The following is an open letter signed by the following organizations:\u00a0Associated General Contractors of New York State;\u00a0Building Trades Employers\u2019 Association;\u00a0Business Council of New York State;\u00a0Center for New Liberalism;\u00a0Citizens Budget Commission;\u00a0Empire Center for Public Policy;\u00a0Lawsuit Reform Alliance of New York;\u00a0National Federation of Independent Business\/NY;\u00a0New York City Minority Small Business Chamber of Commerce;\u00a0New York Insurance Association;\u00a0Regional Plan Association; and the\u00a0Staten Island Chamber of Commerce.<\/p>\n
We write to respectfully request that you add the recommendation that the State reform Labor Law \u00a7 240\/241, also known as the \u201cScaffold Law<\/a>,\u201d to New York City\u2019s Fair Housing Growth Strategy.<\/a> The resulting savings would lower insurance and construction costs, supporting 8\u201310% more affordable housing units per project,\u00a0and helping fulfill the City\u2019s housing and affordability goals.<\/p>\n Although originally intended to protect workers, research from the RAND Institute supported by the\u00a0Robin\u00a0Hood\u00a0Foundation\u00a0highlights\u00a0that\u00a0the\u00a0statute\u00a0may\u00a0in\u00a0fact\u00a0contribute\u00a0to\u00a0increased\u00a0accidents.\u00a0RAND recommends reforming the law to \u201cfall in line with nationwide standards\u201d noting that reduced costs would help build an additional 38,000 units of affordable housing.<\/p>\n The\u00a0sections\u00a0that\u00a0make\u00a0up\u00a0the\u00a0Scaffold\u00a0Law,\u00a0enacted\u00a0more\u00a0than\u00a0a\u00a0century\u00a0ago,\u00a0are\u00a0an\u00a0only-in-New York statute that has been expanded by lawyers and the courts to impose \u201cabsolute liability\u201d on contractors and property owners for gravity-related injuries on worksites, regardless of the injured party\u2019s own responsibility for the accident.<\/p>\n The Scaffold Law generates a high volume of litigation and enormous settlements, even when defendants\u00a0are\u00a0only\u00a01%\u00a0at\u00a0fault.\u00a0As\u00a0a\u00a0result,\u00a0New\u00a0York\u00a0City\u00a0construction\u00a0and\u00a0development\u00a0projects face insurance premiums 2-5 times higher than in comparable markets, adding\u00a0about 7-10% to overall\u00a0construction costs. Affordable housing and disaster relief organizations struggle to build, with Habitat for Humanity citing the Scaffold Law as a\u00a0barrier to reconstruction after Superstorm Sandy.<\/p>\n Furthermore, bad actors exploit the law to defraud the legal system, further driving up insurance and construction costs. A recent New\u00a0York\u00a0Times\u00a0investigation\u00a0uncovered\u00a0that\u00a0networks\u00a0of\u00a0lawyers,\u00a0doctors, and lawsuit-funding firms are alleged to recruit immigrants, low-income individuals, and other\u00a0vulnerable\u00a0New\u00a0Yorkers\u00a0to\u00a0stage\u00a0construction\u00a0site\u00a0accidents,\u00a0undergo\u00a0medically\u00a0unnecessary\u00a0surgeries, and file fraudulent insurance claims.<\/p>\n Under the Scaffold Law\u2019s absolute liability standards and lack of defenses, these claims are quickly settled, further incentivizing fraud and increasing building expenses.\n<\/p>\n To properly address the City\u2019s housing shortage and work towards building 700,000 new homes over the\u00a0next\u00a0decade,\u00a0the\u00a0City\u00a0must\u00a0call\u00a0on\u00a0the State\u00a0to\u00a0align\u00a0the\u00a0Scaffold\u00a0Law with\u00a0the\u00a0rest\u00a0of\u00a0our\u00a0civil\u00a0liability\u00a0system\u00a0and\u00a0make\u00a0liability\u00a0proportional\u00a0to\u00a0fault.\u00a0This\u00a0is\u00a0a\u00a0commonsense\u00a0fix supported by municipal organizations and every sector of the economy.<\/p>\n By\u00a0amending\u00a0the\u00a0Scaffold\u00a0Law\u00a0to\u00a0apply\u00a0comparative\u00a0negligence\u00a0\u2014\u00a0the\u00a0same\u00a0rule\u00a0used\u00a0in\u00a0most\u00a0personal injury\u00a0cases\u00a0\u2014\u00a0juries\u00a0can\u00a0consider\u00a0the\u00a0responsibility\u00a0of\u00a0all\u00a0parties\u00a0involved,\u00a0which\u00a0will\u00a0reduce\u00a0the\u00a0volume of lawsuits, fraudulent claims, and the price of insurance. These savings will lower construction costs and encourage investment in the development of thousands of additional affordable housing units.<\/p>\n