Developers in Boston are having a hard time financing office-to-residential conversion projects, and now the state is stepping in to offer more help.
Gov. Maura Healey at a housing press conference in February
Gov. Maura Healey‘s administration this week announced $15.3M in awards for five projects totaling 856 apartments in Boston, Dedham, Springfield, Westford and Worcester.
The awards, made through the state’s Commercial Conversion Tax Credit Initiative, are helping to fund the transformation of a hotel, historic office buildings and other commercial properties into residential.
The largest award in this latest round was $4M for Synergy‘s 255-unit conversion at 294 Washington St. in downtown Boston.
Three projects are receiving $3M each: Redgate‘s 300-unit conversion of a former hotel at 219 Littleton Road in Westford, McCaffery Interests‘ conversion of four historic buildings in downtown Springfield to 99 apartments and Nordblom Co.‘s project to demolish two commercial buildings near Legacy Place in Dedham to build 154 apartments.
The final project received $2.3M: The Menkiti Group‘s conversion of a historic building in downtown Worcester to 48 apartments.
“These awards will put underused properties back to work, create 856 new apartments and help bring more residents, customers and energy to downtowns and commercial districts across the state,” Healey said in a statement.
The program was created with the $5B Affordable Homes Act that Healey signed in late 2024 to address the state’s housing shortage and affordability crisis. Her administration has made one previous award round of $8.4M for five projects totaling 339 units in Boston, Fitchburg, New Bedford, Pittsfield and Worcester.
While the region has an abundance of vacant commercial space and an urgent need for more housing, this type of government funding has proven necessary to move conversion projects forward as developers struggle to piece together financing.
The two projects in Boston proper that have received funds from the state program are a small fraction of the 29 conversions developers have proposed in the city since it launched a tax incentive program in late 2023. Just eight of those projects have started construction, while projects totaling more than 1,100 units have received city approval but haven’t started work.
