Raph Frank wrote:
1) Every odd year, an 'election' is held but voters vote for parties

2) based 1), seats are distributed using d'Hondt between the parties

If you're going to have D'Hondt, or PR in general, why bother with the districting? Just use open list or a party-neutral proportional representation method like STV.

It's not impossible to introduce STV; it has been used in many places in the US, like New York's experiment with PR from 1937 to 1945. What seems to be more difficult is to keep PR in the face of compounding opposition from the established parties (though in the aforementioned New York case, they got a lot of help from the Cold War situation along with the election of Communists; they could then link communism and PR).

Also, if a party cannot be gerrymandered any seats, maybe it should be
eliminated, to allow its supporters votes to be useful.

Another question, would it be illegal to restrict candidates so that
they must come from the designated party?  This would allow each party
to run 2 candidates in their district, thus improving choice.

I suppose that if you want to steer democracy, you could redistrict so that a certain fraction (changing for each election) have narrow margins. The question would be one of stability on one hand and responsive changes on the other (analogous to feedback damping), but again, who's to say where the optimum is? That is, if one should steer democracy in the first place.
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