism in High-Growth Cities

As the mayor of a high-growth Southern city, my perspective on the relationship between the federal system and metropolitan development has evolved over time. Our region has benefited from strong state and local leadership, a reasonable cost of living, and a high quality of life. These factors have made Raleigh an attractive and stable place to live and do business.

Federalism’s complexity is compounded by state-local dynamics. In Dillon’s Rule states like North Carolina, cities have limited authority to enact housing or transit policies without state approval. Cities serve as the economic engines of the country, but we operate within governance structures that often fail to match our scale or complexity. America’s federal system has fueled metropolitan growth while constraining local autonomy, leaving cities like Raleigh to navigate fragmented governance and uneven resources.

Transportation: Federal Priorities Shape Local Mobility

Federal investment focused on car-dependent infrastructure at the expense of mass transit. This approach fueled sprawl, displacement, and development patterns that are difficult to reverse. However, without adequate federal support, we remain overly reliant on highways and roadways, constantly battling congestion and forced to consider traffic impacts every time new development is proposed. 
Raleigh’s recent experience illustrates this challenge. When the region was unable to secure federal funding for light rail, we had to pivot to Bus Rapid Transit instead. While BRT is a valuable tool, it is not a substitute for regional rail, modes that would better connect the cities of the Triangle and reduce emissions. 

Affordable Housing: A Continued Need for Partnership 

Housing programs like LIHTC and Section-8 remain critical tools for affordability, yet cities lack the flexibility to deploy these resources at the scale needed. Federal funding formulas and state preemption often leave metros unable to address rising costs, even as urban growth accelerates.
High-growth metros like Raleigh face affordability challenges that require collaboration between all levels of government. Zoning reform is a powerful lever local governments possess, as we have seen with our Missing Middle zoning changes from 2021 and the removal of parking minimums. Maintaining local authority to manage land-use is an essential component to addressing affordability, while federal funding remains an invaluable resource for building and preserving affordable housing in markets with high land values. 

Civil Rights: Ensuring Access to Opportunity 

In the 1960s, the federal government played a critical role in desegregating public spaces through enforced integration and equal service requirements. Raleigh still bears the physical and social scars of segregation: visible in historic covenants, disparities in economic opportunity, and even in our parks. Pullen Park and Chavis Park, both beloved today, were created under circumstances shaped by prejudice and exclusion.

Today, cities are confronting a shift in federal priorities that move away from strengthening civil rights protections. This shift places greater responsibility on local governments to safeguard these rights and access to opportunity, often without the partnership that once propelled progress.

Trust Cities to Lead 

The federal system has the power to shape the fortunes of America’s cities. It can empower local innovation, or it can constrain municipal authority and limit access to critical resources. For high-growth metropolitan areas like Raleigh, understanding and navigating this tension is essential. The future of our cities depends on a partnership between governments that recognizes their complexity, supports their potential, and invests in the people who call them home.

Janet Cowell is the Mayor of Raleigh, having been elected in 2024 following fifteen years of  public service as a Raleigh City Councilor, North Carolina State Senator, and State Treasurer.

Cities as Laboratories: Decentralized Innovation in the American Tradition 

Benjamin Franklin’s life and career offer a useful vantage point for understanding how
Philadelphia helped shape the early American republic and a lasting tradition of urban,
decentralized innovation. Although Franklin was an exceptional figure, he was also a
product of a civic environment that rewarded experimentation, collaboration, and practical
problem-solving. Philadelphia’s institutional culture allowed ideas to circulate widely and
encouraged local initiative without reliance on distant central authority.

In the eighteenth century, Philadelphia differed from older European capitals. It was a
commercial and intellectual center without an entrenched aristocracy, a setting well-suited
to Franklin’s pragmatic outlook. His scientific achievements brought international
recognition, but his inventions—such as the lightning rod, Franklin stove, and bifocals—
were designed to solve everyday problems. Equally important were his civic efforts,
including founding the Library Company, organizing a volunteer fire company, a volunteer
militia to defend the city, and supporting what eventually became the University of
Pennsylvania, all of which demonstrated how local cooperation could produce lasting
public benefits.

Franklin and Philadelphia’s influence extended beyond the city through the replication of its
civic experiments. Many other cities adopted similar institutions, including libraries, fire
companies, and voluntary associations. These models spread because they were practical
and adaptable, showing how communities could borrow successful practices without
centralized control. Moreover, failing to adapt would, in practice, mean losing the
economic growth competition to more innovative cities.

This pattern continued as the United States expanded. Rather than concentrating power in
a single city, economic development proceeded through a network of urban centers, each
responding to local economic and social challenges and giving opportunities to local
entrepreneurs. From Boston and New York to Chicago and San Francisco, these cities, at
different times, acted as decentralized engines of innovation whose combined effects
shaped national growth. This structure remains important today, as many contemporary
challenges, such as housing affordability, are supposed to be addressed at the municipal
level.

Recent experience in fast-growing Sunbelt cities such as Dallas and Houston illustrates
this dynamic. Through flexible zoning and large-scale housing construction, these cities
have expanded supply, moderated cost pressures, and promoted economic growth. Their
success has increased pressure on more established cities to provide more abundant and
affordable housing for local communities.

From Franklin’s Philadelphia to today’s Sunbelt cities, American strength has repeatedly
emerged from decentralized experimentation, reinforced by the ability of cities to learn
from and adapt each other’s successes.

Fernando Ferreira is Chair of the Real Estate Department and the C.F. Koo Professor of Real Estate and Professor of Business Economics and Public Policy at the University of Pennsylvania's Wharton School.

Federalism: America's Hidden Advantage

America's true economic and political advantage does not lie in the size of its economy, the reach of its military, or the power of its presidency. It lies in federalism—a system of shared authority across national, state, and local levels that embeds power in places and creates the conditions for innovation, economic growth, and political stability.

Alexis de Tocqueville famously saw America's strength in its capacity for local initiative and voluntary association. But that insight was never just about civic life. It pointed to something deeper: a decentralized system that forces communities to act, solve problems, and build institutions for themselves. This is what federalism does—it translates local energy into durable economic and political capacity.

Federalism is the institutional analog to America's innovative entrepreneurial culture—the alchemy of venture capital and startups that causes creative destruction, creates new industries, redefines old ones, and drives our system's dynamism. The federal system is the political operating system that fuels a similar dynamism in governance. Hundreds of cities, regions, and states constantly experiment with different approaches to innovation, economic development, and growth.

Federalism, however, is not fixed. It is a dial. Over the twentieth century, power steadily shifted upward. What began as necessary national coordination hardened into permanent centralization. The result is a bloated administrative state and an imperial presidency that now tries to govern too much of economic and social life from the top down.

The country is deeply polarized and divided. We can no longer afford to nationalize every issue. Trust in the federal government has collapsed—from roughly three-quarters of Americans in the mid-twentieth century to around 20 percent today. Yet trust in local government remains between two-thirds and three-quarters of Americans, cutting across partisan lines.

The way forward is to use our federalist system as it was meant to be used. The most powerful vote is the ability to vote with your feet—choosing communities that match your values, living the way you want to live. This is how a divided society learns to coexist. The political theorist Benjamin Barber argued that cities form a structural counterbalance to national power—institutions with resources, citizens, and the capacity to act. Jane Jacobs came to the same conclusion—cities are the essential counterweight to large-scale organizations and bureaucracy, where democratic life is actually practiced.

The hidden genius of the American system is federalism. It powers innovation and economic growth by enabling continuous experimentation across places. It provides political stability by allowing a diverse society to govern itself without constant warfare over the center. The solution to our current crisis lies not in further centralization, but in turning the dial back.

Richard Florida is a Visiting Distinguished Professor at Vanderbilt University, a Professor at the University of Toronto, and a Visiting Fellow with the Kresge Foundation.
 

Cities Will Need to Be Nimble as U.S. Reduces Longtime Role in Local Government

If states are America’s laboratories to “try novel social and economic experiments,” as the late Supreme Court Justice Louis D. Brandeis, cities are now where most of the experiments get carried out. And for good reason. Urban areas accounted for 80 percent of the nation’s population as of 2020, US Census data show, compared with 60 percent in 1950  and only 39 percent in 1900. But missing from this state-city relationship is the decades-long expansion of federal funding of both the policy experimentation and day-to-day business of states and municipalities.

Indeed, this critical relationship is about to undergo a wrenching change as the expiration of emergency COVID-19 relief and actions by the White House and Congress, via executive orders and the so-called One Big Beautiful Bill Act of 2025, cut trillions of dollars in programs and funding over the next several years to help reduce mounting federal budget deficits and debt. Adjusting to the federal funding pullback may be painful, but it  also will be a valuable opportunity for experimentation, this time with fiscal federalism. 

In fiscal 2023, almost $2 trillion in federal aid flowed into state coffers, according to The Pew Charitable Trusts, with much of the money destined for cities and counties to pay for everything from health care to natural-disaster relief, reading programs, road construction, and low-income rental assistance. Federal funds made up 36 percent of total state revenues in 2023, Pew estimates, almost double their share in 1990. (A compilation of federal grant programs supporting local governments can be found on the National League of Citieswebsite.

As federal aid to states and municipalities recedes from extraordinary levels, pressure points are emerging for local governments. The National League of Cities (NLC) 2025 City Fiscal Conditions survey found that 45% of city finance officers said they were optimistic about meeting Fiscal 206 fiscal needs, down from 64% in 2024 and a record 89 percent as pandemic aid was peaking in 2022. Two of the biggest pressure points include:

• Medicaid Cuts. Fitch Ratings estimates that reductions in federal spending on the health care program for low-income Americans will cost states $49 billion to $275 billion over the next decade. 
• Reduced Disaster Aid. While the White House’s desire to overhaul the Federal Emergency Management Agency (FEMA) remains in flux, returning responsibility for disaster management and recovery will stretch state and local financial and human resources severely, especially in states including Florida, Hawaii, and Louisiana, Hawaii, which have recorded high levels of federal disaster aid as a share of their state gross domestic product.

Amid such stresses, cities will need to emphasize resilience in budgets and financial plans. Even with GDP expected to grow 2% in 2026, about the same as in 2025, according to a Bloomberg poll of economists in December, most municipalities are blessed with a relatively healthy fiscal cushion. Citing S&P Global Ratings data, Pew has reported that median budgetary reserves stood at 45 percent of general fund revenues in 2025 in the municipalities and counties the firm rates. Those reserves may give cities some breathing room while they learn to live more on their own as the federal presence dwindles in the nation’s laboratories of democracy.  

A veteran financial and economic journalist, William Glasgall is a Public Finance Adviser to the Volcker Alliance and cohost of the monthly Special Briefing livestream program and podcast on public finance with Penn IUR.

The Metropolitan Challenge: Rethinking Federalism for Shared Prosperity

The division of powers among federal, state, and local governments was designed to balance national ambition with local experimentation. In practice, when it comes to how cities and metropolitan regions develop, that balance has produced surprising consequences that undermine local, regional, and national prosperity.

America's metropolitan regions generate over 90 percent of national GDP, functioning as integrated economies where workers, firms, and housing markets cross municipal boundaries daily. Yet governance remains fragmented across thousands of autonomous local jurisdictions, each making land-use and fiscal decisions independently. This mismatch between economic geography and political geography creates predictable challenges: infrastructure coordination failures, fiscal competition among municipalities, and difficulty addressing metro-wide issues.

This fragmentation isn't inherent to federalism itself. Rather, it reflects specific choices states have made about structuring local authority and choices the federal government has made about deploying its constitutional powers. States granted municipalities broad land-use control and tied local revenues to property and sales taxes, creating incentives for fiscally motivated development decisions. In California, Proposition 13's property tax limitations shifted municipal dependence toward sales taxes, which can incentivize cities to zone for revenue-generating commercial uses rather than housing. Meanwhile, the federal government has offered limited incentives for regional cooperation beyond transportation planning. Regions face simultaneous pressures: sprawl in some places, scarcity in others, segregation nearly everywhere. The causes are familiar: restrictive local zoning, weak coordination, uneven federal oversight, and fiscal incentives that reward exclusion.

These arrangements produce inequitable outcomes that ripple beyond metropolitan boundaries. Affluent jurisdictions use exclusionary zoning to maintain fiscal advantages while neighboring communities absorb housing needs and costs. Economic development becomes competitive rather than collaborative. Service quality varies dramatically across jurisdictional lines, diminishing national human capital potential.

Recent shifts in federal policy may intensify these dynamics by removing tools that historically helped address metro-wide disparities. Yet promising reforms are emerging at the state level. States such as Colorado, Utah and Maryland have recently enacted legislation requiring municipalities to accommodate housing needs, demonstrating that states can exercise their constitutional authority to address collective action problems.

What would more functional metropolitan federalism look like? States could establish minimum standards for local land-use regulations while preserving implementation flexibility. The federal government could tie infrastructure and housing investments to demonstrated cooperation and equity outcomes. Regional entities could be strengthened to coordinate across jurisdictional boundaries.

These reforms need not eliminate local autonomy. Rather, they would align governance structures with economic realities, ensuring local decision-making occurs within frameworks that account for broader impacts. The question isn't whether to preserve federalism, but how to adapt its institutions to serve shared prosperity when our most pressing challenges operate at scales transcending municipal boundaries.

As America's constitutional system enters its third century, the metropolitan governance puzzle offers both a test and an opportunity. Can federalism's flexibility enable the institutional innovation our regions and nation need? The answer depends on whether policymakers recognize that coordination, not competition, must define the next chapter of metropolitan development.

Solomon Greene is the Executive Director of Land and Communities at the Lincoln Institute of Land Policy. He previously served as the head of the U.S. Department of Housing and Urban Development’s (HUD) Office of Policy Development and Research.

The Next Republic

The unique brand of U.S. federalism— i.e., the divisions of powers and responsibilities across the federal government, states and localities—has shaped city and metropolitan development since the founding of the Republic.

In the modern era, the U.S. federal government has been described as “a health insurance company with an army.”  To that end, the strengths of disparate metropolitan economies have been dramatically affected by outsized federal investments in defense related manufacturing on one hand and defense and life science related research & development on the other.

At the same time, the physical landscapes and built environments of metropolitan communities have been fundamentally altered by the central role that the federal government has played in subsidizing housing and transportation infrastructure, particularly since the end of World War II.  Still further, metropolitan geographies of social opportunity have been impacted by the central role that states and localities play in elementary and secondary education. 

It is safe to say that U.S. practices a form of federalism that is unique among nations. The scale of investment in what President Eisenhower called the “military industrial complex” is extraordinary and explains the economic roles of metropolitan areas as distinct as Boston, Hampton Roads, Philadelphia, Saint Louis and Silicon Valley.  Similarly, the excessive role played by the federal government in the housing sector— and the relatively small role (funding wise) it plays in education — is the opposite of how most nations are organized and has had an indelible impact on the locus of policy innovation and the flows of public, private and civic investment.

Federalism, of course, is a living form of governance.  It evolves in alignment with shifts in market dynamics, ideological movements and partisan divisions. It is now set to be remade again, driven by President Trumps’s radical presidency.  This is the central topic of my next book, tentatively titled The Next Republic: How America Can Rebuild from the Ground Up. 

My thesis goes as follows: 
The United States is witnessing a Big ReSort of responsibilities as the federal government scales back fundamental investments in housing, clean energy, infrastructure, scientific research, education, workforce, small business and more. If the nation is to progress, states, cities and metropolitan areas — and the public, private and civic institutions which lead them — will need to step up at an unprecedented level.  The timing of this devolution could not be more complicated, since it occurs at the exact moment where the U.S. and global economies are being fundamentally restructured due to geo-political tensions and technological acceleration.

For all the bullying and bluster emanating from the White House, the serious business of governance and the real solving of problems are now the central responsibility of the nation rather than the federal government. As in prior periods of our history, we should expect a burst of innovation – in institution building, in intermediary creation, in project design and delivery, in financial instruments and capital stacks – but this time from cities and metropolitan areas, the places that concentrate our population and drive our economy.  This will be uneven for sure, but it offers the best hope for progress in the foreseeable future.  Cities and metropolitan areas (along with their states and the private and civic sectors) have more power than they think and more capital than they know – but they need to deploy at scale.

The Next Republic will quickly becoming the new federalist reality in the United States. Cities and metropolitan areas can shape it in their image and to their advantage, if they seize the mantle.

Bruce Katz is the co-author of The New Localism and a Senior Advisor to the National Housing Crisis Task Force, which focuses on five key segments of housing interventions: land, construction, capital, regulation and policy, and governance.

Praise and Criticism for America’s System of Local Governments

It was Supreme Court Justice Louis Brandeis in 1932 who identified states as the “laboratories of democracy.” Had Brandeis been an economist or political scientist rather than a jurist, he might have assigned that role to local government instead. Local governments are where everything good about America—the creation of places where individuals can succeed and prosper, the commitment to local self-reliance and political self-determination, and the tolerance and generosity of neighbors—come together. 

Including counties (of which there are currently 3,244), the U.S. is home to roughly 39,000 general-purpose local governments and another 51,000 special districts. That’s nearly one general-purpose local government per 8,700 residents, up from one per 7,700 residents in 1900 and one per 160,000 residents in 1800. (In China, the country with the next largest number of local governments, there is currently one local government entity per 35,000 residents.)

The American predilection for creating local governments stems from the Tenth Amendment to the U.S. Constitution, which reserves for the states and their people powers not explicitly assigned to the federal government. Among those powers are procedures for establishing new municipalities, as well as the police power, which gives governments the authority to enact laws and regulations to protect the health, safety, morals, and general welfare of their citizens, and which serves as the basis for local zoning and subdivision codes. Different states have exercised their reservation clause powers to establish local governments with varying frequency. Hawaii stands at one extreme with one general-purpose government per 358,000 residents. North Dakota stands at the other extreme with one local government per 450 residents. 

There are both good and bad aspects to having more local governments per resident. On the positive side, as Justice Brandeis recognized, having more local governments creates more opportunities for innovation, and with fewer residents per local government, more opportunities to pilot those innovations without worrying about something going wrong. More local governments per resident also puts decision-making authority closer to the people affected by those decisions. On the flip side, having more local governments per capita creates greater opportunities for exclusionary and discriminatory behavior. Indeed, the desire to escape European immigrants at the close of the 19th century and Black migrants from the American South during the first half of the 20th century was the major motivating force behind the establishment of most suburban municipalities in the Northeast and Midwest. Having more municipalities also increases the tendency for communities to engage in beggar-thy-neighbor behavior when it comes to attracting revenue-generating land uses, such as auto malls, and excluding cost-generating land uses, such as apartment houses. Indeed, when I compared the ratio of local governments to residents with per capita rates of non-urban-to-urban land conversion (i.e., sprawl) by state between 2000 and 2024, I found a moderately positive relationship between the two.

What can states do to build on the positive aspects of having more local governments while mitigating the negative aspects?  California, Oregon, and Maryland offer some tried-and-true examples. In an effort to preserve valued farmland and curb sprawl, California in the 1960s began requiring municipalities within the same county to coordinate their individual annexation activities. For similar purposes, in 1979, the State of Oregon enacted a law empowering Multnomah, Clackamas, and Washington Counties in the Portland area to create an urban growth boundary, or UGB. Whereas previous UGBs had functioned as fixed greenbelts, Portland’s was designed to be extensible, meaning it was required to expand with population growth. In 1997, in an effort to encourage responsible infill development, Maryland identified a series of city-centered “priority funding areas” eligible for additional state transportation and community funding. 

Each of these approaches has succeeded to some degree, although none has completely solved the problem of uncoordinated development characteristic of local government fragmentation. But, as Justice Brandeis noted nearly a century ago, each helps demonstrate the problem-solving potential of America’s still-fairly unique approach to local government creation and governance.

John Landis is Professor Emeritus of City and Regional Planning at the University of Pennsylvania Stuart Weitzman School of Design and the author of Megaprojects for Megacities: A Comparative Casebook (Edward Elgar, 2022).

Cities in a Fragmented Federal System

For nearly 250 years, America’s federal system has served as both framework and constraint for urban development. As an advocate for our nation’s cities, I see this system as a defining force in how our regions have grown, how infrastructure has been funded, and how communities have been empowered—or left behind.

From the founding, federalism created a layered framework of local, state, and national authority that shaped urban life in profoundly uneven ways. Cities emerged first as creatures of their states, dependent on state legislatures for their charters, boundaries, and taxing powers. Therefore, urban governance reflected the political and economic priorities of state leaders rather than the lived realities of city-dwellers. The industrial revolution of the 19th century brought cities transit networks, water systems, and street grids—but always within state-set fiscal limits. Many states restricted municipal revenue generation, pushing cities toward debt financing and later toward federal assistance.

The New Deal and World War II years marked a turning point. Federal authority expanded dramatically, funneling resources into housing, highways, and economic development. While these programs modernized the American metropolis, they also entrenched patterns of segregation and suburbanization. Federal mortgage policy incentivized single-family suburban development; federal highway funding cut through urban neighborhoods while enabling regional sprawl. Local governments, lacking the necessary fiscal autonomy, became reliant on these national incentives, which shaped the form of metropolitan growth for generations.

Post war federalism also reinforced the fragmentation of metropolitan governance. With power dispersed across cities, counties, suburbs, school districts, and regional authorities, it became difficult to coordinate transit systems, regional planning, or equitable public investment. States and the federal government filled some gaps, but often in ways that magnified local disparities.

In recent decades, shifting federal priorities—sometimes investing in cities, sometimes withdrawing—have emphasized the tension inherent in American federalism. National policy can spur transformative urban development, yet inconsistent federal commitment leaves cities vulnerable to state politics and unreliable revenue streams. Meanwhile, local governments, closest to urban challenges, remain among the most constrained.

Across 250 years, America’s unique federal structure has produced extraordinarily dynamic metropolitan centers, while also limiting cities’ ability to respond efficiently and equitably to change. The task ahead is not to dismantle federalism but to recalibrate it—aligning national, state, and local authority so the country’s metropolitan regions can thrive together rather than develop in fragments.

Marc Morial is the President and CEO of the National Urban League, the nation’s largest historic civil rights and urban advocacy organization. He previously served as the Mayor of New Orleans.

Where American Democracy is Built: The Power of Cities

While the American Revolution was won on the fields of Saratoga and in the woods of Yorktown, the few major cities at the time functioned as the strategic, economic, and political nervous system of the colonies—the intellectual cradles of the rebellion. In fact, the British military strategy centered almost entirely on the capture and occupation of cities, particularly Philadelphia, which served as the capital of the Revolution. The Brits would discover quickly, though, a unique American reality: unlike in Europe, where the fall of a capital often signaled the crushing end of a conflict, the American government and revolutionary spirit were decentralized, characterized by the (often tenuous) alliance of a collection of states and their cities.

Both America’s strength and global influence stem from its diverse, locally governed cities. It is these factors that have ensured America would never have a single “capital city” that dominates the entire culture or economy. In other words, the same trait that allowed the ragtag nation to prevail against the British 250 years ago has led to a competitive marketplace of states and cities, one that fosters incredible economic innovation and local identities.

It is unsurprising, then, that cities would come to affectionately be known as the “laboratories of democracy,” the primary engines of what eventually becomes national policy. Take our great home of Philadelphia, for example; it is here that so many firsts were attempted and ultimately scaled—among them, public municipal water, libraries, and school systems. It is within our unique federalist system that bold ideas become successful pilots, and successful pilots push the limits of what government can provide for its citizens.

These cities, though, and the great local executives who lead them, have come under ever-increasing strain. Year over year, local governments are asked to do more with less. As we celebrate the nation’s 250th birthday, we must remember and recommit ourselves to what sustained us through a war that the world said we would never win: valuing, trusting, and supporting strong municipal governments, and empowering our local leaders to continue pursuing bold ideas.
 

Michael A. Nutter is the David N. Dinkins Professor of Professional Practice at Columbia University’s School of International and Public Affairs (SIPA) and the 98th Mayor of Philadelphia.

From Municipal Airfields to National Networks: Aviation, Federalism, and American Cities

The evolution of federal interest in aviation through the years has fundamentally reshaped the aviation system and the cities that support and rely on these airports. The path that the aviation system has taken in terms of federal involvement gives us a look into how American federalism has shaped American cities and mobility.

Aviation began as a local enterprise. As Janet Bednarek shows in America's Airports: Airfield Development, 1918–1947, early airports were almost entirely municipal projects. Cities built them the way they built harbors: with local funding, local control, and fueled by civic boosterism. The Air Commerce Act of 1926 regulated activity in the air pilot licensing, aircraft certification, navigation aids, and left airports to be funded by municipalities alone. Yet, agencies within the federal government needed airports to carry out their fundamental functions: examples include the Post Office needing airports to carry airmail and support an airmail business, and the Department of the Army needing airports to support training. These federal agencies relied on urban boosterism and fear of competition to get cities to build airports, relying on underlying boosterisms by citing that a city’s urban rivals were already building an airport.

The role of the federal government in airport development shifted decisively after World War II. Fueled by the growing demand for aviation and, in part, by the need to put people and technology to work (as well covered in Francesca Ammon’s Bulldozer), federal aid for airport construction and expansions was unlocked by the Federal Airport Act of 1946. Federal money became available at a scale larger than what was available at the local level, but it came with conditions meant to nationalize the aviation system. Access to funding required compliance with national standards for design, safety, operations, competition, and planning. Airports were no longer free to make decisions over which airlines they served, or which aircraft could land at their airports. Over time, this federal funding (which was not compulsory but too plentiful to reject) intensified centralized regulation and produced a nationally coordinated aviation system operating still on locally owned infrastructure.

As the aviation system grew, with the jet age enabled by larger and stronger runways, cities learned they could positively impact their economic development by facilitating aviation growth. The result of decades of cities courting more and more air service through enhanced airport capacity and, more recently, municipal incentives, is a landscape of winners and losers: cities that have airports that have been elevated and are magnets for economic development, and cities that are struggling to build air service and thus kick off the positive spiral of economic development and air service. As the United States approaches its 250th anniversary and cities more than ever are looking to be connected and grow their economies, the aviation system offers a clear lesson in how federalism, through its shifting balance of local initiative and national control, continues to structure opportunity, connectivity, and urban hierarchy.

Megan S. Ryerson is the UPS Foundation Chair of Transportation and Professor of City and Regional Planning and Electrical & Systems Engineering at the University of Pennsylvania and the founder of the Center for Safe Mobility.

Anchor Institutions and the Urbanization of Higher Education

We were not one nation when universities were founded. European colonists began establishing institutions of higher education almost immediately after launching their invasion and settlement of the New World. The Spanish were the first, founding what is now the Universidad Autónoma de Santo Domingo in 1518—one of the earliest universities in the Western Hemisphere. The English followed, and by the time of the American Revolution they had established nine colleges, including Harvard, Yale, and William & Mary. Whereas Spanish institutions tended to be located in established colonial towns, English colleges were generally placed in rural or semi-rural settings, with two notable exceptions: what would become Columbia University in New York City and the University of Pennsylvania (Penn) in Philadelphia.

Penn eventually moved to a more suburban location in 1872, though it would later become urban again as Philadelphia expanded around it—much like Harvard’s surrounding city of Cambridge, Massachusetts, which likewise transitioned from a semi-rural college town to a dense urban environment. This pattern reflected a broader national trend. The Morrill Land-Grant Act of 1862, passed during the Civil War, created dozens of new public colleges devoted to agriculture, engineering, and the mechanical arts. These institutions were typically founded in rural areas, yet many—such as those in Columbus, Madison, and Berkeley—eventually found themselves at the centers of growing, dynamic cities. Congress granted federal land (or land sales proceeds) to each state to support higher education. Each state accepted the grant and chartered and funded the university under state law.

In the late nineteenth century, major American universities including Johns Hopkins, Harvard, and Penn adopted the German model of scientific research, emphasizing graduate education, laboratories, and specialized scholarship. The effects were swift and transformative. Breakthroughs in medicine, engineering, and the natural sciences positioned universities as essential engines of discovery and innovation. Federal support expanded in parallel, and cities grew alongside their emerging “anchor institutions,” which supplied expertise, economic vitality, and a steady flow of educated workers.

During World War II, universities played a crucial role in the national war effort. Penn contributed to the development of ENIAC, one of the earliest electronic computers, while institutions across the country participated in the Manhattan Project, supported by unprecedented levels of federal research funding. After the war, the GI Bill opened the doors of higher education to millions of returning soldiers. Enrollments surged, campuses expanded, and a new generation—later known as the Baby Boomers—would further accelerate this growth.

Federal investment increased again after the Soviet Union launched Sputnik in 1957. Fearing technological inferiority, the United States poured resources into scientific and engineering education. Universities such as MIT and Caltech led the emerging space race, contributing research, training, and innovation that helped establish U.S. scientific and technological dominance. These developments not only fueled major advances in space exploration and computing but also reshaped the American economy and reinforced the global influence of U.S. universities. In a time of turmoil, we should remember the federal, state and local partnerships that have yielded us the benefits of the American research university. 

Frederick Steiner is the Dean and Paley Professor at the University of Pennsylvania Stuart Weitzman School of Design, where he also serves as co-executive director of the Ian L. McHarg Center for Urbanism and Ecology. 

When Federalism Determines Whose Rights are Real

“New federalism” is most often understood as a late-twentieth-century constitutional development in which the U.S. Supreme Court renewed its attention to the limits of federal power and the legal status of the states. In this familiar telling, Court decisions from the 1990s and early 2000s strengthened state sovereignty and cabined federal power.

Scholarship on these decisions—involving state sovereign immunity, anti-commandeering, clear-statement rules, and narrow readings of congressional power—captures something important but often leaves unexplored how these doctrinal changes were built, sustained, and normalized over time. My work characterizes this Court-centered new federalism story as part of a broader and ongoing federalism revolution, one that unfolded gradually and through multiple institutions rather than emerging fully formed in a single judicial moment (Disability and the Ongoing Federalism Revolution). From this perspective, the contours of American federalism are not simply announced by the Supreme Court. They are negotiated through statutory interpretation, administrative practice, litigation strategy, grassroots pressures, and remedial design.

Disability-related disputes are a key example. Starting in the 1970s, controversies regarding the rights and well-being of disabled citizens highlighted just how much the federal government had promised people with disabilities, as well as the burden those promises placed on other levels of government. When such disputes reached the Supreme Court, they offered vehicles for the kind of doctrinal changes that we now associate with “new federalism.” These changes, in turn, shaped how citizens navigated the federalist system of the twenty-first century, in which many rights emanate from federal law but depend on state and local implementation. 

My work also shows how the new federalism project continues to unfold, most notably through contests over Congress’s power under the Spending Clause. Today, however, the new federalism operates largely as background law rather than as a self-conscious constitutional project. Courts rarely pause to defend sovereign immunity or clear-statement rules as innovations. Instead, these doctrines structure statutory meaning and enforcement choices as a matter of course. Their power lies in their routinization—in the way they quietly shape how statutes are drafted, programs are administered, and remedies are made available (Pennhurst Doctrines).

The consequences for civil rights enforcement have been especially stark. The Reconstruction Amendments ostensibly made the federal government a guarantor of the fundamental rights of citizenship and a mediator between individuals and state governments. New federalism doctrines frequently operate to insulate states from accountability. In areas ranging from disability rights to voting rights and institutional reform, federalism’s modern doctrines structure who may sue state actors, under what authority, and with what prospect of relief. In other words, they dictate whose rights are real, as opposed to mere paper promises. These outcomes are not aberrations but logical consequences of earlier federalism skirmishes. And in the aggregate, they demonstrate that the new federalism was never simply about the structure of government. Its influence is both structural and distributive, shaping the practical availability of rights through the ordinary operation of law.

These insights underscore the dynamism of American federalism—it is not a static feature of American government. They also illustrate its powerful impact on American life. How that power will be harnessed going forward is one of the great questions of our time.

Karen M. Tani is a Penn Integrates Knowledge University Professor at the University of Pennsylvania, where she holds joint appointments in the Department of History and the Carey Law School. 

Beyond Cities and States: New Models of Metropolitan Governance 

While cities may be the most ancient form of governance, dating back to feudal systems and before, the United States’ federal system has never prioritized cities or municipalities, instead placing them under the control of 50 different state governments, each with their own constitution and powers. While states have delegated certain responsibilities to municipalities, including some forms of taxation and many land use decisions, state governments have maintained control of most taxing and regulatory powers. This has created an inherent tension between states and cities, as each seeks to gain more control over the functions that determine their success or failure. Perhaps even more critical, it has stifled innovative metropolitan governance. But more recently, new public authority models have stepped into the fray and are now providing some of the investments needed to shape metro regions in positive ways.

As suburban American built out in the second half of the 20th century (aided by the construction of the interstate highway system and federal policies to encourage home ownership), it became increasingly clear that the geography where much growth was happening was outside effective public management, whether in unincorporated areas or simply straddling multiple municipalities, which therefore failed to adequately plan for the services and activities that suburban development would bring. The results should not have been a surprise: local traffic congestion from poorly planned networks, disappearance of farmland, strains on water supply, and struggles to provide adequate educational facilities in rapidly-growing communities. By the later decades of the century, “suburban sprawl” was generally understood to encapsulate the failure to address the consequences of growth.

To better plan for these challenges, some developing metropolitan regions around the country experimented with different forms of metro governance, including city/county consolidation, municipal tax-base sharing, metropolitan planning organizations (MPOs), regional commissions, or smart growth.  While some were successful in addressing specific aspects of the challenges facing communities, no single strategy emerged — because none of them were recognized or facilitated by the federal system. For instance, while the USDOT required federally-recognized MPOs for states to access transportation funds, these MPOs had no authority over land use decisions. Planning became a bureaucratic exercise, rather than a set of policies to make tough decisions about growth and preservation.  

In the 21st century, several trends have ameliorated some of these challenges. Thanks to generations of environmental preservation, agricultural lands and environmentally sensitive areas have greater protections, pushing more development to brownfield sites and redevelopment. Demographic trends, including aging Baby Boomers and recent immigrants, are more likely to favor residences close to other communities with services and networks, rather than extending ever further to the edges of metropolitan regions.

In recent years, some metropolitan regions have developed stronger public authority models to deliver some of the investments and services that growing metro regions need. Funded by diverse sources, including sales tax surcharges, payroll taxes, and tolls and user fees, these newly invigorated public authorities are building housing, investing in transit, and supporting clean energy investments. They exist outside the federally-established state/municipal tension and often take advantage of public-private partnerships to deliver region-shaping public investments. The growth of these quasi-public institutions offers optimism for metropolitan development in America.

Tom Wright is the President and Chief Executive Officer of the Regional Plan Association (RPA), the nation’s oldest independent metropolitan research and advocacy organization.