Young America’s affordability crisis has political consequences

One and a half million more young adults live with their parents today than a decade ago. They’re losers … economically.

Since the pandemic, fair market rents have increased as much as 40% in Chicago, the cost of owning a car is up more than 40%, and car insurance and health care prices have spiked. Student loan debt has quadrupled since 2000, and entry-level wages haven’t kept pace with inflation.

For young people without financial or family support, it’s an affordability crisis that feels insurmountable. Cost of living was Gen Z’s top political issue in 2024; they feel the “American Dream” slipping farther away.

And it’s driving them to the extremes. While political pundits insist Gen Z is “more well-off,” than other generations, and reporters write about “the big myth of zoomers’ economic conditions” – pointing to rising wealth and low unemployment compared to previous generations – political extremists from Democratic Socialist Hasan Piker to far-right nationalist Nick Fuentes are validating the distressed generation narrative.

As Gen Z flocks to the fringes, it’s on lawmakers to bring them back and renew their belief in the American Dream. They can do this by repairing the systems holding young people back, not pushing populist quick fixes or pretending these lived experiences aren’t real.

Wealth rises when you’re living in your childhood bedroom. Low unemployment doesn’t matter if jobs on the market are temporary, low-wage, or evaporate the moment the economy hiccups or AI replaces you. The kids are scared.

The far right blames immigrants. The far left blames billionaires. Leaders propose handing out $25,000 in down-payment support or mass deportations to solve the youth’s housing problems. These extremes are wrong.

The reality is: Government regulations have spiked costs and killed opportunities for young people.

For years, lawmakers infused aspects of left- and right-wing populism into the economy through government mandates, zoning hurdles, rent regulations, and most recently, tariffs. Then they acted surprised when prices climbed and jobs plummeted.

These policies don’t work, regardless of which party implements them, and they are especially harmful for younger generations. Whether it’s California’s disastrous Prop 13, which has kept property taxes locked while home prices skyrocketed, or Florida’s plan to eliminate property taxes for retirees, these policies limit housing supply and raise costs for young and first-time homebuyers.

In New York City, voters were swayed by a Socialist candidate who promised to solve the affordability crisis and make billionaires pay their “fair share.” Zohran Mamdani’s housing platform calls for rent stabilization efforts and expanding government-funded affordable housing development. Ultimately, rent control measures will drive up the cost of housing, and public sector development will come at a high cost for taxpayers – as seen in Chicago where similar “affordable” units cost taxpayers as much as $700,000 each.

Cities such as Austin and Minneapolis, which are becoming havens for Gen Z, prove what happens when free-market barriers come down: Buildings go up, rents drop, and jobs appear.

Minneapolis voters rejected a far-left Socialist candidate for mayor who ran on a similar platform to Mamdani. Populism isn’t attractive to voters when rent is cheap. The secret to affordable living, as it turns out, is removing barriers that restrict housing supply, such as zoning, permitting, and aesthetic requirements.

On the labor front, the progressive push for a $15 minimum wage has put businesses in a chokehold for a decade. In Chicago, Mayor Brandon Johnson removed the subminimum wage, forcing restaurants to pay employees a staggering new hourly rate. As a result, restaurants closed and businesses fled. When the incentives for hiring youth and tipped employees vanished, wages began to slow and youth employment declined. Instead of creating new incentives for businesses to hire young workers, the progressive solution has been calls to “tax the rich” and pour taxpayer dollars into city-run youth job programs.

On the other side, Nalin Haley, political commentator and son of Nikki Haley, and Jarrod Wright, host of an America First-themed podcast called “The Wright Wing,” have advanced anti-immigration talking points and convinced Gen Z that workers with H-1B visas will ruin the economy, encouraging an end to the program. Now, Texas is launching investigations to evaluate the program and curbing new applicants. Meanwhile, President Trump’s tariffs are raising costs on everyday items and essentials for the “American dream” including cars and housing. Immigration crackdowns have created only political unrest, not economic security for Americans.

Cost reduction, job creation and wage growth won’t be found in government mandates or in eliminating who comes into the country.

Gen Z needs policies that increase opportunities and lower the regulatory and tax burdens. Lawmakers must reform barriers to work, such as occupational licensing and degree requirements, to expand opportunities for young workers.

Only when the American Dream feels within reach will leaders be able to pull Gen Z back from the extremes.