By Jack Hargrove
On November 4, almost exactly a year after Republicans’ major 2024 election victory, many Americans returned to the polls to vote in state and local elections. Although these races receive less attention than the federal elections every other year, they can have a major impact on daily life and the commercial real estate industry.
In Virginia and New Jersey, new governors and legislatures were elected in statewide elections. New York City elected a new mayor, as did many other major cities. California voted on a ballot proposal to adopt new congressional maps as part of the ongoing battle over national redistricting. This election, as well as countless others across the country, had one thing in common: Democrats won by a wide margin. With the party out of power federally and with a base more likely to vote in off-year elections, Democrats were expected to be the evening’s winners, but the results exceeded both parties’ expectations.
The dominant buzzword in this election was “affordability.” With voters consistently reporting the high cost of living as one of their top concerns, campaigns pledging to lower costs have proliferated. Even the Trump administration has now said this affordability will be key heading into the 2026 midterm elections. Elements of “affordability” include rent and utility costs. As such, this could have a major impact on the commercial real estate industry. At the local level, clashes between moderate Democrats and progressives led to mixed results.
In Virginia, Democratic former Congresswoman Abigail Spanberger was elected governor to replace term-limited Republican Glenn Youngkin. Spanberger defeated her Republican opponent by 15 points, the largest landslide for a Virginia gubernatorial candidate since 2009 and more than double Kamala Harris’ 2024 margin of victory in the state. Democrats also flipped the offices of lieutenant governor and attorney general. Additionally, Democrats flipped 13 seats in the House of Representatives to increase their majority from 51 to 64 members out of a total of 100. Although Virginia is often seen as a light blue state, this election gives Democrats firm control of the state government for at least the next two years. A major factor in this outcome was the mass layoffs of federal employees earlier this year, many of whom live in northern Virginia. However, data centers and their relationship to energy costs were another frequent topic of discussion. Virginia’s “Data Center Alley” in Loudoun County contains the largest concentration of data centers in the world. While Spanberger has not outlined any explicit policy, she has made statements about data center developers paying their “fair share” of energy costs.
New Jersey is historically considered a deep blue state, but there was a lot of speculation that this year’s gubernatorial race would be close. New Jersey had the second largest swing toward Republicans of all blue states in 2024and Republican candidate Jack Ciatarelli lost by just three points when he ran for office in 2021. However, Democratic Congressman Mikie Sherrill defeated Ciatarelli by an astonishing 14 points, the best gubernatorial performance for a New Jersey Democrat in more than two decades. Democrats also improved their majority in the General Assembly to a supermajority by flipping five seats. On the issue of “affordability,” Sherrill proposed a one-year energy price freeze in response to the rapid increase in energy prices.
At the local level, New York City completed an unusually high-profile mayoral election. In June, democratic socialist and lawmaker Zohran Mamdani won a shocking victory in the Democratic primary against former governor and election favorite Andrew Cuomo. One of Mamdani’s main policy proposals is to “freeze rents” for the 2,000,000 New Yorkers who live in rent-stabilized apartments. Cuomo again ran as an independent in the general election, making it a three-way race with Mamdani and Republican candidate Curtis Sliwa. Mamdani won a majority of the votes with 50.4%, beating Cuomo’s 41.6% and Sliwa’s 7.1%.
Many other municipalities held elections, with some major cities reflecting similar dynamics to New York. In Seattle, democratic socialist and community activist Katie Wilson narrowly upset incumbent Democratic Mayor Bruce Harrell by less than a percentage point. Meanwhile, in Minneapolis, incumbent Mayor Jacob Frey successfully defended himself against democratic socialist challenger Omar Fateh and won a third term as mayor. In Buffalo, progressive Sean Ryan was elected mayor after defeating acting Mayor Christopher Scanlon in the Democratic primary earlier this year. In Pittsburgh, the opposite happened: Corey O’Connor was elected mayor after winning the Democratic nomination in May.
Regardless of where NAIOP members live, the results of these local elections could have an impact on next year’s congressional midterm elections. With both Democrats and Republicans recognizing the importance of “affordability” among voters, commercial real estate can easily become a target. Politicians eager to have a conversation about energy prices will increasingly focus on the electricity consumption of data centers. The cost of housing in particular has dominated conversations in major cities, making rent control an attractive policy for many voters. Politically, these Democratic victories could force Republicans to recalibrate their campaign strategy for the midterm elections. While it is unclear to what extent this election was the result of opposition to the Trump administration or its policies, Republican candidates will be looking for new strategies. In these unpredictable political times, NAIOP will continue to ensure that commercial real estate has a voice in government.
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