In response to the state’s ongoing housing crisis, the governor has announced the implementation of a new $10 million tax credit program to encourage the conversion of unused commercial property into living spaces.
According to the governor’s office, the state’s housing shortage continues to drive up the cost of owning or renting a home “for everyone,” and all the while commercial properties sit vacant and unused with no prospective tenants. The governor says the Commercial Conversion Tax Credit Initiative, signed into law in 2024 through the Affordable Homes Act, is another step toward tackling the problem.
“Massachusetts is moving faster to create reasonably-priced housing and revitalize our downtowns,” said Governor Maura Healey. “This new tax credit helps communities turn empty commercial space into homes – bringing people, energy and small-business customers back to main streets while tackling our housing shortage.”
The initiative will make $10 million available through a single competitive bidding round to be held this year, with project awards ranging from $2.5 million to $3 million in tax credits for up to 10% of “eligible costs.”
Eligibility for the tax credit will be statewide, but it is limited to those projects which would include 50 or more housing units, where the zoning required for the project is already in place, and where local elected leaders sign off.
Housing Secretary Ed Augustus said the initiative is focused on “jumpstarting commercial conversion to residential use.”
“A little help for these projects can have a big impact in creating the housing we need and revitalizing downtowns,” he said.
A report released by the Healey Administration in February showed that the state needs to build an additional 220,000 housing units by 2035 in order to “to stay competitive and lower costs.”
Greg Vasil, President and CEO of the Greater Boston Real Estate Board, hailed the move as a step in the right direction.
“The state must continue to do everything it can to reduce barriers to housing creation and build more homes across all price points to address the affordability crisis. Every innovative idea helps and the Healey-Driscoll Administration should be applauded for bringing important support to projects that can convert underused commercial space into residential housing. We look forward to working with the state and our members to build on these opportunities,” he said in a statement.
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