@Taoufik K. --
The owner isn't pursuing it currently for several reasons -- he's occupied with refurbishing the rest of the house, and also, the basement is rented out for storage. I've found out that a variance would be required; it's possible but not easy to get approval and there's no guarantee of success. The building department has an aversion to below-grade units so it's harder to get approval than for an above grade project (such as attic expansion). An investment would need to be made for architecture and legal. I think the folks who are buying such buildings and condo-izing/flipping are not doing it because of the approval timeframe (could be a year or more) which would stall their entire project. It's less difficult to get approval to renovate the basement and make it an expansion of the first floor unit. Also the cost to create a unit would be much higher than I originally thought -- relocating existing plumbing, heating and electrical and adding separate systems is expensive. So the short answer is no. Would love to hear from any Boston owners with experience about this.
@Chad Duval - it has City sewer.