Study finds more than thirty percent of Massachusetts communities don’t meet CPA mandates MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

A new report finds more than a third of Bay State communities participating in the Massachusetts Community Preservation Act aren’t meeting the legal mandate that ten percent of the assessment on local property taxes be spent on housing. The Missed Opportunities: Funding Housing Through the Community Preservation Act report looked at how the 195 communities that are part of the CPA are spending funds from the program. The Tufts Center for State Policy Analysis study found housing is not being funded nearly as much as open space, recreation and historic preservation. Each of those, according to the study, has “consistently drawn more than forty percent of the funding, while housing projects consistently received less than twenty percent of all CPA funding.”

Signed into law in 2000, the CPA enables communities to create a local and dedicated fund for open space and historic preservation, affordable housing development and acquiring and developing outdoor recreational facilities. How does it work? Bay State municipalities that have joined the CPS can impose a surcharge on local property tax bills to fund all of the above. They are also supported with additional funding partially matched by the state. By doing this, though, they must commit to spending ten percent on housing in each area. While the program has been beneficial to creating affordable housing in urban and rural areas, it was less successful in suburbs where open space is being prioritized over affordable housing.

“Though the Community Preservation Act has proven incredibly popular across Massachusetts, our research reveals how serious gaps exist within the program that have dramatically impeded the creation and maintenance of affordable housing,” said Evan Horowitz, executive director of The Center for State Policy Analysis at Tufts University. “Our findings highlight how the state may improve the CPA to help the program reach its full potential and make it a more pivotal tool in helping the state overcome the housing crisis.” Greg Vasil, CEO of the Greater Boston Real Estate Board, calls the CPA a vital tool communities can use to increase housing “We hope this analysis by Tufts and its recommendations shed light on ways that the CPA, a program we have supported since its inception, can be strengthened to create more housing and more meaningfully address the housing crisis,” Vasil said.

Massachusetts is not immune to the housing crisis people are facing nationwide with rising interest rates, rents and home prices.
The report found the Bay State “faces an unprecedented housing crisis that has contributed to the departure of more than 100,000 residents since the beginning of the COVID-19 pandemic, putting the long-term economic vitality of the region in jeopardy.” The report found that since the CPA took effect, less than five percent of projects involved creating new housings and instead funds primarily went toward the upkeep and maintenance of units. When new housing is created, the spending in urban areas is substantially more than in the suburbs.

Other findings include towns occasionally double counting new home production, as well as dozens of communities placing CPA funds in housing trusts and not reporting how they were later used despite requirements to do so. “Communities across Massachusetts must play their part in meeting affordable housing requirements and helping the state overcome the housing crisis,” said Kate Franco, board chair of the Greater Boston Real Estate Board. “By enforcing and even strengthening the CPA, the state has an opportunity to send a clear message that it is committed to making the Commonwealth of Massachusetts more affordable.”

The report offers recommendations to boost housing production including: Offering additional state funding to communities committing a minimum twenty percent of their CPA dollars to affordable housing with those meeting this threshold given priority access to state grants and subsidies. Ensuring communities that do meet minimum requirements earmark at least ten percent of CPA revenue for affordable housing with those not meeting the requirement having to support additional “make-up” housing projects. Enforcing the reporting requirements of housing trusts.

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