Daily Freeman: Guest column: New York’s Scaffold Law is a major barrier to affordable housing production

By: Kevin O’Connor

New York is in the middle of a dire housing crisis. Families in municipalities across the state are struggling to find safe, stable and affordable places to live. As we seek to create housing, there are often several barriers to tackle, from the high cost of labor to expensive materials. However, there is one uniquely New York obstacle that makes it all the more difficult to build housing: the Scaffold Law.

New York is the only state in the nation that imposes absolute liability on property owners and contractors for gravity-related construction injuries, regardless of a worker’s own negligence or disregard for safety protocols. The intention behind the law, which was enacted in 1885, was to protect workers. However, this was long before stringent safety regulations went into effect, such as OSHA. Now, the law functions as a major impediment to creating much-needed affordable housing across the state.

For organizations like ours — whose mission is to create homes — the consequences are real and measurable. Insurance premiums for construction projects in New York are dramatically higher than in neighboring states. Insurance costs in New York average roughly 8 to 10 percent of total development costs, compared to 2 to 4 percent in comparable states. Liability premiums in New York are commonly two to five times higher than elsewhere. Spending $100 million dollars on insurance produces fewer than half the jobs that would be created if those same dollars were invested directly in building projects.

The Scaffold Law also injects uncertainty into project financing. Lenders and public agencies must account for the inflated insurance costs and unpredictable litigation risk. For some projects, this can be the difference between getting shovels in the ground or abandoning plans altogether. That means fewer projects pencil out, needless delays and ultimately, fewer homes get built at a time when New Yorkers can least afford it.

When you’re developing affordable housing, every unnecessary dollar spent on insurance is a dollar that cannot go toward building another unit, rehabilitating an aging property, or providing supportive services to residents. Affordable, mission-driven nonprofit builders do not have the margins to absorb uncertain insurance spikes or litigation exposure. As a result, the Scaffold Law disproportionately penalizes the very organizations building for the lowest-income New Yorkers.

We want to protect workers, and contrary to some arguments, reforming the Scaffold Law does not mean abandoning worker safety. In fact, modernizing the law would strengthen it. All 49 other states use a comparative negligence standard, which allocates responsibility proportionally. This approach encourages everyone on a job site to take safety seriously. It reduces frivolous and fraudulent lawsuits and frees up resources that can be reinvested into training, equipment, and safer worksites. In Illinois, for example, a similar law was repealed in 1995 and construction fatalities declined, indicating this reform can enhance safety.

The challenges imposed by the Scaffold Law don’t just limit housing production. It also weakens New York’s construction workforce. Statewide, construction employment has fallen 15 percent since pre-pandemic levels. While 40 states added construction jobs last year, New York lost nearly 7,000 – the largest drop in the country. When insurance costs balloon and fewer projects see the finish line, it means diminished opportunities for the skilled tradespeople who depend on steady development pipelines.

New York has set ambitious goals for addressing the housing crisis. But we cannot meet those goals if we continue to burden construction with outdated, counterproductive and costly policies. At RUPCO, one of Hudson Valley’s leading nonprofit affordable housing developers, we know it is critical that we stretch every public and private dollar as far as possible so we can build more homes for the people who need them most. Reforming the Scaffold Law is an immediate step lawmakers can take to help produce the maximum number of affordable homes. However, for over 40 years Albany has refused to act. Pending federal legislation to override the Scaffold Law on federally funded projects – such as affordable housing financed with federal tax credits – would provide the path forward.

Now is the time to reform the Scaffold Law so we can continue our mission to create homes, support people and improve communities, working towards a future our state deserves.

 Kevin O’Connor is the CEO at RUPCO