Matthew Gardner

When you look at the sweeping view of the Boston skyline, it is difficult to see the dual crises currently facing some of the city’s most prominent properties. Many of the class B and C office buildings that dot the cityscape have remained vacant amid the massive shift from in-person to remote work post-pandemic. At the same time, Boston is suffering from a dearth of affordable housing as rents have skyrocketed citywide.

In this scenario, converting office spaces into affordable residential housing seems like a no-brainer. On the other hand, building owners, developers and commercial landlords are already under pressure to decarbonize and retrofit office buildings to meet emissions regulations established by Boston and now in Cambridge.

BERDO Deadlines Clash with Economic Challenges

While Boston’s buildings account for nearly 70 percent of all greenhouse gas emissions, they also represent the greatest opportunity for emissions reductions. The Building Emissions Reduction and Disclosure Ordinance (BERDO) requires large buildings to report their annual energy and water use to the city and reduce their emissions over time.

Compliance with BERDO – whether in the form of fines or renovation costs – already poses a considerable burden on office buildings in questionable financial shape. With BERDO deadlines fast approaching – developers, commercial landlords and property owners of all sizes are scrambling to address their respective carbon footprints to avoid fines. As office vacancies continue to rise, these deadlines only compound the economic challenges already facing building owners.

For smart developers and financial institutions, there are multiple opportunities to reinvest into these properties in ways that meet BERDO regulations, but also make them more attractive to tenants. This could include potentially converting these properties into affordable housing or even mixed-use properties that could include retail, residences and offices. In short, Boston’s developers, landlords and property owners have an opportunity right now to turn their dual challenges into opportunities.

For large buildings, complying with BERDO is a significant undertaking, but quite commonplace. Systems must be deployed, data quality checked and resources need to be dedicated to compile and report the results. Good data systems and basic energy efficiency systems are prevalent and often available “off-the-shelf.”

However, for owners of Boston’s class B and C offices, the installed infrastructure may be archaic, and any modifications can open the proverbial “can of worms.” But with proper foresight and by approaching construction and/or renovation projects with sustainability attributes in mind from the beginning, the data shows that it can be done with minimal price premiums commonly associated with “green” construction.

Embrace Sustainability to Create New Spaces

There is a clear opportunity to embrace sustainability strategies to assess Boston’s building stock and to explore the potential to reconfigure them in a sustainable manner for other uses such as converting into affordable housing or adapting for multi-generational building needs. The city of Boston has introduced tax incentives to entice developers to convert empty buildings. Mayor Michelle Wu is offering a 75 percent discount on the residential tax bill for converted buildings, which could make the projects more feasible and even profitable.

The state wants other cities and towns to explore conversion as well. Recently, the Healey administration launched a $1 million program to help municipalities find candidates for conversion. The state will also offer $15 million in funding to incentivize larger-scale office buildings to convert to housing, which often can be more costly due to the complexity of the projects.

Massachusetts is currently offering incentives of $215,000 per unit, $4 million per project, so buildings that offer up to 20 units could be converted into multi-use properties that meet multiple goals – housing and reconfigured office spaces that reflect post-pandemic patterns for office space.

Here, the private sector, developers, and building owners are poised to play a pivotal role in helping the city of Boston – and the commonwealth – address climate change while realizing a significant return on their investments. In addition, developers and building owners should take this opportunity to innovate and create exciting new spaces across the region. The concept of live-work-play is booming in the Seaport District and has the potential for success in other areas of the state, including Gateway Cities that have a crop of empty properties that could be converted.

Leveraging sustainability strategies to evaluate incentives and opportunities to revitalize as many underutilized or vacant buildings as possible is not only good news for our housing stock, but good news for the economy and our environment.

Matthew Gardner is a co-founder and managing partner at Sustainserv, a global sustainability consulting firm. He also teaches sustainability at the Harvard University Extension School and is chair of the Associated Industries of Massachusetts’ energy, environment and sustainability committee.