Boston Mayor Michelle Wu and Massachusetts Governor Maura Healey jointly announced this week that the state will allocate an additional $15 million to Boston’s housing renovation project, in order to convert more commercial office buildings into housing.
According to the city government’s announcement, these renovation projects often cost more than constructing new housing. The state’s funding will provide up to $215,000 in assistance for each affordable housing unit, with a maximum total funding amount of $4 million per project.
If you are interested in participating in this project, you can submit an application to the Boston City government before December 31, 2025. Applicants are required to commence the renovation work by December 31, 2026.
The Downtown Residential Conversion Incentive Program, introduced by the Boston Planning and Development Agency (BPDA) as early as July 2023, has received a total of 9 applications including 412 units in 13 buildings since its implementation started in October. With the expansion of this project, it is expected to add 300 to 500 housing units.
“As we strive to make Boston a home for everyone, our office-to-housing conversion project will create more housing and greater affordability in Boston,” said Mayor Michelle Wu.
The aim of this project, according to the city government, is to incentivize property owners or developers to convert older commercial buildings into housing units, thereby increasing the housing stock in downtown Boston. At the same time, this initiative is also a response to the changing economic landscape post-pandemic.
With more people working from home after the pandemic, commercial real estate values in the Boston area have been on a downward trend. A research report released by the Boston Policy Institute in February this year predicted that the value of these commercial properties could decrease by up to 30% by 2029.
The Massachusetts government has provided assistance to housing construction and preservation several times this year. Governor Healey announced the recipients of the “2024 Affordable Housing Development Grant Awards” on June 20, and declared that a total of $227 million will be distributed to multiple towns through tax incentives and financial subsidies.