And what a crisis it is.
The average home in the city sells for $930,000, while most of the housing available for rent is not apartments, but luxury homes targeted at wealthy people on vacation.
Much like America’s Great Depression in the 1930s, this marks a serious regression in our national standard of living. But shantytowns were not prevalent in the 1920s (a decade that began with a depression) or the 1910s. Nor were they ubiquitous following the Panic of 1907, which set off one of the worst recessions in American history.
Indeed, Americans in the Great Depression faced such a cost-of-living crisis that many were forced to accept a standard of living below what their parents and even their grandparents had.
That inflation has pushed up rents so much that young Americans are moving back in with their parents at rates not seen since the Great Depression because they can’t make it on their own. Sometimes, they can’t even make it with multiple roommates.
But many people cannot move back in with family, so the car it is.
The housing problem is not limited to wealthy towns in Arizona, however. It is systemic. The monthly mortgage payment on a median-price home has doubled since January 2021, and rents are at record highs. Like the Great Depression, this disaster stems from impolitic public policy.
For the past several years, the government has spent, borrowed, and created trillions of dollars it didn’t have. The predictable result of this profligacy was runaway inflation, followed by equally foreseeable interest rate increases.
The deadly combination of high prices and high interest rates has frozen the housing market and reduced homeownership affordability metrics to near-record lows. In several major metropolitan areas, it takes more than 100 percent of the median household after-tax income to afford a median-price home.
Since rents and virtually all other prices have risen so much faster than incomes over the past three years, even renting is unaffordable today, such that many people have to go into debt to keep a roof over their heads. And for some, that’s a car roof.
This is the kind of story you might expect from a Third World country or somewhere behind the Iron Curtain during the Cold War, not the largest economy in the world—at least not outside of a depression like the one in the 1930s.
President Hoover certainly deserved some blame for the Great Depression, but so did the progressives in Congress, who came from both parties and repeatedly voted to meddle in the economy instead of allowing it to recover from the initial downturn.
Similarly, President Joe Biden deserves blame for constantly advocating runaway government spending. But today’s multitrillion-dollar deficits are also made possible by the big spenders in Congress, who come from both parties.
