Wu To Launch Effort To Fill Commercial Vacancies, Expand Office Conversion Program

Following the birth of her third child in January and a high-profile congressional hearing earlier this month, Mayor Michelle Wu addressed the city Wednesday night with plans to draw more businesses downtown and produce more housing. 

At her State of the City address at the MGM Music Hall, the mayor announced a handful of new housing and economic development initiatives, including the launch of a business recruitment office.

She said the office would help "fill commercial vacancies, retain and attract talent, and continue revitalizing downtown."

The downtown area has struggled to recover from the pandemic, with office vacancy hitting 20-year highs. But the city has been pushing to draw new tenants like Pawtucket-based toymaker Hasbro, which has reportedly eyed office space in the Seaport.

The city has also prioritized efforts to boost retail and restaurant businesses through its SPACE Grant Program and the state's passage of 225 new liquor licenses, specifically for neighborhoods that have historically received little to no licenses.

"We added the most new liquor licenses since Prohibition: 225 new opportunities for neighborhood restaurants to create jobs, close gaps and build community," Wu said.

On the housing side, Wu touted the more than 11,000 units that have been built since she took office.

The city has worked with developers to convert unused office space into housing through its Downtown Residential Conversion Incentive Pilot program, which gives developers an average tax deduction of up to 75% for up to 29 years. The program launched in 2023 and was extended last year so applications could be received until December. 

And Wednesday night, Wu announced that she plans to expand the program to universities and employers looking to build housing. 

Last year, Suffolk University acquired an 11-story building at 101 Tremont St. for $30M in hopes of converting the property into student housing. The project was approved in January. At the time, city officials said other institutions were interested in converting underutilized office space for workers and students. 

"We're also working with developers to convert unused office space into more homes for families," Wu said. "By next summer, we'll have 1,000 new homes under construction in the heart of downtown."

Wu also announced Wednesday she plans to launch a co-purchasing pilot program. This program would allow multiple first-time homebuyers to combine their purchasing power to buy multifamily homes. A release from Wu's office Wednesday night says participants can receive up to 5% of their share of the purchase price as a forgivable loan from the Boston Home Center. 

"We are leaving no stone unturned when it comes to building, preserving and reimagining housing all over our city," Wu said.

The release also says Citizens Bank, NewFed Mortgage, MEP Loans, PrimeLending and Salem Five have agreed to participate in the program. In a statement included in the release, NewFed Senior Mortgage Planner Bart Reddington called the program a "creative way to generate more equity in Boston's real estate market."

"This pilot co-purchasing program is a concrete step towards making Boston more affordable to families," Reddington said.

These initiatives come after the city launched the Boston Acquisition Fund in December to act as a public-private partnership to support developers acquiring multifamily housing. The city has already supported the acquisition of 700 units in the last three years.

Earlier this month, the city provided a $10M loan for Related Affordable to convert all 347 market-rate units at the Fairlawn Estates in Mattapan into affordable housing. 

Wu also used her speech Wednesday to highlight her sustainable building initiatives, including the city's new net-zero zoning. Passed in January, the zoning requires large developments proposed after July 1 to meet net-zero emission standards once they open.

"Our climate leadership is making homes more affordable, big buildings greener and creating opportunities for young people," Wu said.