Failure to Launch. That’s a story for much of the millennial generation and generation Z. They’re getting married later and starting families later. Worst of all, many people in their 20s and 30s say they want a family, but simply can’t afford it. Some older folks are skeptical of this excuse. After all, even after adjusting for inflation. Millennials in their 30s have about as much wealth as Gen X did at the same age, and more than baby boomers did. Yes, college tuitions are up. But the average college graduate in 2021 has only about 6500 more in debt than did the average graduate 20 years ago. But you know, where life really is getting more expensive housing, and that is no small problem. rents have doubled in 20 years, while incomes have increased by only 1/3. Home prices have almost doubled and the end of low mortgage rates has made homeownership even less affordable. More precisely, we are seeing the disappearance of the starter home, the small affordable two to three bedroom home, either a single family house or a duplex. The baby boom was sparked in part by the mass construction of 1000 square foot colonials and Cape Cod’s. But nobody’s building those anymore. If we want to help young people start and grow families, and we should, then we need to ask how to make affordable starter homes a reality again, this involves deregulation and tax simplification. Both of these changes involve government builders who would build more housing if state and local governments allowed it. Many local governments set minimum sizes for lots effectively prohibiting a homeowner from subdividing her large lot and selling half of it to someone who could build his own house there. Some towns and counties prohibit or restrict duplexes. Also, many local governments impose overly strict building regulations that don’t add to safety but do add to cost such as bans on vinyl siding. These rules effectively ban low cost starter homes, the sort of place with a yard and a front stoop that newlyweds in their 20s can afford. The tax code sometimes makes it worse. Some tax breaks for homeowners, namely the state and local tax deduction and the mortgage interest deduction. drive up the price of homes. In the long run these tax breaks benefit homeowners but think about it. Adding to the upfront costs of a house creates a barrier to entry for new families. Also, counties and cities add high quote transfer taxes at the purchase of a home. These are basically a sneaky way for governments to get money. transfer taxes also make homes more expensive to buy. America is facing a crisis of family formation. A lot of the problem is cultural and spiritual, but some of it is economic. Governments at every level should help by getting rid of the regulations and tax policies that make it harder for a new family to buy a starter home