What’s in This Article
Key Takeaways
- Connecticut authorized $50 million in bond funds for repurposing commercial retail and office property, under Public Act 25-174, Sections 112 and 113, effective July 1, 2025.
- The statute names conversion to multi-family housing as the first eligible use of the money.
- The program runs through DECD, coordinating with the Commissioner of Housing, the Connecticut Municipal Redevelopment Authority, and the Capital Region Development Authority. It is competitive.
- A property qualifies only if it is not eligible for any brownfield program under chapter 588gg. Contamination sends you through a different door.
- The 10 percent conversion tax credit many owners have heard about is not law. It died in committee in 2025.
Connecticut has a supply of commercial buildings that no longer do the job they were built for. Half-empty office parks, retail plazas that lost an anchor, and single-purpose buildings whose purpose left town. The state’s answer, since July 2025, is a pot of bond money aimed specifically at turning that inventory into something else, and in most cases that something else is housing.
If you own one of those buildings, two things are worth separating immediately. There is real money, authorized by statute, sitting behind a competitive application. And there is a tax credit that gets talked about as though it already exists, which does not. Owners keep calling about the second one and missing the first.
The $50 Million That Actually Exists
Public Act 25-174 is Connecticut’s capital budget act for the 2026 and 2027 fiscal years. Buried at Section 112, effective July 1, 2025, it creates what the state calls the greyfield revitalization program. The dollar authority appears in two places, in two separate bond sections, one for each fiscal year.
| Fiscal year | Bond section | Amount |
|---|---|---|
| 2026 | Section 1, effective July 1, 2025 | Not exceeding $20,000,000 |
| 2027 | Section 20, effective July 1, 2026 | Not exceeding $30,000,000 |
| Aggregate cap | Section 112(b) | Not more than $50,000,000 |
Section 112(b) sets the ceiling in plain language. On and after July 1, 2025, the commissioner may use bond funds and available resources to provide “not more than fifty million dollars in the aggregate for grants or loans in support of major projects.” Note the two words doing quiet work there: loans, and major. This is not a small reimbursement program, and not all of it is free money.
Section 113 sets up a separate, nonlapsing greyfield revitalization account. Bond proceeds go in, interest earned on the balance goes in, and repayments of principal and interest on any loans made under the program get credited back to the account. Whatever is left at the end of a fiscal year carries forward rather than lapsing. Administrative costs are capped at five percent.
For context on where the number came from: Governor Lamont proposed a $50 million fund in February 2025 as part of his capital budget, separate from the two-year General Fund budget, and named it Greyfield Revitalization at the time (Hartford Business Journal). What passed in Public Act 25-174 is the authorization behind that proposal.
What Counts as a Greyfield
The statutory definition is the one that controls, and it has two parts. Both have to be true.
DECD’s own program page describes a greyfield slightly differently, as “previously developed commercial, retail, office, or knowledge-work space or property that is no longer economically viable and has significantly declined in use or occupancy.” The phrase “knowledge-work” does not appear in the statute. Read the statute for eligibility and read DECD’s notice for how a given round will be administered, rather than treating either as a substitute for the other.
Two practical readings for an owner. First, “economically nonviable in its current state” is a judgment the commissioner makes, not a box you check, which means the case has to be made rather than asserted. Second, the phrase “exhibits conditions that significantly complicate its redevelopment or reuse” is doing real work. A merely empty building with no complications is a leasing problem. A building with floor plates, mechanicals, egress, or parking that fight the next use is the thing this money was written for.
Converting Commercial Property to Residential: Eligible Costs
Section 112(d) lists the eligible uses. The order is instructive, because assessment comes first.
Eligible uses of grant or loan funds
- Architectural and engineering assessment of buildings and site readiness, to determine suitability for conversion to multi-family housing
- Demolition
- Remediation and abatement of building materials that were used in accordance with the State Building Code when the structure was built
- Renovation or conversion construction costs
- Planning studies to assess the viability of one or more potential future project sites
- Reasonable administrative expenses, not to exceed five percent of any grant awarded
That third item deserves a note, because it is easy to misread as environmental cleanup. It is not. It covers materials that were legal and code-compliant when they went in, which in a 1960s or 1970s office building usually means asbestos and lead. That is an abatement cost, not a contamination cost, and the distinction is exactly what keeps the property out of the brownfield programs and inside this one.
The first item is the one most owners should care about. The state will help pay to find out whether the building can become apartments at all. On a conversion, that answer is usually decided by things you cannot see from the parking lot: floor plate depth against window line, riser capacity, whether the structure will take new plumbing stacks, and whether egress can be made to work for residential occupancy. Paying for that study is how a maybe becomes a number.
Who Applies, and Who Does Not
Section 112(c) sets up the machinery. The Commissioner of Economic and Community Development, coordinating with the Commissioner of Housing, the Connecticut Municipal Redevelopment Authority, and the Capital Region Development Authority, may establish the program. It provides grants or loans directly to facilitate repurposing, and it can also provide grants to CMRA or CRDA so that those authorities in turn make grants or loans.
That two-track structure matters. Depending on the round and the project, the money may reach a property through a redevelopment authority rather than landing in the owner’s hands. If your building sits inside a CMRA or CRDA development area, the relevant conversation may start with that authority rather than with DECD.
The statute also requires the commissioner to develop a competitive application process and criteria, both to evaluate applications and to select projects. Competitive means meeting the definition is the beginning, not the end. And Section 112(f) lets the commissioner contract with outside entities, including nonprofits, economic and community development organizations, lending institutions, and technical assistance providers, to carry out the program.
One narrow but useful detail: Section 112(e) exempts financial assistance under this section from Section 32-462 of the general statutes. If you have been through a state economic development assistance agreement before, ask your counsel what that exemption changes for your deal.
As for timing, DECD’s program page currently shows its planning and assessment grant opportunity as closed, having opened June 3, 2026. The state has not published a date for a further round. That is the honest answer, and it argues for getting the diligence done now rather than when a notice appears.
The Tax Credit That Did Not Pass
This is the part worth reading twice, because the information circulating about it is wrong.
In the 2025 session, Senate Bill 1263 was raised as “An Act Concerning Tax Credits for the Conversion of Commercial Properties,” with the stated purpose of providing tax credits for converting commercial buildings into residential developments. The bill text was specific. A credit equal to ten percent of total qualified conversion expenditure. A cap of thirty thousand dollars per dwelling unit for an owner that is not a nonprofit corporation, or fifty thousand dollars per unit for a nonprofit owner. Vouchers issued through the Commissioner of Housing, with a copy to the Commissioner of Revenue Services.
There is a second figure in that bill worth remembering if it ever does pass, because it changes the picture. The aggregate amount of all credits the Commissioner of Housing could reserve was capped at three million dollars in any one fiscal year. At thirty thousand dollars per unit, three million dollars covers roughly one hundred units statewide, per year. As drafted, it was a modest program, not a market mover.
Lawmakers returned to the idea. In February 2026 the Hartford Business Journal reported that “state lawmakers are again advancing legislation designed to encourage the conversion of commercial properties into housing” (Hartford Business Journal). We have not verified the outcome of that later effort, and until we do, the position stated here stands: plan around the bond program, not around a credit.
Greyfield or Brownfield: Which Door
The two programs are written to be mutually exclusive, and the dividing line is contamination.
| Your situation | Likely door |
|---|---|
| Vacant or failing retail or office, no soil or groundwater problem | Greyfield revitalization program |
| Known or suspected release, contamination requiring investigation or remediation | Brownfield programs under chapter 588gg |
| Asbestos or lead that was code-compliant when installed, nothing in the ground | Greyfield. Abatement is an eligible use |
| Eligible for any brownfield program | Not a greyfield. The statute excludes it |
If the property has an environmental history, start with our guide to Connecticut brownfield funding and which properties qualify. If the building is simply obsolete, this is the right program. And if you genuinely do not know which describes your property, that uncertainty is itself the reason the assessment money exists.
What Owners Can Do Now
Establish which program the property falls under
The brownfield exclusion is a threshold question, not a detail. Get an environmental professional’s read on whether the property is eligible for any chapter 588gg program before building a case around the greyfield definition.
Write down what makes reuse hard
The statute asks for conditions that significantly complicate redevelopment. Floor plate depth, riser and stack capacity, egress, parking ratios, ceiling heights, and single-purpose build-out are the specifics that turn an assertion into an argument.
Find out whether you are in a CMRA or CRDA area
Money can reach a project through those authorities rather than directly. If your property sits in one of their areas, that is where the conversation starts.
Talk to the town before you talk to the state
Conversion to multi-family housing is a zoning question first. Municipal support, and whether the use is permitted, shapes everything downstream.
Price the alternative honestly
Conversion competes against continuing to lease, selling as is, and demolition. Demolition is an eligible use under this program too. Run all four before deciding which one you are asking the state to help fund.
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Frequently Asked Questions
Is there state money for converting commercial property to residential in Connecticut?
Yes. Public Act 25-174, Sections 112 and 113, authorized up to fifty million dollars in bond funds for a greyfield revitalization program, twenty million in fiscal 2026 and thirty million in fiscal 2027. The statute lists assessment of a building’s suitability for conversion to multi-family housing as an eligible use, along with demolition, abatement of code-compliant building materials, renovation or conversion construction costs, and planning studies. The program is administered by DECD and it is competitive.
Can I get a Connecticut tax credit for converting an office building into apartments?
Not currently. Senate Bill 1263 in the 2025 session would have created a credit equal to ten percent of qualified conversion expenditure, capped at thirty thousand dollars per unit, or fifty thousand for a nonprofit owner, with a statewide cap of three million dollars a year. It received a joint favorable substitute report from the Housing Committee and was never enacted. Lawmakers took up the idea again in February 2026. Treat the credit as pending, not available.
What is a greyfield, and how is it different from a brownfield?
Under Section 112 of Public Act 25-174, a greyfield is previously developed commercial retail or office property that is economically nonviable in its current state, exhibits conditions that significantly complicate redevelopment or reuse, and is not eligible for any brownfield program under chapter 588gg. The dividing line is contamination. Soil or groundwater problems point to the brownfield programs. Obsolescence, and asbestos or lead that was code-compliant when installed, point to the greyfield program. Read our brownfield funding guide if the property has an environmental history.
Can a private property owner apply directly?
The statute lets DECD provide grants or loans to facilitate repurposing, and separately lets it fund the Connecticut Municipal Redevelopment Authority or the Capital Region Development Authority to make grants or loans. So the route depends on the round and on where the property sits. Check whether the property falls inside a CMRA or CRDA area, because that may determine who you approach first. The commissioner is required to run a competitive application process.
Is the greyfield program accepting applications right now?
DECD’s program page shows its planning and assessment grant opportunity as closed, having opened June 3, 2026, and the state has not published a date for a further round. Because the assessment and diligence that make an application competitive take months, the useful work is the work you do before a notice appears. Confirm current status on DECD’s program page rather than relying on any summary, including this one.
Sources and Further Reading
Primary sources
- Public Act 25-174 (House Bill 7288), Sections 112 and 113 for the greyfield program and account, Section 1 and Section 20 for the bond authorizations
- DECD: Greyfield Revitalization Program, program definition and round status
- SB 1263 (2025) bill status, showing committee action and no enactment
- SB 1263 bill text, for the credit percentage and per-unit caps as drafted
- Chapter 588gg, the brownfield remediation and development programs the greyfield definition excludes
Reporting
- Hartford Business Journal, February 5, 2025, on the original $50 million proposal
- Hartford Business Journal, February 23, 2026, on lawmakers returning to conversion tax credits
Related reading on this site
- CT brownfield funding: which properties qualify
- CT housing versus commercial land, a zoning balance
- CT commercial real estate market update, midyear 2026
- The Eversource public benefits charge and who pays on a CT lease
This article provides general commercial real estate information, not legal, tax, environmental, engineering, financial, or grant-application advice. Statutory programs, dollar limits, eligibility rules, and application procedures change, and figures for any specific round are governed by the official notice of funding availability and the resulting assistance agreement. Pending legislation is not law and should not be relied on. Confirm all details with DECD and with qualified professionals before acting. Information current as of September 11, 2026.
