To address Boston’s housing shortage and revitalize a largely vacant downtown area, the city launched a new pilot program designed to convert office spaces into housing in July 2023. The Downtown Office to Residential Conversion Pilot Program, which accepted applications last fall, is administered jointly by the Mayor’s Office of Housing, the City of Boston Finance Cabinet, and the Boston Planning & Development Agency.
Through the program, developers can get tax incentives by converting underutilized downtown office buildings into condos and apartments. By converting commercial office buildings for residential use, building owners can get steep property tax discounts of up to 75% for up to 29 years.
Breathing new life into downtown Boston
The initiative was introduced as downtown Boston continues to experience a slower pace and a more subdued atmosphere in the aftermath of the COVID-19 pandemic. In the second quarter of 2023, the Boston metro area had a record-high office vacancy rate of 19.7%, exceeding the peak during the Great Financial Crisis.
Due to expensive requirements, high interest rates, and an unsteady economy, 2022 to 2023 was also one of the slowest periods for new housing approvals in Boston since 2015.
The conversion program aims to alleviate office vacancies in downtown Boston while also addressing the city’s housing shortage. Another benefit to the program is increased foot traffic throughout the week for downtown Boston, which helps support businesses.
A tall order?
Converting office buildings into residential spaces, presents numerous challenges, however. Most of these come from the fact that office buildings and residential buildings generally have minimal to no shared structural elements.
For one, incorporating a kitchen and bathroom will not be easy, as existing floor plates might not be designed to handle these. Creating a residential building also means adding new walls, hallways, and shared amenities. Each unit will also need to be equipped with an HVAC system so tenants can control the temperature in their condo or apartment. For interior units, one of the biggest problems will be to find ways to get natural light, which makes it challenging to repurpose expansive interior spaces of office buildings.
Cost is also a major problem. The cost of retrofitting an existing building and building a new one of generally the same. Although you might be able to retain some elements like the roof, you’ll need new interior systems, walls, and elevators.
Optimism in the project
Despite the challenges, Boston Mayor Michelle Wu said that any conversions of vacant office space will be considered a success.
“One building could potentially create hundreds of new housing units that could include a lot of affordable units,” she said in an interview with GBH News last year. If we got two or three buildings downtown with a couple hundred units each, that would be a significant step.”
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