Developer KS Partners has filed plans with city officials to convert 15 Court Square, center, into 90 apartments. Amid ongoing public safety concerns, neighborhood rents are falling according to a new report from brokerage The Collaborative Companies. Photo by James Sanna | Banker & Tradesman Staff

While Boston’s commercial real estate post-pandemic struggles have been well-publicized, new research shows cracks in the downtown residential market.

The downtown neighborhood was one of only two in Boston where apartment rents have declined in the past 12 months, according to market data issued this month by The Collaborative Companies, a Boston residential brokerage.

Downtown Boston neighborhood groups say a variety of public safety problems need to be addressed as the city struggles to recoup lost property tax revenues from its commercial real estate or face steep budget cuts.

“There is no economic development if you don’t have public safety,” said Rishi Shukla, co-founder of the Downtown Boston Neighborhood Association, referencing the failure of Mayor Michelle Wu’s proposal to increase the share of property taxes paid by commercial properties. “None of this is going to matter if people don’t want to do business or live here.”

While effective apartment rents in the urban core rose 2 percent year-over-year, according to the TCC report, downtown rents dropped 5 percent. All other neighborhoods had positive rent growth as high as 6 percent with the exception of Brighton, which declined 0.4 percent.

The report pulls data from listings at large, professionally-managed rental properties.

Of more than 300 respondents to a November survey by the Downtown Boston Neighborhood Association, more than two-thirds said they feel less safe downtown than they did a year ago.

Encampments began cropping up on Boston Common in early spring, and increases in homelessness in the nearby Ladder District were evident by summer, said Shukla, a 25-year resident of the downtown neighborhood. The group has 1,000 members who live in nearly 30 residential buildings.

Rising Safety Concerns

Public drug use and dealing, aggressive behavior and reckless operation of motorized scooters have become part of the landscape. On Beacon Hill, parents dropping off children at the Park Street School have had to navigate human waste and discarded needles.

“The tour guides are fearing for their safety,” said Colin Zick, president of the Beacon Hill Civic Association. “It’s these repeated issues that are not one-offs.”

At a hearing hosted by the City Council’s Public Safety and Criminal Justice Committee on Nov. 26, Michael Nichols, president of the Downtown Business Alliance, said violent crime and drug dealing have surged to unacceptable levels in 2024.

“A safety reputation built over time is only as good in most cases as your most recent personal experience, and the situation experienced by residents, workers and visitors in our city’s broader downtown this year was often totally unacceptable,” Nichols said.

A Boston Police Department cruiser turns down Batterymarch Street in downtown Boston on Dec. 12, 2024. Public safety concerns are rising among downtown Boston residents, prompting the latest calls for a comprehensive strategy to attack crime and drug use in the neighborhoods surrounding Boston Common. Photo by James Sanna | Banker & Tradesman Staff

Revolutionary Spaces, which manages the Old State House and Old South Meeting House historic sites in Downtown Crossing, had access to its ticket booth disrupted by a cluster of on-call food delivery drivers and their motorized scooters, President Nat Sheidley said.

“The piece of the downtown that folks following the Freedom Trail follow is not a very welcoming and inviting space,” Sheidley said. “There are empty storefronts and there is construction and not a lot of activity along the street.”

According to an October market report by Cambridge-based brokerage ABG Commercial, the retail vacancy rate in Boston’s Financial District was 5.1 percent, the highest of 47 submarkets in Greater Boston. The report listed Downtown Crossing vacancies at 2.6 percent, citing Costar data.

The owner of Black Seed Halal Grill on Tremont Street said drug users congregate outside the restaurant and deter walk-ins.

“We’re trying to sell food, and people don’t feel safe enough to look into the store if they’ve never been before and come check us out,” Youssef Ibrahim told councilors at the hearing.

Dual Sources of Downtown Decline

Boston Common and surrounding neighborhoods were dealt a double blow in recent years, civic group representatives say.

In 2020, the pandemic emptied a large portion of the daytime workforce as office tenants went remote. Then in 2023, the removal of encampments from the Mass & Cass corridor displaced homeless people to other neighborhoods in Boston, Cambridge and Somerville.

Neighborhood, civic and cultural organizations battling disruptive behavior and random violence have been forced to adapt to the new atmosphere downtown.

After partnering with the city on a $4.5 million repair to the Brewer Fountain and adding seating near the MBTA’s Park Street station headhouse, the Friends of the Public Garden had to relocate events such as concerts by Berklee College of Music students to the Liberty Mall area near Beacon Street, President Elizabeth Vizza said.

“Many people have not come back to their offices, and that clientele we had, where you couldn’t get a place to sit, just became less-used and occupied by drug dealers and people being preyed on by drug dealers,” Vizza said. The organization plans to move programming to various parts of the Common and Public Garden next summer, she said.

“Everyone is realistic that when you live and work in a major U.S. city, you’re going to see some homelessness and drug use,” the Beacon Hill Civic Association’s Zick said. “We’re not looking to create a Disney World, but there were severe public threats in terms of harm to people.”

A person walks past a delivery driver’s scooter parked on School Street in downtown Boston on Dec. 12, 2024. Downtown residents’ safety concerns extend to dangerous driving by scooter drivers working for app delivery companies. Photo by James Sanna | Banker & Tradesman Staff

Hope for Conversions and Retail

Stakeholders say the hybrid work model and decline in foot traffic downtown have left a void.

Citywide office vacancies have plateaued around 18 percent, according to CBRE, including a 26.5 percent vacancy rate in Downtown Crossing and 19.6 percent in the Financial District at the end of the third quarter.

As building values drop and some landlords fall behind on mortgage payments, transitions to alternate uses will restore some of the lost foot traffic, real estate experts say.

Steps from the Common, Suffolk University is expanding its residential presence with a proposed conversion of an office building at 101 Tremont St. into a dormitory containing up to 280 beds.

Lured with city tax breaks and state subsidies, some developers are investing in residential conversions, primarily at largely-vacant class B office buildings. To date, the city has received applications for more than 650 housing units through the program, mostly in the Downtown Crossing and Financial District neighborhoods, including at least two last week totaling nearly 150 units.

The Wu administration has awarded $10.2 million to local businesses to fill vacant storefronts. The most recent $2.9 million round announced in November includes seven properties in the downtown area.

DA Faulted for Inaction

Downtown groups credited the Wu administration and City Hall departments with responsiveness to specific issues, such as prompt action following reports to the city’s 311 automated system which handles non-emergency complaints.

Since November, the city has been more aggressive in responding to 311 complaints, Shukla said. Teams of police and outreach workers were visible during last week’s holiday tree lighting ceremony on the Common, he said.

Steve Adams

What’s lacking, Shukla said, is a comprehensive strategy, including an accelerated timeline for a replacement for the Long Island Shelter that previously housed approximately 800 people experiencing homelessness.

The Boston Harbor Islands shelter and treatment center closed in 2014, after the bridge to the mainland was declared unsafe. Plans to rebuild the bridge are delayed by a lawsuit filed by the city of Quincy.

Shukla faults Suffolk County District Attorney Kevin Hayden for failing to seek tougher sentences for violent crimes, or to issue stay-away orders from Boston Common for repeat offenders.

“The general public assumes that the Boston Police Department is not doing its job,” Shukla said. “The district attorney doesn’t have their back, and that is a known challenge.”

Suffolk County District Attorney’s office spokesman James Borghesani said the office routinely “asks for stay-away orders for repeat offenders and those charged with serious crimes” on the Common, but judges decide whether an order is imposed.