NYC proposes changes to Scaffold Law to reduce litigation costs and address the housing crisis.

The affordable housing crisis remains a pressing concern for many New Yorkers, with recent surveys indicating that over 50 percent of residents consider the rising cost of housing a potential reason to leave the city. This alarming trend serves as a wake-up call for policymakers and stakeholders alike.

A report by the Partnership for New York City titled “Excessive Litigation is Driving New York’s Affordability Crisis” highlights a crucial, yet often overlooked factor contributing to soaring housing costs: the state’s outdated legal framework. New York’s litigation expenses are 67 percent higher than the national average, a situation exacerbated by excessive lawsuits and inflated settlements. This environment ultimately burdens tenants, homeowners, and developers, further complicating the housing landscape.

As the newly appointed president and CEO of the New York State Association for Affordable Housing, it has become evident that many developers are grappling with project delays, not due to a lack of interest or investment, but rather because of escalating costs rooted in insurance premiums and other liabilities.

A significant contributor to this issue is New York’s Scaffold Law, enacted in 1885, which imposes absolute liability on property owners and contractors for gravity-related injuries, irrespective of worker negligence. New York stands as the sole state in the nation still adhering to this strict liability standard, while others have shifted towards comparative negligence laws, which consider the actions of all parties involved in an incident.

The current legal framework disregards essential elements of accountability—holding developers entirely liable even when workers violate safety protocols or are under the influence of drugs or alcohol. Reforming this statute is not merely about reducing liability; it is about ensuring fairness and cultivating a sustainable environment for affordable housing development.

As the 2026 legislative session approaches, lawmakers in Albany must prioritize replacing the Scaffold Law with a comparative liability standard. Implementing such a reform could substantially decrease insurance costs, thus allowing stalled projects to move forward.

In addition to state reform, the federal government may step in as indicated by the Infrastructure Expansion Act of 2025. Introduced by Representative Nick Langworthy, this legislation could override New York’s Scaffold Law for federally funded infrastructure projects, including affordable housing initiatives.

Reform efforts must also target fraudulent injury claims and staged accidents, which inflate insurance costs across the board. In certain neighborhoods, the expense of liability insurance can exceed ,400 per unit, a burden ultimately passed on to tenants. The frequency of lawsuits and high settlements drive general liability insurance rates to claim almost 85 percent of total premiums.

Moreover, proposed legislation such as S.5231/A.3800, sponsored by State Senator Leroy Comrie and Assemblyman David Weprin, aims to combat staged accidents and insurance fraud, aiming to alleviate the financial strain on affordable housing efforts.

Affordable housing is not merely a basic necessity; it is vital for the economic well-being and social structure of New York City. Without swift and effective reforms, thousands of affordable units could vanish, displacing residents and widening socioeconomic disparities. Every dollar squandered on excessive litigation and inflated premiums detracts from the essential funding needed to create the housing that New Yorkers urgently require.

The housing crisis is not an insurmountable challenge but rather a consequence of choices that can still be altered. By addressing the Scaffold Law and systemic fraud, stakeholders can restore balance to the legal framework and unlock vital affordable housing opportunities.

The path ahead is clear. It is time for decisive action from lawmakers to prevent further deterioration of affordable housing options and ensure accessibility for all New Yorkers.