Governor Healy's $15M Plan to Convert Boston Downtown Offices into 400 Apartments

Governor Maura Healey's administration has announced a $15 million investment to support a Boston program aimed at converting underused office buildings into housing. This initiative, which began in October, is part of Mayor Michelle Wu's effort to revitalize downtown Boston by providing property tax breaks for such conversions.

Program Extension and Goals

Originally set to end on June 30, the program will now continue until the end of 2025, thanks to the new state funding. The goal is to encourage developers to add between 300 and 500 housing units to Boston’s central business district.

Incentives for Developers

Under Mayor Wu's program, developers can receive up to a 75% reduction in property taxes for up to 27 years. This initiative aims to attract more foot traffic to a downtown area hit hard by high vacancy rates due to the shift to hybrid and remote work during the COVID-19 pandemic. Despite the benefits, developers have been hesitant due to the high upfront costs of conversion projects.

State Funding Allocation

Arthur Jemison, director of the Boston Planning & Development Agency, explained that the $15 million from the state would be allocated to projects of at least 70,000 square feet. This includes providing up to $215,000 per affordable unit, with a maximum of $4 million per project. Jemison expects the funds to support three or four projects, with disbursements split between the issuance of building permits and certificates of occupancy.

Current and Upcoming Projects

Of the nine proposals submitted, two are nearing construction. Projects at 281 Franklin St. and the block including 85 Devonshire St. are set to begin this year, adding over 110 units collectively. Both have received approval from the BPDA.

Affordable Housing Requirements

The $15 million will come from the state's Affordable Housing Trust Fund, which usually allocates $45 million to $65 million annually statewide. The city's tax break program mandates that at least 20% of units in converted buildings be affordable, aligning with new regulations coming into effect this fall.

Broader Impact and Legislative Support

Noah Bombard, spokesperson for the Executive Office of Housing and Livable Communities, highlighted that commercial-to-residential conversion is a key strategy to tackle the housing shortage and revitalize vacant buildings. The state funding will be distributed over several fiscal years to ensure the feasibility of these projects.

The Legislature is also considering a housing bond bill that could further aid these conversions, with the House proposing $150 million in technical assistance and tax credits up to 10% of project costs.

Importance of Downtown Revitalization

The Massachusetts Taxpayers Foundation recently reported that downtown foot traffic in Boston remains about half of what it was pre-pandemic. The report argues that increasing downtown housing is crucial to revitalizing the area and encouraging office workers to return. Foundation president Doug Howgate emphasized the long-term benefits of providing incentives for these projects to restore vibrancy to downtown Boston.