Burns Realty is currently converting 263 Summer St. into 77 units, while keeping the iconic “Boston Wharf Co.” sign on the building’s roof. Photo by James Sanna | Banker & Tradesman Staff
Developers would get another 12 months to submit office to residential conversions and qualify for tax breaks under a proposal by Boston Planning Department leadership.
The deadline to submit applications would be extended from Dec. 31 through the end of 2026. The Boston Planning & Development Agency board is scheduled to review the proposal at Thursday’s meeting.
Developers say conversions’ financial feasibility is becoming more difficult as a growing pool of bidders drives up the price of a limited inventory of office buildings that are suitable for residential use.
The program offers a 75 percent property tax abatement for 29 years for qualifying properties. Originally, it was focused on the downtown core and portions of Fort Point and South End, but is available for properties citywide.
“This recommendation is based on the continued challenges facing the office market, the interest from developers to see the program extended and the need for the tax abatement to make the office to residential conversions more financially feasible, especially downtown,” Boston Planning Department staff wrote in a memo on the proposal.
Since it launched in 2023, the program has received 21 applications that could create 1,264 housing units at 26 buildings. Overall, the projects would remove over 1 million square feet of office space from the city’s inventory.
Currently, one project has been completed and four others are under construction, representing 251 housing units in over 200,000 square feet of former office space.
The volume of residential conversions has yet to put a significant dent in the city’s office vacancy rate.
According to data from brokerage Cushman & Wakefield, the direct office vacancy rate in Boston was 15.6 percent at the end of the third quarter. Nearly 31 million square feet of vacant space exists in the market, comprising 1,401 buildings.
