How Will Office-to-Residential Conversions Boost Downtown Boston’s Economy?

Boston's office-to-residential conversion program is showing some signs of progress to convert former offices into residential units.

The Boston Business Journal reported on Tuesday, May 27, that 15 office-to-residential conversion projects are in the pipeline, with approximately 762 residential units approved or proposed. Only six months remain in the program for the office-to-residence program. 

According to the Boston Business Journal's Grant Welker, the estimated 1,500 or more people expected to move into these units is a small number compared to the approximately 13,000 people estimated to be living downtown, where most of the projects are located. This total amounts to only about 606,000 square feet, a small footprint amid the downtown neighborhood's 36 million square feet of office space.

A planned office-to-residential conversion at 31 Milk St. in Boston's Financial District is one example of the office-to-residential project that would transform the building's physical space into 110 new apartments.

According to the City of Boston Planning Department, converting previously underutilized office infrastructure to residential housing is a response to post-pandemic economic and workforce shifts. With hybrid and remote work opportunities not going away, cities like Boston have been facing challenges with how to occupy what was formerly office space in downtown communities.

Boston's program was designed to help increase economic activity in downtown Boston by increasing the amount of people living downtown and stabilizing the office market.

Following a 2022 release of Boston's Downtown Revitalization Report, the city gathered information from developers about residential conversions and opportunities to create more housing downtown. HR&A Advisors Inc. also produced a feasibility report about office conversions in downtown Boston and the Financial District. 

Studies suggested that partnerships with the city were the most financially cost-effective avenue for private developers to complete residential conversions in light of high interest rates and high costs.