Housing, Policy, and the Fight for Affordability with Jim Tobin

Jim Tobin never set out to spend 27 years at the National Association of Home Builders. He wanted to fly helicopters like his dad photographed at Sikorsky Aircraft. Then politics caught his attention, and he found himself on Capitol Hill in 1995, thinking he'd become a defense lobbyist selling guns and things that go boom. Instead, he landed at NAHB and discovered something better: an industry that builds shelter, creates wealth, and gives families a shot at the American dream.

Now as President and CEO of NAHB, Jim spends his time doing something most association heads don't: actually visiting builders. Not the big production guys with their own lobbyists, but the local chapters in San Antonio, Shawnee, and Iowa. He sits with the builders doing five homes a year, the ones dealing with permitting headaches and code changes and trying to figure out how to keep prices reasonable for buyers who are already stretched thin.

"I can't do my job here in Washington, in the press or in other parts of the country, if I don't hear what's going on in all those different markets. The builders are all facing the same issues. Degrees and difficulties are different, but the same issues. And I want them to be able to touch and feel NAHB to know that we're there to support them."

The conversation turns to what's keeping builders up at night, and Jim doesn't sugarcoat it. Interest rates that were supposed to drop haven't dropped enough. Uncertainty around tariffs and policy has builders pumping the brakes. The building year that was supposed to be flat is actually down 7 percent. The challenge, as Jim sees it, is that while everyone in government expresses strong support for more housing, the policies don't always align with that goal in terms of affordability.

Take the FHA energy code issue. The Biden administration decided any home sold to an FHA borrower had to meet the 2021 International Energy Conservation Code. Sounds reasonable until you realize only five or six states were actually on that code. Every other state would have to build to two different codes depending on who's buying. And the cost? Between 20,000 and 30,000 dollars per home in some markets. Kansas City builders can show you the same model house built across the street under different codes with a 30,000 dollar difference.

"It's an unforced error. The Biden administration was absolutely about building more homes and making housing affordable. Yet they do something like this despite all of our protestations. This is about adding cost. They chose to believe that it would be better to save people 10 dollars a month on their energy bill, but it's okay to pay 20,000 dollars more for the cost of that house. We don't agree with that premise at all."

Here's the challenge Jim sees with this approach: FHA borrowers are first-time buyers, first-generation homeowners, people who need that federal backstop to get in the door. Adding tens of thousands of dollars to their house price to save them maybe ten bucks a month on their energy bill creates a difficult tradeoff. When they can't afford the new home, they often end up buying an older, less efficient one anyway, which doesn't serve the intended environmental goals.

Jim points out something most people miss. There are 900,000 new homes being built this year, and they're already the most energy efficient homes in the country. But there are 130 million older homes out there, most built before 2000.

"If you really want, if you really care about energy efficiency in the built environment, then you have to tackle the problem of the existing housing. Stop trying to wring the neck of 900,000 homes and solve the problem of 130 million homes. Because all you're doing is making ownership and supply harder and harder, and you're pushing people to older, less efficient homes."

The conversation shifts to how local governments face a similar tension. Raising property taxes on existing homeowners is politically difficult because those people vote. Instead, impact fees and permitting costs get added to new construction, where there isn't a voter in that house yet. The builder absorbs these costs initially but ultimately passes them to the buyer, which can push homes into higher price brackets that put them out of reach for many families.

"It's a lot easier to go tax new construction through impact fees, permitting fees, extractions, because there isn't a voter in that house yet. And they also know that's the way they can stick it to people in the early days by raising the cost of new construction."

Michael raises the question of whether these dynamics might be creating a generation of renters who struggle to build wealth through homeownership. Jim acknowledges there are some who prefer higher-density development near transit, but he thinks much of the challenge comes from competing priorities rather than intentional poli