Condominium Conversions

Learn more about condo conversions below or contact City Staff, at imaginesalem@salem.com, or 978-619-5685.

A condominium conversion is when a multi-family residential unit is converted from an apartment into an ownership unit. Older homes tend to be vulnerable to conversions. In Salem, over half (54%) of all homes were built before 1940. Furthermore, the pace of condominium conversions has increased over the past several years while housing costs continue to rise.

The increasing pace of conversions is particularly concerning given that the median income of renters is about $37,000 and half of all renter households (4,465) are cost burdened- meaning they are spending more on housing than they can afford leaving less money available for food, healthcare, etc. If these renters were to be displaced, they would have very few options for relocation in Salem resulting in displacement which disproportionately impacts people of color.

Existing state law provides certain requirements for conversions but generally only applies to properties with four (4) or more residential units. This statute is Chapter 527 of the Acts of 1983, captured in MGL Ch. 183A. Here in Salem, we have seen that the majority of conversions occur in our two- and three-family housing stock, and those tenants are not afforded the benefits provided by the state law.

The Affordable Housing Trust Fund Board and the Department of Planning and Community Development are currently working on a condominium conversion ordinance to provide protection for tenants facing displacement.

The proposed ordinance has four purposes:

1. To decelerate the rate of conversion of naturally affordable rental housing stock into condominiums and cooperatives, especially in multifamily residential buildings

2. To minimize residential displacement of renter households by strengthening tenant’s rights during a condominium conversion.

3. To preserve the supply of housing and diversity of housing options, in response to demographic changes such as smaller and older households

4. To permit the owner of an existing multifamily building to convert rental housing into condominium or cooperatives.

The goal is not to prohibit the conversion of rental units into condominiums, but to create a permitting path for conversions that will ensure tenants will remain housed.

HOME RULE PETITION

As stated above, state law allows communities to adopt condo conversion ordinances that protect tenants in buildings with four or more units. However, in Salem, roughly 80% percent of the buildings converted into condominiums have 2-3 units. Local action cannot lower the threshold, it requires a special act approved by through State Legislation.

The City Council voted to submit a Home Rule Petition to the state legislature that would allow the City to enact a condominium conversion ordinance for buildings containing two or more residential units. The proposed home rule petition can be found on page 40 of the January 26, 2023 City Council meeting package, linked here.

Recent Updates:

• 2024 | Legislative approval of the home rule petition, information on the bill’s progress is available here.

  • The Home Rule Petition (HRP) has been filed with the state legislature and referred to the Joint Committee on Housing. A hearing was held on October 24, 2023, where Rep. Cruz, members of the AHTF, and members of the public offered comment in support of the HRP.

  • In March 2024, the bill received a favorable vote of committee and started the process of required votes in both chambers.

  • August 2024: While the bill did not reach the Governor’s desk during formal session, City officials have been in touch with the state legislators and understand the bill to be moving forward.

  • November 2024: The Home Rule petition was approved on November 8, 2024. The City can now move forward with local consideration of the item.

Next Steps:

• City Council adoption of a condominium conversion ordinance.

• Staffing and Implementation

Last updated 11/20/2024.

Resources

Housing Strategies