Boston plans to offer ‘up to 75%’ tax breaks to office-building owners that convert spaces into housing

Like many other cities across the United States, Boston is facing a housing crisis. Meanwhile, because so many companies moved to remote or hybrid workforce norms when the COVID-19 pandemic forced people to stay at home, many offices have remained empty for years—a Downtown Revitalization Report published in October showed that about 20% of all commercial space in downtown Boston are vacant.

Boston Mayor Michelle Wu is addressing both at once through a new “Downtown Office to Residential Conversion Pilot Program,” which will incentivize commercial property owners to convert underutilized buildings to residential housing via hefty tax breaks.

“We must take every possible action to create more housing and more affordability so that Boston’s growth meets the needs of current and future residents,” said Wu in a statement published by the Boston Planning and Development Organization about the initiative, which was announced Monday. “This program will help us take advantage of the opportunity we have to rethink downtown as a space where people from all over come together to collaborate, create, live, and play.”

Starting in the fall when applications open, the program will offer owners of commercial office buildings in the downtown area a reduced property tax rate of up to 75% if they immediately convert their buildings to residential use. The discount is based on research included in the city’s PLAN: Downtown study, which found that discounting taxes at that rate for “up to 29 years could provide a strong incentive to encourage conversion,” the statement says.

The program, which is going to be overseen by the Boston Planning and Development Organization, the mayor’s office and the City of Boston Finance Cabinet, will be implemented through a public-private partnership that enables the city and the building owner to enter a payment in lieu of taxes (PILOT) agreement. Approved projects will receive assistance from the planning organization to streamline departmental building requirements.

To read the complete article, visit American City & County.