The city aims to provide property tax breaks of up to 75 percent over 29 years for downtown office-to-resi conversions.
Boston Mayor Michelle Wu has introduced a groundbreaking plan to address the housing shortage and embrace the rise of remote work by encouraging office-to-resi conversions
This marks the first financial incentive proposed by Boston to assist office owners in this office-to-resi conversion endeavor. However, the offer is time-limited, with applications being accepted in the fall and closing the following summer. To retain the tax break, approved projects must commence construction by October 25.
The specific terms of the tax break will be negotiated on a case-by-case basis and executed through payment in lieu of taxes agreements with the city and the Boston Planning and Development Agency. Notably, the office-to-resi conversions projects must adhere to certain requirements. For instance, a minimum of 20 percent of the units must be designated for affordable housing, and the buildings themselves must meet stringent energy efficiency standards.
Although the impact of this pilot program remains to be seen until the fall proposals are unveiled, there has been limited progress on conversions in downtown Boston
However, design firm Gensler’s recent study suggests that 30 to 40 percent of the examined 90 properties in the area may be suitable for office-to-resi conversions, potentially yielding a staggering 5 million square feet of converted space.
Mayor Wu’s initiative could serve as a catalyst for action, encouraging property owners to pursue office-to-resi conversions while acknowledging that some properties may not meet the necessary criteria for conversion. With the potential for significant residential expansion, Boston is at the forefront of embracing this transformative trend.
READ ALSO: AI Startup Nomic Raises $17 Million In Funding To Accelerate Development Of Open-Source AI Models