Is there some guide that explains the division of responsibilities between different levels of government in the US? I have lived in the US and have always been aware of my lack of knowledge in this area. (In this specific instance I am unsure whether the City / State is responsible for urban planning / transportation capacity that might possibly be impacted by sudden changes in inventory.)
Generally, the overriding principle is that the state has ultimate authority, but how this works in practice is that the state makes rules for local governments to follow, collects tax revenue, and decides on the distribution of taxes.
The biggest area of difference between states is the balance of power between city and county, from New England (where counties are basically just statistical divisions) to Hawaii (where cities are just statistical divisions, and counties handle everything). Whatever that balance is, it's at this level that things are administered day-to-day; no state that I know of, for example, has a single state-wide police force (only state forces with limited jurisdiction, like the California Highway Patrol), or a statewide primary and secondary education system ("school districts" run those instead).
That last (school districts) touches on a complicating factor in understanding US local government - special-purpose districts. These are bodies formed by agreement between a set of local governments (usually with a state veto) to jointly handle certain policy areas. For each area of responsibility, the lines are drawn differently - for example, the LA Unified School District runs services for Los Angeles and neighboring cities, which do not share the LA Police Department. The East Bay Municipal Utilities District has a jurisdiction which is based on a collection of cities, and overlaps not-quite-perfectly with the AC Transit District (a body run jointly by Alameda and Contra Costa Counties). The policy areas a special purpose district manages are often quite granular - for example, while AC Transit runs buses, a separate transit district (SF Bay Area Rapid Transit District) - run by Alameda, Contra Costa, and San Francisco counties - runs the BART commuter rail. Despite BART running into South Bay counties, those counties do not participate in BART governance, and instead participate in the Peninsula Corridor Joint
Powers Board (San Francisco, San Mateo, and Santa Clara counties), which runs CalTrain, a different commuter rail service.
The results are... suboptimal. For example, in public transit, the result is a disjointed system where different transportation modes, and even different lines of the same transportation mode, are badly coordinated (have fun trying to get from Oakland to Mountain View by rail!). Compare with the gold standard of Germany, where Deutsche Bahn runs everything from intercity high-speed trains to local commuter rail and makes coordinated plans for the development of the transit system as a whole.
