Since the beginning of the pandemic, the writing has been on the wall that downtown D.C. could use a breath of fresh air. With office vacancy rates skyrocketing, the Bowser administration has made no secret of its desire to resuscitate downtown D.C. as a livelier mixed-use neighborhood. One of the primary aims of this policy goal is to encourage the conversion of office buildings into residences. From a land use perspective, this is a bet on “if you build it, they will come.” But the market has been slow to embrace the conversion process.
Perhaps sensing the financial challenges facing property owners and developers, in March 2024, the Bowser administration announced the “Housing in Downtown” (HID) program. The HID program provides a 20-year tax abatement for qualifying new residential developments in downtown D.C. Additionally, the program exempts out-going sales from the “Tenant Opportunity to Purchase Act” for a period of 10 years after the first Certificate of Occupancy for the conversion.
The qualifying criteria are relatively straightforward, with requirements that the property be located in the downtown area, as identified in the Request for Applications, and that the proposal create 10 or more new housing units. There are requirements for developments to meet certified business enterprise, first source, and affordable housing thresholds as well.
The HID program will be administrated through a rolling application process, which began on March 22, 2024. There is a cap on total funding for the program, so applicants are encouraged to apply as soon as possible.
