On June 25, 2024, the D.C. Council passed the Downtown Activation Conversion Program Amendment Act of 2024, in a strategic effort to revitalize the downtown area—including portions of Dupont Circle, West End, Foggy Bottom, Penn Quarter, Chinatown, and East End—by adapting to evolving market conditions and urban needs.

The Act creates new incentives for office repositioning: construction, reconstruction, alteration, or renovation that results in either (a) a change of the building’s office use to a non-residential use or (b) an upgrade of the building’s classification to Class A. Specifically, the Act provides 15-year tax freeze for office buildings that undergo repositioning. The 15-year period begins when the mayor’s office certifies the property’s eligibility for the program. Certified properties must begin the repositioning process within three years of certification or zoning approval. Properties that have not begun repositioning within that time frame must pay the taxes that would have been due during the three-year period.

The tax freeze program complements a tax abatement program established in 2022 to encourage office-to-residential conversions in the downtown area by providing a 20-year tax abatement to projects that result in the creation of at least 10 housing units, including affordable housing units under the Inclusionary Zoning program. The two programs together are now collectively known as the Downtown Activation Conversion Program.