Click here to view the entire report: Scaffold Law Economic Impact
A new economic impact study from HR&A Advisors sheds light on one of the construction industry’s most debated regulations: New York’s Scaffold Law.
Commissioned by the Building Trades Employers’ Association (BTEA), the report examines how the state’s absolute liability standard affects insurance costs, job creation, and housing development—and what might happen if New York adopted the comparative negligence model used by every other state in the country.
What Is the Scaffold Law?
New York’s Scaffold Law (Labor Law § 240/241) holds property owners and contractors fully liable for gravity-related worker injuries, regardless of whether the worker was at fault. It’s the only law of its kind in the United States.
In contrast, other states use a comparative negligence model, where liability is shared among parties based on their degree of fault.
The Cost Difference Is Significant
According to the report, insurance costs in New York City account for 8–10% of total development costs, compared to just 2–4% in states with comparative negligence. That makes NYC insurance costs 2 to 5 times higher than comparable markets.
For subcontractors in high-risk trades like steel erection, environmental work, and scaffolding, insurance can eat up 15–20% of total revenue.
What Could Change Under a Different Model?
The report models what would happen if the savings from lower insurance costs were reinvested into construction activity. The findings are striking:
For every $100 million saved and reinvested:
- $140 million in economic output could be generated (a 1.4x multiplier)
- 600 full-time jobs could be supported
- $55 million in labor income could flow to workers
Real-World Project Examples
HR&A applied this analysis to several major NYC projects currently in development:
Penn Station Redevelopment ($7 billion)
- Potential savings: $280–$560 million
- Jobs supported: 970–1,940 FTEs
- Economic output: $360–$720 million
Second Avenue Subway Phase 2 ($6.9 billion)
- Potential savings: $275–$550 million
- Jobs supported: 710–1,420 FTEs
- Economic output: $355–$710 million
Greenpoint Waterfront Development ($636 million)
- Potential savings: $25–$50 million
- Additional housing units that could be supported: 40–80
The Housing Angle
Perhaps most relevant to everyday New Yorkers: the report suggests that potential savings in residential development could support 8–10% more affordable housing units per project if reinvested.
With the city’s ongoing housing crisis, that’s a meaningful figure.
The Bottom Line
Whether you’re a developer, contractor, policymaker, or just someone who cares about NYC’s built environment, this report offers valuable data for the ongoing conversation about construction costs and liability law.
Click here to view the entire report: Scaffold Law Economic Impact