Higher prices seem to be much more likely the result of larger homes and more amenities.
The average cost of a new home in the United States shot up 32 percent in the past decade, and some people blame much of this increase on environmental regulations. But a new Cornell study finds no empirical evidence to support these claims. Rather, we conclude from strong evidence that higher prices are much more likely the result of building bigger homes with more amenities. Builders and developers must comply with federal regulations that include the Clean Water Act, Federal Water Pollution Control Act and the Endangered Species Act. They and others have long assumed that these environmental regulations, which seek to improve air and water quality and protect biodiversity, have thwarted development and driven the costs of new homes beyond what first-time buyers can afford.