Boston’s Downtown Office to Residential Conversion: Who Might Buy?

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A few days ago, Boston Mayor Michelle Wu announced a “Downtown Office to Residential Conversion Pilot,” a public-private partnership program, or P3, to incentivize the conversion of underutilized office buildings to residential use. 

That said, what can 2022-2023 population flow and demographics tell us about who is choosing to settle in downtown Boston now, and how the city can go about finding more people like them? Let’s get into the data using Unacast Insights.

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Boston Population Flow

Total population flow to the Boston area from Q1 of 2022 through Q2 of 2023 was negative 58k, or -1.2%. The news gets worse as you zero-in on the city proper — Suffolk County has lost almost 3.3% of its population in the same time. Downtown, the rate of attrition is about 1.2 to 2.5%, depending on the zip code. 

So yes, lots of people are leaving the Boston-area, but we knew that. How about the people moving in? Let’s use the Suffolk County lens to explore the demographics a little bit.

The first thing we see is that the new people who are migrating to Suffolk County are notably older and earn a higher average median income than the people who already live there. The average age of new migrants is 39 and they carry a median average income of just more than $90,000 annually. 

That’s about 6 years older and $15,000 more income than embedded residents — against the trend of other urban counties where slightly younger people of somewhat lesser means are often the newcomers. Let’s zoom-in on some downtown zip codes and see if we can learn more. The Financial District is a smaller zip code, but ground zero for redevelopment under the mayor’s P3 plan, so let’s have a look.

The first thing we can see is that the people moving in to the FiDi are, on average, much younger (35) than the average person who lives here (55). It’s also worth noting that newcomers here only earn about 65% of what current residents do. There are loads of indicators here for market change and demands around housing, infrastructure and core services. 

Let’s take inventory of what we know so far: The Boston area is shrinking. Suffolk County, where the City of Boston is located, is also shrinking while getting older and wealthier. In the same period, the population of the FiDi, in the heart of downtown Boston, is getting much younger but also of lesser comparable means — very much a case of the young urbanite replacing the old.

Is this then the profile of a presumptive resident of the P3 to revitalize downtown Boston in the coming years and decades? Let’s have a look at the consumer segments that are already living in and frequenting downtown Boston and see how they match the profiles of these urban newcomers.

Switching to the Venues tab of Unacast Insights, we select the Boston’s Downtown Crossing area and drop our gaze to the Top Consumer Segments that regularly visit the area. Let’s see what they have in common with the people moving into the downtown core.

Four of the top five consumer segments that frequent this busy area are possible matches for the newcomer demographics we found for the FiDi — specifically, they have about the right age and education, and they earn about the same income to fit the profile of target new residents.

The most prominent consumer segment here — and they show up a lot in big city cores — is Educated Urbanites. They make good money, they probably live alone, and they’re mobile. Unquestionably, the road to Boston’s P3 revitalization success runs through this segment of the population and their constant running mates: Young Professionals and Near Urban Diverse Families

There’s also a fifth segment, Urban Low Income, that frequents the area and which will also need to be included in any future housing and rezoning plans contemplated by the Downtown Office to Residential Conversion program.

I’m going to be optimistic and assume this will all go to plan. That said, in order to get the pilot conversion program under way, the city of Boston first needs to focus on a) retaining the desired downtown residents they have and, b) developing properties and infrastructure that are attractive in the long term to young, diverse professionals seeking a new urban lifestyle. 

Statistically, these people are going to come from first, other MA counties, then second, other northeast cities (e.g. Providence, New York), and other urban and near urban areas, like L.A. There will be a number of urban areas competing for their attention in the coming years and they will be smart and selective in determining where to invest and build roots.

Boston will always attract brilliant young professionals and those seeking the best of urban living. It’s just a matter of creating an affordable residential housing and urban living environment that they’re drawn to and incentivized to stick with.

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