Many cities are pleading for office-to-resi conversions as remote work takes over and a housing shortage persists across the country. Most aren’t going as far as Boston is planning.
Mayor Michelle Wu has proposed property tax breaks of up to 75 percent over 29 years for downtown office conversions, the Boston Business Journal reported. It’s the first financial incentive the city has proposed providing to office owners.
The catch is that it will be a limited time offer. The city expects to start taking applications in the fall, but close the door at the start of the following summer. Construction on approved projects will need to start by Oct. 25 if the owners don’t want to hand back the entire tax break.
Terms of how the tax break functions would be negotiated on a case-by-case basis. They will be implemented through payment in lieu of taxes agreements with the city and the Boston Planning and Development Agency.
There are a few notable requirements of conversions, which can either be for apartments or condos. First, at least 20 percent of units will need to be designed for affordable housing. Second, the buildings will also need to meet high energy efficiency standards.
The impact of the pilot program won’t be seen until proposals open up in the fall, but it has largely been crickets on the conversion front in downtown Boston — this might help inspire some movement on that front, though there will still be many who have properties that don’t meet the specifications needed for conversions.
Design firm Gensler recently increased its estimate of the number of buildings in downtown Boston that could warrant a conversion. In a study of 90 properties, Gensler found 30 percent to 40 percent may be worth a conversion. That could yield as much as 5 million square feet of conversions.
— Holden Walter-Warner
Read more
Commercial
New York
Coming soon to Midtown: Office-to-resi conversions
Development
New York
Stars aligning for resi conversions
Commercial
New York
Just 2 percent of US office market slotted for conversion