New York’s Affordability Crisis: How Construction Costs Are Driving Families Out
A recent New York Times report paints a grim picture of New York City’s deepening affordability crisis. While the report focuses on NYC, the reality is that these struggles extend far beyond the five boroughs. The findings are alarming: a family of four renting in the city must earn at least $47,190 to stay above the poverty threshold, yet 58% of New Yorkers—more than 4.8 million people—live below 200% of that line. A quarter of the city’s residents can’t afford basic necessities like housing, food, or medical care, and the child poverty rate now stands at 26%, affecting 420,000 children. Perhaps most shocking, the percentage of New Yorkers in poverty nearly doubled the national average in 2023, surging by seven points in just two years.
Governor Hochul and Mayor Adams have acknowledged that affordability is a growing crisis, yet they refuse to take the necessary steps to fix it because doing so would be politically inconvenient. At the heart of the problem are New York’s soaring construction costs, which drive up taxes and make critical projects like schools, hospitals, housing, and renewable energy systems far more expensive. The state ranks second to last in construction competitiveness, with a job growth rate of -2.1% and some of the highest construction costs in the world. These are not market-driven issues—they are the result of decades of disastrous policies dictated by special-interest campaign contributions rather than sound economic reasoning.
Albany’s continued expansion of costly mandates has made construction in New York the most expensive in the country. The widespread use of project labor agreements, expansion of prevailing wage laws to private projects, and the outdated and absurdly expensive Scaffold Law have artificially inflated prices. These policies have driven up housing costs, increased energy expenses, and placed an enormous burden on taxpayers. It’s no coincidence that 180,000 people left New York in 2023, fleeing to states where homeownership is still attainable. They aren’t leaving because of the weather—they’re leaving because policymakers have made it unaffordable for everyday people to live here.
There are clear, practical solutions to this crisis. New York’s prevailing wage laws, originally designed to ensure fair pay, have been manipulated to inflate wages well beyond actual local market rates. Unlike the federal government and many other states, which base wages on average local earnings, New York calculates them based on the highest union-negotiated rates, driving up construction costs by 13% to 25%, depending on the county. This unnecessary spending wastes billions in taxpayer dollars every year. The state must reform its prevailing wage laws to reflect true local wages.
PLAs are another major driver of high construction costs, requiring contractors to hire the majority of their workforce through union halls. While that may sound reasonable on the surface, the reality is that about 80% of construction workers in New York are not union members, meaning they are effectively locked out of these projects. As a result, only a small fraction of contractors—those with union affiliations—can bid on PLA projects, drastically reducing competition and driving up costs. Studies have found that PLAs inflate project costs by as much as 20%, making it harder to build affordable housing and essential infrastructure. PLAs may serve the interests of union leadership, but they come at a massive cost to taxpayers. Albany must eliminate these restrictive agreements.
The state’s affordability crisis is further compounded by rampant workers’ compensation fraud, fueled by staged construction accidents. Corrupt trial attorneys and for-profit medical providers exploit non-English-speaking workers to fabricate injuries for financial gain. These fraudulent claims drive up workers’ compensation costs, which ultimately get passed on to contractors, developers, and, in the end, every New Yorker. To stop this growing epidemic, the state must pass legislation making the staging of fraudulent construction accidents a Class E felony.
New York’s workers’ compensation system is also under relentless strain due to the Scaffold Law, a relic from the 1800s that makes employers, property owners, and contractors automatically liable for “gravity-related” injuries, regardless of worker negligence. New York is the only state that still enforces this archaic law; every other state has repealed it due to its extreme cost burden. Studies show the Scaffold Law costs taxpayers over a billion dollars every year. Repealing it would provide immediate relief by reducing liability claims and insurance costs, lowering the overall cost of construction across the state.
Albany’s leaders need to get serious about fixing this affordability crisis. The solutions are clear: eliminate PLAs, reform prevailing wage laws to reflect real local wages, crack down on staged construction accidents, and repeal the Scaffold Law. These reforms would save billions, allowing for more affordable housing, better schools, safer roads and bridges, and long-overdue investments in New York’s energy infrastructure. New Yorkers are tired of paying more for less while politicians refuse to take action. It’s time to stop playing politics and start making New York affordable again.