Boston’s commercial core is caught in a painful feedback loop, with empty offices eroding property values just as city leaders look to businesses to plug a widening budget gap. As vacancy climbs and landlords mark down buildings, Mayor Michelle Wu is pressing for a tax shift that would lean more heavily on commercial owners to shield homeowners from sharp increases.
The clash between a weakening office market and a push for higher business taxes is reshaping the city’s fiscal politics, exposing tensions between downtown employers, neighborhood residents, and state lawmakers. I see a city trying to reinvent its financial model in real time, while the physical and economic future of its central business district hangs in the balance.
Boston’s office reckoning arrives in full
Boston is no stranger to real estate cycles, but the current office downturn is different in both scale and character. Hybrid work has hollowed out the weekday crowds that once packed trains into downtown, and the city’s central business district is now wrestling with a structural reset rather than a temporary dip. The standard model that treated downtown towers as reliable tax engines and magnets for daily commuters has been “forever disrupted,” as analysts of the future of downtown real estate have warned, and Boston’s current slump is the clearest proof yet.
That disruption is showing up in hard numbers. Office landlords are contending with rising vacancies, falling rents, and a wave of lease expirations that give tenants new leverage to shrink their footprints. At the same time, the city’s budget remains heavily dependent on property taxes generated by the very buildings now under pressure, a reliance that leaves Boston particularly exposed when commercial values slide. The result is a slow-moving but serious reckoning for a city that has long marketed itself as a premier hub for finance, technology, and higher education, from the Financial District to the innovation clusters that ring Boston Harbor.
Vacancy climbs as new towers hit a saturated market
The most visible sign of the downturn is the sheer amount of empty space in the skyline. As the last wave of speculative projects wraps up, new glass towers are arriving in a market already struggling to fill older buildings. Reports show that Boston Office Vacancy Rises to 23.6% as Final Speculative Developments Come Online, a figure that would have been unthinkable when downtown space was treated as a scarce commodity…