The city of Boston has launched a new program to encourage underused downtown office building conversions into residential use. According to mayor Michelle Wu, the public-private partnership is to help create more downtown housing units plus generate foot traffic throughout the week to help businesses that have struggled as fewer workers return to offices full time.
Wu acknowledged the costs associated with turning an office building into a residential building can be steep, but said there may be some building owners feeling enough of an economic pinch to try.
“To make the finances work — the tremendous costs to redo all the plumbing and all of that — the property value of the commercial building has to have sunk pretty low that they’re getting desperate,” she added.
Under the program, owners of commercial office buildings downtown would be offered reduced property tax rates in return for immediately converting their buildings to residential uses. The projects would also receive help from the city to streamline the approvals process.
The program will accept applications through June 2024, with projects required to start construction by October 2025. Applicants will be encouraged to maintain retail or other public uses on their ground floors.
Vacancy rates at downtown office buildings nationwide have continued to rise, from 12.2% in the fourth quarter of 2019 to 17.8% in the first quarter of 2023, according to the real estate firm CBRE.
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