Massachusetts desperately needs more housing. Due to decades of underproduction, the state must build hundreds of thousands of units simply to meet demand. Until the Commonwealth does so, costs will remain too high for all, from seniors looking to downsize, to young families hoping to purchase their first home.

One solution is readily available for policymakers to help produce and maintain affordable housing: the Community Preservation Act (CPA). For more than 20 years, the CPA has served as an opt-in local tax program for municipalities across the state to fund programs, including open space, historical preservation and affordable housing.

Municipalities must spend 10 percent of CPA funds on each of these three areas and can then spend the rest of their funding as they see fit. Municipalities also have the opportunity to invest as much or as little as they want in the CPA because it is funded through a property tax surcharge and partial state match.

But a new report by the Center for State Policy Analysis at Tufts University and the Greater Boston Real Estate Board highlights how communities throughout Massachusetts have not truly utilized the CPA to confront the housing crisis. The report, “Missed Opportunities: Funding Housing Through the Community Preservation Act,” details the inability of all 195 CPA communities to adequately invest in affordable housing and how the state may address that.

One of the report’s most stunning findings is that more than 30 percent of CPA communities, or 70 cities and towns, have apparently failed to meet the minimum threshold for affordable housing funding. From cities like Fall River, to suburbs including Needham, to small towns such as Peru in the Berkshires, more than one-third of municipalities have not invested the required 10 percent of CPA funds in affordable housing.

Alongside this, urban and rural communities have proven far more willing to invest CPA funds in affordable housing than suburban communities. The report revealed how urban communities have spent about 52 percent of CPA funds on affordable housing and only about 27 percent on open space, and rural communities have spent nearly 42 percent on affordable housing and around 18 percent on open space. Meanwhile, suburban communities have spent only about 19 percent of CPA funds on affordable housing and 52 percent on open space.

Additionally, the CPA’s current format makes it immensely difficult to understand how and when municipalities are using CPA funds to actually invest in affordable housing. Under the CPA, communities may place CPA dollars into a housing trust, which counts toward their 10 percent minimum threshold. However, communities do not need to note when they plan to use the funds. As a result, dozens of municipalities have placed CPA housing dollars in a trust and provided no information as to if or how the dollars have been used.

The CPA is a powerful tool that, unfortunately, has not been used to its fullest potential in creating and maintaining affordable housing. To address this, cSPA and GBREB detailed a number of steps the state may take to bolster the decades-old policy.

The state must prioritize ensuring that CPA communities invest at least 10 percent of their program funds in affordable housing. For communities that have failed to meet this threshold, the state should consider having communities produce “make-up” housing projects. For communities that have surpassed the threshold, the state should incentivize even greater production by offering additional state funds to cities and towns that invest 20 percent of CPA funds in housing.

It is also critical that the state enforce reporting requirements around housing trusts. While municipalities should certainly have the option of placing CPA housing funds in a trust so they may grow over time, residents and the state should know the status of those funds. Having cities and towns share yearly spending summaries and specific projects details, for instance, would bolster transparency and efficiency in housing trusts.

As housing costs remain out of reach for far too many across the Commonwealth, the state must prioritize creating and maintaining affordable housing. Bolstering the CPA – a proven policy now requiring an update – will encourage urban, suburban and rural cities and towns to put much-needed funds into developing and preserving homes. This way, a previously successful policy will prove even more successful, benefiting current and future residents of Massachusetts.

Daphna Fields is the 2023 chair of the Greater Boston Real Estate Board’s Government Affairs Committee and VP of brokerage development at Gibson Sotheby’s International Realty.