Greg Vasil

We all know that Massachusetts is experiencing an unprecedented housing crisis. The state must build hundreds of thousands of new homes by 2030 to meet demand.

So it is incredibly shocking to hear that the Boston area is only expected to build around 35,000 apartments in the next five years according to RentCafe: A 10 percent decline from the number of apartments built between 2019 and 2023. Cities that already threaten Boston’s competitiveness, like Charlotte, Phoenix and Dallas, are on pace to create far more housing.

Fortunately, RentCafe’s analysis does not account for the impact recent reforms including the MBTA Communities Act and Housing Bond Bill will have on housing creation in Greater Boston, so room remains to surpass the paltry 35,000 estimate. But reforms such as these, while incredibly important, will not solve the housing crisis alone.

One policy that has proven a popular talking point to address the housing shortage is converting unused office space into apartments. The rise in remote working and a desire to shrink office footprints have left more than 1 in 5 commercial spaces vacant in Boston. At the same time, Boston’s apartment vacancy rate sits below 2 percent.

In theory, converting Boston’s unused office space into housing should be a win-win. Struggling commercial property owners can turn a profit, and more housing on the market means overall housing costs will likely decrease, aiding renters and prospective homeowners alike.

But in practice, conversions are really, really expensive, especially in the current market.

High construction costs and interest rates, which have stubbornly sat above pre-pandemic levels for years, make conversions – and all types of development – immensely costly. However, with conversions come costs including altering floor plates, window layouts, and mechanical systems. It also includes restrooms: Instead of having one or two restrooms per floor in an office building, apartment buildings must have one for each unit, including showers.

As a result, converting an office space to housing can prove just as, if not more, expensive than building housing from scratch.

Let’s Find Solutions Together

But the dual challenge of the region’s enormous housing crisis and startlingly high office vacancy rates means that elected officials and members of the real estate and business communities must unite to try and find feasible solutions. Together, we can pursue some of the options that make office-to-residential conversions a far more promising possibility.

First, increased financial incentives and public-private partnerships are essential to generating more conversions. While Boston has seen fewer than a dozen proposed conversions, Mayor Michelle Wu has enticed many of these possible projects by offering a sizable tax break to those that convert their properties. Gov. Maura Healey’s office agreed with the mayor’s approach, and invested $15 million to extend the Boston program through 2025.

However, far more must be done. In Chicago, the city recently invested more than $150 million in office-to-residential conversion, paving the way for the creation of thousands of homes, including affordable units. State and local support in Cleveland also helped convert office space into more than 1,000 homes.

If city and state officials in Massachusetts want office-to-residential conversions to succeed, then they will need to pass far more sizable tax breaks and make real investments in developments. While such efforts may represent a cost in the short term, they will prove incredibly fruitful in the long term by creating homes and turning dormant areas into vibrant, thriving ones.

Outside of investing in apartment conversions, leaders should also explore another area ripe for change: Office-to-college-dorm conversions.

Converting offices to dorms proves much easier than apartment conversions because dorms require less serious rehab work. Each unit, for example, may not need a restroom, saving time and costs on threading pipes through floors and around load-bearing walls.

Additionally, creating more student housing means more apartments available to non-college students. This is critical, considering that nearly 70,000 students rent apartments in the Greater Boston area.

Streamlining the conversion of offices to dorms, and investing heavily in office to apartment conversions, will not solve the commonwealth’s housing crisis on its own. But as we risk falling far behind our housing creation goals, and ultimately, losing out competitively to other parts of the country, we must thoughtfully pursue all options to create more homes.

Greg Vasil is the CEO of the Greater Boston Real Estate Board.