Boston Launches a New Program To Encourage Office-To-Apartment Conversions

By Barbra Murray

The national office sector continues to struggle with high vacancy rates, leaving partially occupied buildings and sluggish downtowns in major metropolitan cities across the United States. And at the same time, the country’s massive dearth of housing opportunities persists. Leaders at the local and state levels have been advocating solving both problems by transforming tenant-challenged office buildings into residential apartment properties, but such transformations—hindered by everything from red tape to infrastructural challenges—are easier said than done.

One leader made a notable move in an attempt to address the hindrances in the conversion process in her town. Earlier this week, Boston Mayor Michelle Wu revealed plans to launch the Downtown Office to Residential Conversion Pilot Program, which is designed to incentivize property owners, lenders, and other relevant players to transform underutilized office space in downtown Boston into multifamily housing. The Mayor’s Office of Housing will join forces with the Boston Planning & Development Agency and the City of Boston Finance Cabinet to facilitate the public-private partnership program, conceived to convince office property owners in the central business district to redevelop their occupancy-challenged office buildings as apartment towers. The carrot the program is dangling: a reduction in the property tax rate of up to 75 percent for as long as 29 years.

The goal of the program, however, isn’t limited to just adding housing. It is designed to revitalize downtown Boston as a live-work-play environment with elements that will help sustain each other: retail amenities, residential options, and a little less office space. Reinventing an office building as an apartment property is no simple feat. It’s not only costly but it is also complicated, with office infrastructure (limited bathrooms, non-opening windows) not lending itself well to a residential building. These are the same problems that other leading cities are facing today as they try to take what sounds like a great idea and make it a reality. If Boston’s program proves successful, however, it may be just the model other cities need to office conversions off the ground and make a dent in addressing the 4.3-million-unit housing deficit.

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