Photo courtesy Office of Massachusetts Governor Maura Healey

WORCESTER – March 15, 2024 – Today, Governor Maura T. Healey and Lieutenant Governor Kim Driscoll joined Secretary of Housing and Livable Communities Ed Augustus and MassHousing CEO Chrystal Kornegay to announce the Commercial Conversion Initiative, a new planning program that will revitalize downtown and other commercial areas and spur housing creation.

The planning initiative, based at MassHousing, will assist municipalities outside Boston in advancing the redevelopment of vacant and underutilized commercial buildings, and position properties to take advantage of new capital funding proposed under the Governor's Affordable Homes Act. MassHousing has allocated up to $1 million in planning funds for technical assistance funding under the program.

"One of the most effective ways to make housing more affordable is to convert vacant or underutilized office space into housing. This new initiative from MassHousing will be transformative for our downtowns and communities," said Governor Healey. "Combined with the proposed investments in our Affordable Homes Act, we can make it easier for first-time homebuyers, renters, seniors and everyone to find affordable places to live."

"Synergy’s Chestnut Place project is a great example of how we can use the resources we already have at our disposal to build more housing and lower costs for all," said Lieutenant Governor Driscoll. "The Commercial Conversion Initiative will help make more projects like this possible across the state."

Cities across the United States are responding to changes in the nature of work by promoting residential uses in their downtowns. Examples of successful commercial-to-residential conversions exist across Massachusetts, but small and mid-sized cities face particular barriers in pursuing commercial-to-residential redevelopment at scale.

MassHousing's Commercial Conversion Initiative addresses gaps in opportunity, capacity and funding by offering new planning resources that will accelerate the reuse and redevelopment of underutilized commercial buildings across Massachusetts.

The new planning program will work with participating municipalities to identify the best candidates for commercial-to-housing conversions; conduct floor plan and feasibility analyses for well-positioned buildings; and assist in lowering regulatory barriers to redevelopment and reuse. The program will create development-ready sites that will be poised to take advantage of implementation financing.

"Buildings like One Chestnut Place were home to bustling offices when going to work meant going to an office for many people," said Secretary of Housing and Livable Communities Ed Augustus. "While offices remain a vital part of our cities, they simply don’t use as much space as they once did. With the Commercial Conversion Initiative, we can fill them with people who, instead of leaving our cities at 5 o’clock, will live here, shop here and infuse our communities with energy."

"Our new Commercial Conversion Initiative will promote growth and vitality in downtown areas, while addressing the statewide need for new housing," said MassHousing CEO Chrystal Kornegay. "MassHousing is excited to support the Healey-Driscoll Administration’s efforts to strengthen communities and make Massachusetts a more vibrant and affordable place to live."

Governor Healey announced the new planning program at Chestnut Place in Worcester, an underutilized commercial property slated to be redeveloped into 198 new market-rate apartments. With the building’s anchor tenant set to relocate to new space elsewhere in Worcester, the Chestnut Place property is primed for conversion to residential uses.

The Commercial Conversion Initiative will help position communities for state resources such as the state’s Housing Development Incentive Program (HDIP) and resources available through the Affordable Homes Act to advance redevelopment projects.

The $1 billion tax legislation Gov. Healey signed last year significantly expanded the HDIP program, in order to meet the need for new housing across Massachusetts.

The Healey-Driscoll Administration’s Affordable Homes Act proposes additional resources to help communities meet the need for new housing. The Affordable Homes Act proposes a new $275 million fund to support innovative housing strategies, including repurposing commercial and office space for housing development.

The Affordable Homes Act also proposes creating an $800 million Affordable Housing Trust Fund, which would be used to create or preserve affordable housing, and $100 million for the Commonwealth Builder program. This program creates a permanent capital resource for the construction of affordable single-family homes in Gateway Cities and other similar communities.

The Commercial Conversion Initiative is intended to help more properties move through the planning process quickly, positioning them to compete for enhanced resources from last year’s tax legislation, as well as proposed capital sources from the Affordable Homes Act.

Technical assistance under the Commercial Conversion Initiative is open to all communities outside Boston with walkable downtowns and buildings with underutilized upper-story commercial space. Interested municipalities may access more information and apply to participate by visiting the program page on www.masshousing.com/programs-outreach/commercial-conversion.

"Affordable housing is of the utmost importance to us here in the City of Worcester," said Worcester Mayor Joseph M. Petty. "I am incredibly grateful for the work that the Healey-Driscoll Administration has been doing to make sure that the state of Massachusetts can expand sustainably and account for our growing population."

"The One Chestnut Place project perfectly illustrates how municipalities can work together with the state and private developers to repurpose underutilized properties to create new housing," said Worcester City Manager Eric D. Batista. "The apartments replacing the former office space will add much needed inventory to our housing stock. Furthermore, the condominiums at 80% Area Median Income constructed next door at Two Chestnut Place will provide critical affordable homeownership opportunities for our residents. Thank you to Governor Healey and her administration, including Secretary Ed Augustus, and David Greaney and Synergy, for their commitment to these projects and providing critical support through HDIP and other community development programs."

"Synergy is proud to participate in the Healey-Driscoll Administration's Commercial Conversion Initiative as we begin the largest office-to-residential conversion in Massachusetts at Chestnut Place. We aim to revitalize the area while also providing much-needed housing options for the community of Worcester," says David Greaney, CEO of Synergy. "We look forward to collaborating with the Healey-Driscoll administration, MassHousing, The Planning Office for Urban Affairs, and the City of Worcester to bring new life and economic opportunity to the underutilized properties in in the Commonwealth."

About MassHousing

MassHousing (The Massachusetts Housing Finance Agency) is an independent, quasi-public agency created in 1966 and charged with providing financing for affordable housing in Massachusetts. The Agency raises capital by selling bonds and lends the proceeds to low- and moderate-income homebuyers and homeowners, and to developers who build or preserve affordable and/or mixed-income rental housing. MassHousing does not use taxpayer dollars to sustain its operations, although it administers some publicly funded programs on behalf of the Commonwealth. Since its inception, MassHousing has provided more than $30 billion for affordable housing. For more information, follow us on Twitter, Facebook and LinkedIn.

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