Rochester Business Journal: New York’s Scaffold Law drives up affordable housing costs | Guest Opinion

By: Peter G. Florey

New York’s housing crisis has no shortage of causes – high land costs, zoning challenges, and limited public funding all play their part. However, there’s one little-known factor driving up the cost of building affordable homes that’s long overdue for reform: New York’s Scaffold Law.

First enacted in 1885, this state law imposes automatic, absolute liability on property owners and developers for gravity-related injuries on construction sites – no matter the circumstances, no matter who is actually at fault. Even if a worker’s own actions cause an accident, the law still holds the developer fully responsible. New York is the only state in the country that still operates under this rule. Forty-nine other states use contributory negligence as the legal standard to assess liability.

While the law may have once served a purpose, it no longer reflects modern construction standards or today’s comprehensive worker safety regulations. What it does now is inflate insurance costs, invite staged accident fraud, and most significantly, make it harder to build affordable housing in a state that desperately needs it.

Insurance premiums for affordable housing construction have ballooned as a result, now accounting for 8 to 10% of total project costs across the state. And that’s before factoring in delays, legal expenses, and the increasing difficulty of even finding insurers willing to write policies in New York’s volatile legal environment. In fact, a new report from the Buildings and Trade Employers’ Association found that insurance costs in New York have skyrocketed and are 200 to 500% higher than in other states of similar sizes and populations. Insurance premiums in other states like New Jersey, Massachusetts and Illinois typically run between 1 to 3% of project costs. When contractors and developers become burdened with exorbitant insurance costs, it diminishes housing production. Every dollar lost to inflated insurance premiums is a dollar not spent on building more units or keeping rents affordable.

At a time when every public dollar is meant to stretch as far as possible, especially with nearly $80 billion in federal investment for infrastructure and housing flowing into New York, this outdated liability framework is draining critical resources and reducing the number of homes we can build for low- and moderate-income families.

That’s why we are urging support for the Infrastructure Expansion Act of 2025 (H.R. 3548), introduced by Representative Nick Langworthy. This federal bill offers a straightforward solution: shift from absolute liability to a comparative negligence standard, just like every other state uses. It would allow courts to fairly weigh who is at fault in a construction accident, whether it’s the developer, contractor, or worker.

This change wouldn’t diminish workplace safety. It wouldn’t let bad actors off the hook. What it would do is bring New York in line with the rest of the country, reduce unnecessary legal and insurance costs, and open the door to building more affordable housing.

It is no secret that New York needs to remove roadblocks to affordable housing development. Across the state, communities are grappling with a severe housing shortage that makes it difficult to attract or keep the people, jobs and commerce that enable New York to thrive. Simply put, there is not enough housing supply to meet demand, especially when it comes to affordable housing. This imbalance, in no small part, is due to excessive regulations and exorbitantly high insurance costs.

New York risks losing development opportunities to neighboring states where costs are lower and liability frameworks are fairer. The state’s housing crisis demands action but an affordable developer may choose to build in New Jersey or Connecticut instead, simply due to cost, worsening New York’s housing shortage.

Advocates of an “abundance agenda,” have called on blue states and cities to eliminate statutory and regulatory impediments preventing construction of needed housing and other critical infrastructure. The Scaffold Law is a prime example of such an antiquated policy that hinders progress.

While Albany continues to resist reform, the federal government cannot ignore how state-level legal frameworks are undermining the effectiveness of federally subsidized affordable housing projects. If Congress is serious about maximizing the impact of federal infrastructure and housing investments, it must consider how laws like the Scaffold Law are driving up costs and delaying delivery.

Reforming this century-old statute won’t solve the housing crisis on its own, but it will remove a major barrier to progress. New York needs more affordable housing. Let’s not allow a law from 1885 to stand in the way of building for the future.

Peter G. Florey is President of the New York State Builders Association and Principal at The D&F Development Group.