City states. The borders are administrative and hard to change, so people living in the "suburbs" live not only in a different city, but a different state.

Missed the other part. Why does the density doesn't not improve in the city states?

More and more people want to live in the city, as you can see in the skyrocketing rents, but they do not want to

- build higher

- build more dense (in particular, keep the green areas)