The layers of government impact investment decisions. Those layers include government regulations, taxes and fees at all levels. Rational investors must weigh all factors in investment decisions. Inherent positive factors can counter the burden imposed by government, but only to an extent.
Chicago and Illinois are in a great location. It is a rail, air and trucking hub. It even has the equivalent of an ocean port. Yet there is an out migration of both population and industry. There is a corruption associated with every level of government. All require a bloated well paid buerocracy including outlandish pension benefits The city and state ought to be thriving. Both are effectively bankrupt.
The same story will unfold across the land as the burdens of government outweigh the inherent advantages. Democrats inevitably pursue bigger government. Some Republicans see the problem and attempt to constrain government burdens.
The bottom line is allowing the forces of supply and demand to function results in greater efficiency and the creation of greater wealth. Government tends to focus on redistribution of wealth. Democrats run urban areas, hence shitholes will result.