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 impact people of color.

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

The State law allows communities to adopt condo conversion ordinances that protect tenants in buildings with four or more units. However, in Salem, 78 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.

Next Steps:

• Community input to develop the condominium conversion ordinance.

• Legislative approval of the home rule petition.

  • 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. We are now waiting for the Committee to take action. Information on the bill’s progress is available here.

• City Council adoption of a condominium conversion ordinance.

• Staffing and Implementation

Last updated 9/22/2023.

Resources

Housing Strategies