On July 10, 2023, Mayor Wu and the BPDA announced the launch of a Downtown Residential Conversion Incentive Pilot Program for downtown office buildings. The goal of this program is to support owners and developers of older commercial office building space in converting to residential units.
An application for the program is now available. After you have downloaded and completed the PDF application, please submit it here.
Sign up for updates to the program below.
Learn about the Program
Key Elements
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Selected developers will enter into a payment in lieu of taxes, or “PILOT” agreement with the City of Boston and the BPDA, which will provide for an average abatement of up to 75% of fair market assessed residential value for a length of up to 29 years. The PILOT agreement will require conversion of use from commercial to residential soon after the signing of a PILOT agreement.
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Fast tracked processes for both Article 80 and permitting.
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Zoning for conversion to residential where applicable per PLAN: Downtown.
Requirements
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Must complete application by June 2024 and start construction (i.e., have a full building permit) by October 2025.
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Target area is in the 121B Demonstration Project Area, however projects will be considered on a case-by-case basis anywhere in the City.
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Affordable Housing Requirement: Per BPDA-approved (pending Zoning Commission) Inclusionary Zoning Standards: 17% of all newly created units must be deed restricted affordable for households making up to 60% of the Area Median Income, and another 3% of units must be available at Fair Market Rent and reserved for voucher holders.
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Compliant with the Stretch Energy Code.
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Not designed for a complete demo and new ground-up construction.
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After permit has been pulled, the PILOT agreement will give the City and the BPDA the right to cancel the abatement and clawback any forgone tax revenues if there is evidence that the developer is not diligently pursuing the completion of construction for an incentivized project.
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Transaction Charge of 2% of gross sale proceeds for future sales for a to-be-determined length of time. This charge will be waived upon passage of the Transfer Fee Home Rule Petition, or its equivalent.
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If you have a project that you would like to convert that does not meet the requirements and qualifications listed above, the BPDA will consider all applications for their eligibility in meeting the City’s goals in this program.
Why Incentivize Conversions of Office to Housing?
Conversion of downtown offices is an important response to post-pandemic economic and workforce shifts that appear to be long-lasting. The City’s program is designed to recognize the likely benefits to increasing economic activity in Downtown Boston by increasing residential property use, and the program takes an active step to provide new options to property owners of low-vacancy office space. In addition, combining Boston’s incentives with potential state and federal incentives could bring more investment, and enhance downtown activation.
Following the release of a Downtown Revitalization Report released in October of 2022 that showed downtown office space vacancy rates are approximately 20 percent, Downtown neighborhood planners facilitated several conversations with developers to gather information on interest in residential conversions and possible pathways to achieve more housing Downtown. The BPDA also contracted HR&A Advisors Inc. to produce a report on the feasibility of office conversion in Downtown Boston and the Financial District. This research all suggested that partnership from the City was the most financially feasible path forward for private development to complete residential conversions due to the higher cost of conversions, and in this moment of high interest rates and construction costs. For more information on the program, please contact John Weil, Senior Program Manager for Downtown Conversions.
Additional Resources