Yves here. This post skirts the edges of the underlying demographic issues with large cities. The top and moderate wealthy depend on a large servant class that has to live in reasonable proximity to be able to care for their masters employers. The very rich have the room for live-in nannies and butlers. The rest use child carers and cleaners on a more casual basis, and also depend on working class support for everything from deliveries to (in NYC) driving to maintenance of their apartments. Yet no provision has been made for them to have at least cheap digs. And these price pressures extend to entry level and support workers in the professions. Even with managements using AI to try to destroy starter jobs, their success has so far has been limited, as IM Doc’s chronicles of physican assistant and nurse practitioner horrors attest.
A problem for Mamdani and other local politicians who seek to improve urban life for working people is that there are significant costs that they do not control, like health care, food, and fuel.
By Lynn Parramore, senior research analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website
From New York to California and beyond, soaring costs seem to be rewriting city politics, as voters respond to candidates who promise to ease the financial squeeze. Zohran Mamdani’s historic win in NYC underscores a shift that has been emerging in recent years – both in the U.S. and globally — and could extend to other major cities.
For example, in Boston, progressive Democrat Michelle Wu, elected in 2021, ran on making city life more affordable with expanded tenant protections, investments in housing, and childcare support. Her most prominent challenger, Josh Kraft, son of Forbes 400 billionaire Robert Kraft, flamed out even before the election. Out west, Oakland’s progressive Democrat Barbara Lee, elected in 2025, focused on tackling homelessness and making housing and daycare more accessible for families. And in Chicago, democratic socialist Brandon Johnson, who took office in 2023, campaigned on “Green Social Housing” and other programs to lower living costs for working families.
Across these cities, the math is clear: when basic necessities like housing, childcare, and utility costs reach stratospheric levels, voters turn to leaders who offer solutions. These mayoral victories reflect the economic pressures impacting urban life and show why cost-of-living issues are now a defining feature of city politics.
Let’s take a look at how these four cities — New York, Boston, Oakland, and Chicago — stack up in terms of costs.;
When a One-Bedroom Costs a Fortune
Across the U.S., if you’re renting a one‑bedroom apartment, you’re looking at spending about $1,495 a month as of October 2025.
But if you happen to live in one of the country’s pricier cities, that number skyrockets fast. In New York City, a simple one‑bedroom will set you back around $4,200 per month, almost three times the national average. Boston renters face similarly steep costs — one‑bedroom apartments in the city average about $3,455 per month. Over in Oakland, it’s about $1,830 per month, and Chicago clocks in at roughly $1,893 per month.
The point is clear: if you’re renting in America’s major cities, you’re paying beyond what most renters pay across the country, and that housing squeeze helps explain why affordability is a defining issue in urban politics right now.
When Daycare Drains Your Wallet
For parents juggling work and childcare, the national average cost of full-time daycare comes in at roughly $1,039 a month. In major cities where cost of living is high, that number climbs dramatically.
In New York City, center‑based care costs about $26,000 a year on average, which works out to about $2,167 per month. In Boston, families can expect rates around $2,856 per month for about 130 hours of care. In Oakland, the cost for full‑day care for children above 36 months is approximately $2,600 per month in many centers. And in Chicago, estimates for full‑day daycare center‑based care hover in the ballpark of $2,300 per month.
It’s no surprise that voters in these cities are drawn to mayoral candidates who talk seriously about childcare. When daycare alone can eat up a significant portion of a family’s monthly budget, affordability quickly becomes a top political issue.
Basic Services Break the Budget
Nationally, households in the 50 largest metro areas spend about $310 a month on utilities (electricity, gas, heating, water). But in these cities, utility costs blow past the national average, adding another layer of financial pressure for residents.
In New York City, the average monthly utility bill comes in at roughly $571. Meanwhile, in Boston residents pay around $443 a month for utilities. In the Bay Area, the average bill in Oakland comes in at about $342 a month, which is lower than New York and Boston but still higher than in many parts of the country. Chicago households report average monthly utility bills of approximately $352.
Bottom line: if you live in one of those big‑city hubs, utility bills are another piece of the affordability puzzle that voters in these cities are increasingly factoring into who they elect to lead.
Affordability is the New Political Pulse
Rising prices are taking center stage in urban politics, affecting election outcomes and pointing to a growing trend in city governance. Mamdani’s upset in New York is already sending ripples across the country, giving a boost to candidates with progressive or democratic-socialist platforms.
In Minneapolis, state senator Omar Fateh, a progressive Democrat and longtime advocate for renter protections, ran for mayor on a platform focused on affordable housing and expanded public services and achieved a close second behind his mainstream Democrat opponent. In Seattle, activist Katie Wilson, also aligned with the city’s progressive wing, is challenging incumbent Bruce Harrell, centering her campaign on housing, public transit, and the broader cost-of-living crunch.
And this trend isn’t just an American story: rising urban costs showing up in political trends worldwide.
Consider Vienna, Austria. Mayor Michael Ludwig, a Social Democrat, has been at the helm since 2018, reinforcing the city’s storied social-housing tradition (which the New York Times called a “renter’s utopia”). Roughly 60 percent of residents live in subsidized or publicly owned apartments, while the city continues to invest heavily in childcare and energy-efficient infrastructure. The result is a model of urban living where the cost of everyday life is more manageable.
Copenhagen, Denmark, under Mayor Sophie Hæstorp Andersen of the Social Democrats since 2021, similarly emphasizes public housing, affordable early childhood education, and green-energy initiatives to keep city life manageable. And in Barcelona, Spain, Mayor Ada Colau of the leftist Barcelona en Comú party has led since 2015, expanding affordable housing, rent controls, and social services.
The economy of the city is pretty much the politics of the city: Zohranomics is essentially urbanomics: the politics of affordability, writ large across city streets. In expensive urban areas, the numbers aren’t abstract; they’re votes. And as the pressures of urban life mount, politics increasingly follows the bottom line.
Five cities around the world are at some stage of implementing doughnut economics. Doughnut economics is Kate Raworth’s way of approaching economic and land use planning for a city or region. The fundamental idea is to meet a social foundation for everyone while staying within planetary boundaries.
I read the link and it’s all very vague.
Doesn’t get to the point of what exactly is being done.
I think the best way to understand doughnut economics is to contrast it with what it is not, which is abundance economics. I’ll start with explaining doughnut economics, and then follow-up with a contrast with abundance.
Doughnut economics identifies that there are two key constraints to sustainability: environmental constraints, and social constraints. You can’t have a functioning long term society if you’re depleting environmental and ecological capital at a rate faster than it can replenish. You will have a crisis when you run out of resources. Likewise, you also can’t have a functioning long term society if the social capital needed for it to function it is not maintained. If education diminishes, you won’t have people with the necessary skills to maintain society. If people become homeless, they create additional burdens on other social systems, as well as have less incentive to support society etc. Sustainability can be a priori and axiomatically asserted as a necessary goal for governance and society, because an unsustainable society, by definition, will destroy itself or be destroyed.
These two constraints however, have many solutions where the solutions supports or enhances social sustainability at the expense of environmental sustainability and vice versa. So the important goal for a city to identify where they are in certain social and environmental circumstances, and to prioritize solving problems that put them “In the doughnut” or the sweet spot between sustainable environmental practices and sustainable social practices. This implies there’s a large variety of possible policy combinations that are accessible and worth pursuing, but what matters most is getting closer to all sustainability goals within the donut.
In the case of five cities, the first step is often “Getting the recipe right” or understanding the scope of all solvable problems in a city and how there might be interconnected causes or deficiencies in those problems. Defining and understanding a problem is just as important as trying to find a solution of one, because if you don’t identify the correct problem, your solution is unlikely to be the correct one.
Because cities are complex systems, a straightforward proposal may not actual solve what’s the underlying problem, only alleviating the symptoms that arise from it. This is compounded by the fact that knowledge specialization means more people get tunnel vision about identifying and solving problems. So an important first step is getting a large number of stakeholders together from multiple disciplines to communicate with one another to make sure one department or organization’s solution isn’t just generating a larger problem for another department or organization.
This may sound vauge, and even like some mystical woo, but as technology allows society to organize in more complex ways, and the technology itself introduces complexity in its own maintenance, it becomes necessary to start from a position making sure everyone is “seeing the forrest for the trees,” before taking and planning action.
Following up.
How is Doughnut economics different than Abundance?
Abundance proposes that the chief problem affecting society is a lack of production that makes certain necessary services and products constrained based on demand, and that this scarcity is what creates significant cost increases which hurts consumers. The solution then, is to identify what is creating those supply bottlenecks, which the abundance movement often identifies as regulations the discentivize private sector investment, and to remove those supply bottlenecks.
Note that abundance does not consider that distribution problems and solutions should have as much weight or consideration as production problems. In fact, abundance asserts that distribution solutions are “zero-sum” thinking and that there’s always a better “positive-sum” solution that will increase the “economic pie” so everyone gets at least something.
Unlike Doughnut, which understands that you have to start from a sustainable economic and societal system first, and then can try expanding the boundaries or size of the donut with research and technological development, Abundance does not respect the idea of constraints. Abundance assumes that technological solutions will be able to alleviate environmental sustainability issues, but the private sectors needs to be able to be highly profitable to generate those technological solutions.
An example of where Doughnut economics provides a much better prediction and strategy than Abundance might be a budget shortfall for a city. The mayor’s office and treasury decide, after lobbying from the Abundance agenda, that the best course of action will be to rezone some greyfield land that has was abandoned into housing, to get more taxpaying residents into the city while lowering the cost of housing, and to legalize gambling and also allow the development of a casino on some city government property that’s shoreline/waterfront adjacent, to both get a quick cash injection from the land sale, boost tourism and tax revenue from gambling, and letting a private company handle some of the former costs of maintaining that area.
Doughnut economics however, predicts this plan will fail for several reasons. The mayor and his offices failed to reach out to existing NGOs dealing with drug and gambling addiction and the public safety departments. The casino will exacerbate those existing issues, creating more problems that will increase the cost of social services in the city. The mayor and city offices also failed to consult utility advisors. The grey site being converted has aged plumbing and sewage infrastructure that was intended to handle commercial retail and low density offices, not the increased burden that higher density residential apartments will require. Thus the mayor’s office underestimated the additional construction costs or tax abatement they’ll need to provide to a developer to build out the project. Thirdly, the mayor and his offices failed to talk to homeless shelters and other NGOs that deal with poverty and homelessness. They failed to consider that home vacancy rates have actually increased from 5% to 10% during the last Mayor’s tenure, and that the increase in homelessness was driven by rental increases from cartel behavior masking itself as algorithmic pricing, and not by net migration into the city, as the city’s population has actually remained stable while homelessness increased. Finally, the mayor and his offices failed to talk to the chamber of commerce, who would have explained that the city is demand capped in the entertainment and performing arts sectors, and the casino will cannabalize existing demand causing businesses in other parts of the city to lose customers and potentially go out, meaning unemployed people who will leave or become homeless.
In this case, Doughnut may not have a concrete solution to propose at first, but the fact that it respects fact-finding and holistic reasoning and solutions means it would identify all the problems and deficiencies of the Abundance proposal, and reject it for being unable to actually solve the problems identified. Doughnut might suggest that, given the increase in both homelessness and vacancy rates, that a vacant rental tax, outlawing non-transparent algorithmic pricing, or using the shoreline/waterfront property to buy up residential property might be better solutions to solve the homelessness issue. However, Doughnut would advocate understanding how those three solutions would affect other components, whether the additional regulation would discourage investment, or redevelopment of the city property will cause other problems.
“First thing we do, lets kill all the lawyers.”
-W. Shakespeare, ‘Henry IV, Part II’
If the current financial problem at it’s root is to be solved I suggest updating that quote:
“First thing we do, lets kill the neoliberal mindset.”
It’s well past time to dismiss the financial philosophies of the fictional Gorden Gekko (“Greed is good.) and real-life Milton Friedman (the only social responsibility of business is to increase profits).
“Because markets, go die.” is killing the country. / my 2 cents
I appreciate the sentiment of this article, but using the mean numbers for New York does not really reflect the reality on the ground for most people.
I live in a gentrified building in Northern Queens. Here are my monthly costs:
Rent: $3,350/month (nice and spacious 1B apartment with gym and laundry onsite)
Electric/water: $110/month, can go as high as $140 in the summer, as low as $90 in fall/spring
Internet: $40/month
On rent, I’d say the average one bedroom in my neighborhood that’s in an older building is probably $2.5-$3k. You can get a one bedroom in a duplex with a basement and a small front patio for around $3.5k.
Manhattan obviously more expensive as is trendy spots like Williamsburg/Greenpoint in Brooklyn, but the prices in my neighborhood are more indicative of what one would expect in most parts of the other boroughs.
I’d say most people under 30 have at least one roommate and are probably spending around $2-$2.5k all-in but in 3+ bedroom apartments you can get down to $1.5k.
While this is still a lot speaking as someone who grew up in rural flyover country, its more manageable than suggested here.
There are decent places in Brooklyn I know for about $3.5k, in unit laundry is scarce though so that ends up being another bill. The other tough thing, for a decent amount of people I think, is travel cost, especially if they work in/near Manhattan. I know the individual fare for metro transport isn’t bad but it adds up, even with the system where the rest of the week is free after a certain # of rides.
Going out is pretty expensive too so all in all the costs add up. I know it’s economically more sensible but the costs can force roomates to be an unwanted necessity, especially if where you live is more urban. I feel like it can be like having to decide between the cost and hours spent on transportation depending on where you work, to afford a cheap place, or depending on finding a roomate to help you sustain living arrangements close enough to your job that you can cut down on transport cost.
Where I’m from, I’ve never had to room with anyone, so far, outside of trips out of town. It’s just not a thing, really and most persons would rather deal with having their own space and privacy ‘cus the travel costs aren’t very expensive (equivalent to abt 50 cents, USD, one way, up to $3 if you want to travel in from halfway across the country). Things like food and leisure activities aren’t particularly cheap but they’re still a fair amount cheaper than NYC.
That said, there are some great-looking places for 8k in Brooklyn, if one or two of you lovely people are looking for a roomate :’).
I haven’t been back to NYC in many years but when I lived there in the late 70s there were still neighborhoods, even in Manhattan, where rents were more affordable. I lived in the East Village.
It seems gentrification and the “new urbanism” are taking away many of these places just as earlier reforms took away the outright slums which once were to be found in lower Manhattan. The process is even taking place here in flyover country to some degree with many of our new arrivals seeking affordability.
When I was young I only wanted to live in a city rather than my small town (and did). These days when I travel I go out of my way to avoid cities. Nevertheless cities are coming to me. Our world is gettimg more crowded.
The direction of this thread mystifies me, along with the thread of argument in the post. [I will skip over my issues with this thread, $3,350/month as more manageable than suggested in the post seems like an effort at squaring a circle to me.]
Rent at around a median of $1495 pre month for a 1 bedroom apartment, based on the ApartmentAdvisor’s numbers for what rent to expect [the post’s source], seems high to me. I can understand the number better when remembering the ApartmentAdvisor is selling people on paying the rent demanded as housing is consolidated and financialized. The number also serves the post well for making its initial argument that renters in America’s major cities are paying beyond what most renters pay across the country. Considering incomes, the lack luster job market, and the limited hours many people face in u.s. big and small cities, I wonder why Lynn Parramore is satisfied to confine the argument to America’s major cities. Housing affordability and the costs of utilities, food, health care, daycare, insurance, gasoline, cars, and where it exists, public transport, and many other costs versus income are crushing the Populace in America’s major cities as well as in America’s smaller cities, and rural communities. I believe there is a premium on living in America’s ‘major’ cities where there are better chances of finding employment, and there are some amenities of urban life, but that seems a peculiar bias in looking at the direction of life in the u.s. The u.s. Populace is being squeezed between incomes and the costs of living … whether in Manhattan or Weiser, Idaho. I believe affordability is a defining issue in u.s. politics right now, and evidently so where it has been allowed to become an issue, if anywhere outside NYC. I believe affordability is an issue most of the politicians outside of NYC have avoided or carefully circumscribed. And curiously, the post’s discussion of affordability never directly mentions renter incomes relative to rents.
I wonder how widely affordability was an issue in the recent election. NYC is the big story but how lonely is that story? How many other local politicians made affordability a key issue? What are the future prospects that other local politicians will adopt the issue now that it played big in NYC politics?
> Rent at around a median of $1495 pre month for a 1 bedroom apartment, based on the ApartmentAdvisor’s numbers for what rent to expect [the post’s source], seems high to me
more people live in cities where rents are high than in undesirable places where rents are low. median goes up. go figure.
I notice you don’t mention food, health insurance, and transportation. Then there are other incidentals like toothbrushes and toothpaste, feminine hygiene if needed. One month’s pay at minimum wage* is $2860 taxes based on 52 weeks at 40 hours. And yes I do think you have to use minimum wage because the majority of jobs out there are minimum wage. Even so called “good jobs” aren’t paying five figures. At one point the standard for what you should pay for housing was one week’s pay. That or at most two week’s pay is probably a more realistic idea of what housing should cost, but our view of “affordable” has been warped. Yes, you can jam multiple people into one apartment, but at some point that isn’t realistic. People still want partners and family. Which usually limits the number of people paying for that apartment even if the numbers might be similar.
And yes I know people can work more than 40 hours a week, but that is something else that shouldn’t be necessary to have a decent space to live, enough to eat, and healthcare.
* in NYC
I watched his video on small businesses and the licensing system for food vendors and how that adds costs to affordable street food… talk of the perversion wrought by making markets out of everything, including licenses for small businesses, so that small vendors have to buy them from those who have cornered the market. It’s just another version of scalping. Mamdani and his team have a better understanding of urban economics, real estate economics, and small business economics than most academic theoreticians.
I get the sense that Zohran and his team have been significantly influenced by a series of articles that came out on a number of cities (from Paris to Tokyo to many other “traditional” urban areas of the old world), especially regarding housing, gentrification and corporatization of retail space, some years ago.
They described how a city preserves its unique character by subsidizing rents and maintaining affordable spaces for small businesses and artisans like butchers, bakers, tailors. In Paris, shops are rented out by the city through its real estate cos, with controlled rents retaining balance between neighborhood shops and corporate chains. In the case of Paris residents, more than 25% lived in affordable government-owned housing (in comparison, 3 to 5% of NY residents live in public housing)…..of course, Macron’s governments are busy diluting all of that. A few things stand out in the range of these urban policies, especially in the case of the spectacular all around development of Chinese cities, for example. First, it’s an integrated approach to all real estate, both residential and commercial. Second, a comprehensive range of policies, from taxation, to subsidized very low interest loans, and ultimately something that comes close to the “means of production” – publicly owned real estate enterprises – so that the state is “not just the payer but the provider”. In the specific case of affordable housing or affordable retail, just arm’s length public financing has been underwhelming. We can just look all around us. In many other successful places it’s been the state that has actually in most cases built/provided the housing itself (the city of Paris owns real estate companies! …and 20 percent of Paris’s shops are rented out by the city through its own real estate subsidiaries).
There is so much inefficiency, corruption and waste in US real estate, in public finance and the affordable housing sector that all the modest goals of Zohran are reachable. What was missing was always the political will. It’s this political will, that’s being seen as the thin end of the wedge, and hence the fierce opposition.
I think Mamdani will need more than just political will to his stated goals. He will need to expand and develop the grassroot organizations that helped him win his office. He will need to execute some extremely astute political moves to counter the threats and constraints the Federal and NY State governments and the courts will begin to use against him. He is playing in an extreme hardball league where he needs to be ready and willing to throw harderball at his opponents. He will need the dedicated support of the New Yorkers he will be working to help. Remember how FDR efforts were met. Remember how FDR’s legacy was speared in the side at the 1944 Democratic National Convention. Mamdani will face the same and probably worse opposition. FDR’s opposition had sullied itself with its handling of the economic crash. Mamdani’s opposition is sitting in the catbird seat. Mamdani will be breaking a lot of rice bowls and pricey China dishes.
The housing squeeze in NYC, coupled with greater availability of remote work, has been bringing a steady influx of New Yorkers to my Philly neighborhood (Germantown).
Even for those who actually commute, a 2500 dollar difference in rent makes it worthwhile.
And if one is talking about buying, the difference is much greater still.
Tucson, AZ and Albuquerque, NM have had free bus service since the pandemic started.
The state of New Mexico has just announced free child care statewide.
So residents of Albuquerque, NM now have two of Mamdani’s campaign planks, free buses and free child care.
https://www.governor.state.nm.us/2025/09/08/new-mexico-is-first-state-in-nation-to-offer-universal-child-care/
I am sure the residents of those cities are delighted that that the people behind “Fix the City” have told NYers that their buses have been over run with criminals and the homeless. ( Yeah that was one of the big talking points.)
It is not just the economics, in Australia the amenity of life in our cities is being officially proposed to be destroyed because of the land price bubble. Parks, wildlife reserves and any other open space are about to be churned up by federally enforced destruction of planning laws in the name of so called affordable housing, which of course cannot really be affordable without a slump in land and construction costs.
It is just a cloak for the handing over to real estate developers of common and public land. Traffic is already horrendous in all state capitals here, time to get out of the cities, they really are going to be unsustainable by 2040.
Let’s not forget the history. When a recession arrived in the ’70s, NYC’s tax revenues declined. Rather than fund a bridge loan until recovery, Wall St. refused to lend, and the Feds (“Ford to NYC: Drop Dead”) also denied funding. The city had to sell land it had set aside for affordable housing (to Trump!).
This is why public financing is not optional, it’s absolutely necessary. A public NYC bank would do the trick, or a local version of the Reconstruction Finance Corporation (terminated by Eisenhower after it funded lots of New Deal projects). I can’t think of another solution.