Mayor Muriel Bowser On Multi-Family Residential ~ Washington DC’s Leads in Office-to-Multifamily Conversion

 

 

 

 

🏙️ DC’s Leadership in Office-to-Residential Conversion  

 

By Karen Ann Carr | AI Contribution  

Washington, DC has been aggressively encouraging the transformation of underused office buildings into housing — a strategy aimed at revitalizing Downtown, increasing population, and strengthening the local economy. Officials, including Mayor Muriel Bowser, have highlighted that the city is now a national model for these kinds of conversions, with a robust pipeline of projects thanks in large part to targeted incentives like the Housing in Downtown (HID) program.  

Through the Housing in Downtown (HID) program DC has already converted nearly 2,000 housing units from office space. The HID program is a city incentive program created by Washington, D.C. to encourage the transformation of underused commercial and office buildings into housing — particularly in the downtown area. It does this by offering financial and regulatory incentives that make conversion projects more financially viable for developers.  

~ A C-PACE Investment ~  

The $465 million in C-PACE financing was administered through DC Green Bank, and Mavik’s investment comes through VS2, its Special Opportunities Fund. The C-PACE funds will be used to subsidize the building’s HVAC, lighting and hot water systems, in addition to improvements to the building envelope.  

Post Brothers President Matt Pestronk told The Wall Street Journal that the firm pursued C-PACE financing after larger banks were unable to make a deal.  

Theoretically, these conversions may help stabilize the Downtown commercial market and attract new residents and businesses.  

~ The Geneva — DC’s Largest Conversion Yet ~  

The Geneva is being hailed as the largest office-to-residential conversion project in Washington, DC’s history:  

📍 Location: 1825–1875 Connecticut Avenue NW (Dupont Circle area) 🏢 Scope: A former 604,000-square-foot office property will be transformed into a 15-story residential building with ground-floor commercial space.  

~ The Geneva establishes ~  

🏠 New Homes 532 total residential units, including 60 permanently affordable units — helping to add mixed-income housing in a high-opportunity neighborhood.  

💰 Financing and Impact  

The project benefits from record-setting financing:  

A $465 million Commercial Property Assessed Clean Energy (C-PACE) loan — the largest in history — plus a $110 million senior loan and tax incentives.  

Total project financing is roughly $575 million–$750 million.  

📈 Why It Matters  

Housing Supply: Adds hundreds of new homes in a city with limited residential stock in its core.  

Affordability: Incorporates affordable units as part of a market-rate project.  

Economic Activation: Helps bring more people downtown, boosting local businesses and reducing office vacancies.  

National Example: DC officials argue this approach sets a national standard for adaptive reuse of office space amid shifting work patterns and real estate markets.  

 

 

 

~ How the Housing in Downtown tax abatement works ~  

1. The Core Incentive: 20-Year Tax Abatement The HID program gives developers a 20-year break on property taxes when they convert underutilized commercial/office buildings into residential housing. This extended abatement can make projects financially feasible where conversion costs alone might otherwise be too high.  

2. Competitive, Not Automatic Developers must apply and be selected to receive HID benefits. The program has annual caps on tax abatement awards, which are structured to grow over time:  

FY24–26: ~$2.5 M available  

FY27: ~$5 M  

FY28: ~$41 M  

Future years: the prior year’s cap, plus a 4 % yearly increase.  

3. Geographic Eligibility HID applies within a specific downtown eligibility area — now expanded to include more of Near Northwest — so developers can target attractive locations for urban housing.  

4. Not a Housing Placement Program The HID tax abatement benefits developers and property owners to lower conversion costs — it does not directly assist individual renters or buyers.  

5. Strategic Impact DC estimates HID will unlock millions of square feet of residential development (about 6.7 million square feet, yielding around 8,400 new units) and help the city reach its goal of adding 15,000 new residents downtown by 2028. Projects like The Geneva are among the largest examples of this strategy in action.  

 

 

💸 How the HID Program Helps Renters & Buyers Directly and Indirectly  

1. Lower Rents Than Would Otherwise Be Possible  

The 20-year tax abatement dramatically lowers a building’s operating costs. That matters because:  

Property taxes are one of the largest ongoing expenses for landlords  

When those costs drop, the rent needed to make the building pencil out drops too  

👉 Result: rents are lower than they would be without HID, especially in high-cost downtown locations.  

This doesn’t always mean “cheap,” but it does mean:  

Smaller annual rent increases  

More mid-market units instead of only luxury pricing  

2. Guaranteed Affordable Units (Real Savings)  

Many HID projects are required to include on-site affordable housing.  

The Geneva  

60 units are permanently affordable  

Reserved for households at set income levels (often 60–80% of AMI)  

💥 For residents in those units, the savings can be hundreds of dollars per month, year after year — not temporary discounts.  

3. More Supply = Less Rent Pressure Citywide  

This is the big macro win.  

532 new homes downtown = 532 households not competing for older apartments elsewhere  

That eases pressure on rents across neighborhoods, not just downtown  

Economists consistently find:  

Adding housing — even market-rate housing — slows rent growth citywide.  

So, even if someone never lives in a converted building, they still benefit from:  

Fewer bidding wars  

More options  

Slower rent increases  

4. First-Time Buyers Benefit from Market Balance  

For buyers, especially condo buyers:  

Office-to-residential conversions often produce smaller, more attainable units  

Increased inventory helps stabilize prices  

More downtown residents strengthen the tax base — helping avoid future tax hikes that hit homeowners  

In short: more homes = less upward pressure on prices.  

5. Savings on Transportation = Real Money Back  

Living downtown means:  

Less reliance on cars  

Lower transportation costs (gas, parking, insurance, maintenance)  

For many renters and buyers, that’s thousands of dollars per year in savings — money that stays in their pocket.  

6. Healthier Downtown = More Stable Housing Costs  

Vacant offices hurt city finances. HID helps by:  

Reviving downtown tax revenue (sales, income, property)  

Supporting local businesses  

Reducing the risk of service cuts or tax increases elsewhere  

That stability matters to renters and homeowners alike — because fiscal stress often shows up as higher fees, higher taxes, or reduced services.  

🏁 Bottom Line  

Even though HID incentives go to developers, the financial benefits flow to people through:  

✅ Lower rents than otherwise possible  

✅ Guaranteed affordable units  

✅ Slower rent growth citywide  

✅ More attainable ownership options  

✅ Transportation savings  

✅ A stronger, more stable city economy  

That’s why projects like The Geneva aren’t just real-estate wins — they’re cost-of-living wins for DC residents.  

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