Soaring construction costs are at the heart of New York’s rising prices, according to business and trade groups.

In her recent State of the State address, Gov. Kathy Hochul repeatedly emphasized the word "affordable" as she outlined plans to address living expenses while advancing infrastructure projects.

“We’re getting crushed by the high cost of living here. Can you do something to help?” Hochul said, addressing the concerns of New Yorkers facing rising costs. She highlighted that inflation has been a key factor driving up the prices of state projects, including snowplows and construction costs. “Our costs are up … everything we touch has gone up as well.”

However, construction industry groups warn that the soaring costs of building materials and regulatory hurdles are hindering progress. “Acquisition costs are expensive. Regulatory checklists become expensive,” said Brian Sampson, president of Associated Builders and Contractors. Sampson also raised concerns about the influence of labor unions, which contribute to making New York one of the most expensive places to build in the U.S.

Bruce Tanski, a developer, noted that the rising costs of materials such as plywood have significantly impacted projects. “If you were selling plywood for $10 a sheet, and because there’s such a demand, if you can get $15 a sheet, are you ever going to bring the price back down? No,” he said, pointing out the escalating cost of a 124-unit building project that went from $14 million to $24 million in just six months.

Further compounding the issue, some construction industry groups have voiced frustration over the prevailing wage laws that they claim add unnecessary costs to public projects. Sampson stated, “So many of these laws are meant to benefit such a small segment of the labor workforce, and yet it gets done and all of us pay the price again.”

While Hochul recognizes the challenges posed by rising costs, she remains committed to ambitious infrastructure and housing plans. “Build, build, build,” she stated, pledging $100 million to expand affordable housing development and $1 billion each for transportation and renewable energy projects. However, some industry representatives are urging for more comprehensive reforms to address the root causes of rising construction costs.