The city of Boston faces a loss of up to $2.1 billion in commercial real estate revenue as property values continue declining, according to a report from the Boston Policy Institute and the Center for State Policy Analysis at Tufts University. The publication updates findings of a February 2024 report from BPI and cSPA, which the authors now consider “outdated and overly optimistic.”
Titled Ongoing Fallout from Boston’s Empty Offices, the new report predicts that office values are likely to fall 35-45% from their 2024 levels, a drop that reflects “recent sales data and weak FY 2025 collections,” the study’s authors wrote. “This is far more than the 20-30% decline we previously anticipated.”
The study predicts a municipal budget shortfall increasing significantly over the next five years. “While there is little Boston can do to prevent office values from continuing their decline, city leaders must decide whether to: a) fill revenue shortfalls by raising property tax rates, particularly for homeowners, or b) maintain stable tax rates and budget for the new reality of reduced revenues.”
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