Man, do we love to fight.
In our online culture, we’ve got lots of fights. Men vs. women, race debates, and some of our favorite fights are generational. Boomer versus Millennial. Boomer versus Zoomer. Sometimes there’s real discourse buried in there.
The reality is every generation feels angst about the folks coming up behind them, and most generations feel judged and their concerns dismissed by their parents. Going all the way back to World War I, generations judged the fitness of the young men who would go off to fight World War II.
But it doesn’t have to be this way. Yes, the demographics on many issues, especially housing reform — check out the quotes there — are polarized by generation.
Young people feel trapped in a system they were born into, one that looks nothing like the American Dream they were promised. That’s real. And it’s nearly invisible in a politics run by people in their sixties and seventies—even eighties.
But the way we build housing and grow our communities doesn’t actually serve anyone well. It’s static. It answers to political pull and graft — who you know, who lobbied, who got the variance — not to what families need or what a builder can dream up.
And some of the most invisible victims of our building and tax codes are older people. Especially single boomers. They got in when the getting was good, sure, but the same system that let them in has locked them in.
Here’s the part the fight keeps you from seeing: the big house grandma can’t get out of is the exact house your family can’t get into. She’s not hoarding it. She’s trapped in it. And the day she’s free to move is the day it comes up for sale — for you. Her exit is your entrance.
This was never young against old. It’s all of us against a system that bolted the doors shut.
Let me explain.
You know her
Maybe she’s your grandmother. Maybe she’s your mom. She’s in her seventies, in the house where she raised you — or raised your dad. Three bedrooms. Four, if you count the one that’s been a sewing room since 2013. The kids are grown and gone. The stairs are getting harder every year. The yard is more than she can mow, and most summers a neighbor’s kid does it for her.
Ask her, and she’ll tell you she’d love something smaller. A one-story place. A little cottage. A townhouse near the grandkids. Three out of four Americans over fifty say they want to stay in the home they built their life in as they age—and most who expect to move say cost is what keeps them from changing homes.
She is not the villain of this story. She is not hoarding anything. She is stuck. And the same walls that trap her are the barriers between you and your first house.
The mismatch
This might not apply to you specifically, dear reader, but it is a social problem when we zoom out to the big picture. Redfin ran the Census numbers this spring, and the result is stark: empty-nest baby boomers — households of one or two adults, no kids at home — own 28% of every three-bedroom-plus home in America. Young families with kids own 16%. Barely more than half as much. And it’s way worse in our largest metro areas where the jobs are.
Those same empty-nesters owned 27.7% of the big homes a decade ago. Today they own 27.8%. Their share didn’t move; why?
A Redfin agent in Philadelphia put it plainly: the empty nesters want to downsize but can’t find a small, move-in-ready place in their price range, so they stay — which means younger families can’t find the bigger house they need. Old and young, frozen in the same jam, wanting to trade places but neither can.
So how did we build a country where seniors can’t move out of a house that’s too big for them, and a whole generation behind them can’t move in?
The mortgage
When a homeowner locks in a low rate, the odds they’ll ever sell drop 18% for every point the market rate rises above it. That’s the FHFA’s own finding — the federal government’s housing agency, measuring the thing the federal government’s own policy created. They call it lock-in, and it froze the resale market solid. The agency estimates between 1.3 and 1.7 million home sales simply never happened as rates climbed.
More than half of all mortgages in America are still under 4%. Today, the going rate is about 6.7%. So even the owner who’d love to move does the math, sees a monthly payment that doubles for a smaller house, and stays put.
Grandma might not even carry a mortgage — nearly six in ten boomers own their homes free and clear. She’s not stuck for money. She’s stuck for options. The freeze is why nothing small is available for her to move into. The market has no open doors, because policy taught a whole country not to open one.
I’m not necessarily arguing for lower interest rates right now; that might have worse inflation tradeoffs for everyone, but I am observing that the government sets these rates through the Federal Reserve; this is the result of public policy.
The tax
In about a dozen states, the day you buy a house, the government caps how fast your property tax can climb — as long as you don’t move. Stay forty years, and you’re taxed on a fraction of what the house is worth. Move, and the number resets to today’s value.
Good for people who don’t move, terrible for folks who need to.
In Miami, a family that bought a median home in 2023 owes nearly three times the property tax of the neighbor in the identical house who’s owned for it twelve years. So the tax code hands your grandmother a bill for the privilege of downsizing — the smaller place can carry the bigger tax. Economists have measured the effect: assessment caps add years to how long people stay put. We built a tax that punishes her for moving, and then we wonder why she doesn’t.
The capital gains
When you sell your home for more than you paid, the first slice of profit comes out tax-free — $250,000 if you’re single, $500,000 if you’re married. Sounds generous. Except those two numbers were written into law in 1997 and never touched since, while home values have climbed more than 260%.
A widow — single filer, so half the exclusion — who’s owned a house in a neighborhood that appreciated for thirty years can blow right past her cap without owning anything anyone would call fancy. And the government takes its cut of everything above the line. Unless she does the one thing the code rewards: never sell. Die in the house, and her heirs inherit it with the entire lifetime of gain erased — no tax at all.
Milton Friedman once said something very true: we are a family society as much as we are an individualist society. Of course. But our tax laws and proposals often miss that fact: leaving your children with $440,000 in assets vs $110,000 is a tremendous incentive not to move.
The illegal cottage
Say she beats all three hurdles to moving. Say the rate doesn’t scare her, the tax reset doesn’t sting, and the profit clears the cap. She still slams into the last wall — the one this whole movement is about: There just isn’t enough small houses.
The small home she wants to move into is illegal; the law won’t allow her to build in the neighborhood she wants to stay in. The little cottage in her daughter’s backyard. The granny flat over the garage. The townhouse down the block. In most of America, zoning codes forbid all of it — single-family-only lots, minimum lot sizes, parking mandates piled on top. Only 18 states broadly allow the backyard cottage — the ADU by right. Everywhere else, the permission bureaucracy stands in the way.
Think about what that means.
She wants less house.
The market wants to give her less house.
A builder would happily build her less house.
And the government stands in the doorway and says no.
Her exit is your entrance
You know these people too. They’re in their thirties or early forties. They have one kid and they want the space for a second. A third bedroom. A yard. A place where the grandparents can visit without sleeping on an air mattress. They are not “delayed adults.” They are the adults trying to do exactly what previous generations did: form a family and put down roots.
The houses that would let them do it are already occupied.
Empty-nest baby boomers own 28% of every three-bedroom-or-larger home in America. Millennials with children own only 16%. That gap exists in every major metro in the country. The people who need the space don’t have it. The people who no longer need it can’t leave it.
This was never a competition between generations. It is a traffic jam.
When the rules, the tax code, and the lack of smaller homes keep the grandmother frozen in the house that is now too big for her, that house never comes on the market. The young family that would move into it stays stuck in a place that is already too small. The next family that would have taken their smaller place never gets a turn either. One locked door holds an entire chain of households in place.
Her exit is their entrance.
Government: the hidden villain
Your grandmother didn’t do this to you. She bought a house under a set of rules and lived a whole life inside them — same as you’re trying to do right now. She didn’t write the lock-in effect. She didn’t pass the assessment cap. She didn’t set the 1997 exclusion or draw the zoning map back in 1957. She’s obeying the same map you are. She’s just trapped on a different square of it.
The boomer isn’t the villain. The government is.
Which is the good news hiding inside the grim one. Someone wrote every one of those policies. Which means someone can repeal every one of them. This is man-made scarcity. Men can unmake it.
And in places, they already are. California — of all places — passed portability in 2020, so a senior can carry her low tax base to the new home, and the reset penalty disappears. Arkansas made the backyard cottage legal by right. A bill is sitting in Congress right now, with cosponsors from both parties, to double that 1997 exclusion and finally tie it to inflation. None of this is exotic new ideas.
Free the grandmother, and you free the grandson. Legalize the small home, and she has somewhere to go — and the big one opens up for your growing family at a price you can afford. Fix the tax so moving doesn’t cost her, and the frozen market starts to thaw for everyone standing outside it. There is no version of this where she wins, and you lose, or you win, and she loses. You were always on the same side. The system just needed you fighting each other, so you’d never look up and notice the government who created the conflict.
Come home
So the next time the generational food fight kicks off online — boomer versus zoomer, who had it easy, whose fault it all is — remember the grandmother in the house that’s too big. She didn’t trap you. She’s trapped too. And the day we tear down the permission structure that is preventing her from realizing a new dream for her life is the day a whole generation finally gets to come home.
The American Dream isn’t dead. It’s being blocked.
Let’s rebuild the American Dream together.
