  Most of what we know about the formation of stars, and essentially everything
we know about the formation of planets, comes from observations of our solar
neighborhood within 2 kpc of the Sun. Before 2018, accurate distance
measurements needed to turn the 2D Sky into a faithful 3D physical picture of
the distribution of stars, and the interstellar matter that forms them, were
few and far between. Here, we offer a holistic review of how, since 2018, data
from the Gaia mission are revealing previously unseen and often unexpected 3D
distributions of gas, dust, and young stars in the solar neighborhood. We
summarize how new extinction-based techniques yield 3D dust maps and how the
density structure mapped out offers key context for measuring young stars' 3D
positions from Gaia and VLBI. We discuss how a subset of young stars in Gaia
with measured radial velocities and proper motions is being used to recover 3D
cloud motion and characterize the internal dynamics of individual star-forming
regions. We review relationships between newly-identified clusters and streams
of young stars and the molecular interstellar medium from which they evolve.
The combination of these measures of gas and stars' 3D distribution and 3D
motions provides unprecedented data for comparison with simulations and
reframes our understanding of local star formation in a larger Galactic
context. This new 3D view of our solar neighborhood in the age of Gaia shows
that star-forming regions once thought to be isolated are often connected on
kiloparsec scales, causing us to reconsider models for the arrangement of gas
and young stars in galaxies.
