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Local funds meant to support housing are sometimes used to block it, report finds

A new study has found that — especially in the suburbs — Community Preservation Act funds often go toward open space, not housing

Downtown Peabody.Jonathan Wiggs

Back in April, officials in Peabody signed off on one of the biggest land purchases in the city’s history, acquiring 80 acres of woods near the Salem border to be preserved for community use.

The purchase wasn’t just about open space. A local developer had owned the property and considered proposing some sort of subdivision or apartment complex. City officials, namely Mayor Edward Bettencourt, wanted to block it. So Bettencourt cobbled together $7.2 million in city funds, and bought the land.

Much of the purchase cost will be covered by loans, but $2 million will be drawn from a state matching grant program over five years that is partly intended to help support affordable housing: the Community Preservation Act.

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That’s not an uncommon story.

The CPA has been widely considered a glowing success, combining local and state money to fund playgrounds, parks, and sometimes housing developments in communities across Massachusetts. But cities and towns, particularly in suburban Boston, are not using the funds to support housing at nearly the rate they are other eligible priorities like open space and historical preservation, according to a report out Wednesday.

The report, written by the Tufts Center for State Policy Analysis and commissioned by the Greater Boston Real Estate Board, found that often, suburban communities are failing to actively contribute the state-mandated 10 percent of CPA funds to specific housing projects, either neglecting the requirement or putting the money into housing trust funds with no specific plans to use it.

Instead, they prioritize funding open space and historical preservation, sometimes even using CPA money to block new housing.

“We’re in a housing crisis, and we have this great program that can create a lot of housing units,” said Evan Horowitz, the report’s author and executive director of the Tufts policy analysis center. “But we’re not taking full advantage.”

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Housing advocates came out in force to support a ballot initiative creating a Community Preservation Act in Boston in 2016.David L. Ryan

The CPA was enacted in 2000, enabling municipalities to create their own local surcharge tax to devote toward housing, historic preservation or open space, and providing a state match up to a certain percentage of the money. To date, nearly 200 communities across the state have opted in, spending roughly $2.3 billion on more than 15,000 projects over the last two-plus decades.

One of the law’s key stipulations is that each of those three designated priorities must get a slice of the pie — at least 10 percent of the proceeds in any given community — which is typically carved up by local officials and advisory committees.

To be sure, communities have poured hundreds of millions of CPA dollars into housing over the last two decades, money that has helped to finance more than 10,000 new units across Massachusetts. But the report found that, by and large, those efforts were focused in urban and rural communities, not the suburbs — where advocates say new housing is most needed.

The difference is stark. Since the CPA was created, urban and rural communities have spent 52 and 42 percent of their CPA money, respectively, on affordable housing, the report found. Suburban communities, meanwhile, have designated just 19 percent of their CPA funds to housing, while directing 52 percent of the money toward open space and recreation projects.

Moreover, some 70 communities across the state have failed to spend 10 percent of their CPA funding on housing projects. In many cases, those communities are not technically violating the parameters of the law, because instead of earmarking funds for specific projects, local officials are directing CPA funds to a housing fund in their budget.

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That’s fine, said Horowitz, if they have a plan to spend that money. But there’s no mechanism for tracking the money once it’s put into an account, said Horowitz, meaning communities could be putting aside funds to meet the standard of the law without actually using them.

“That’s missing the point of the Community Preservation Act,” said Greg Vasil, CEO of the Greater Boston Real Estate Board. “The money isn’t doing anything sitting in town accounts. It’s money at our fingertips that we’re not using effectively.”

It’s also not uncommon to have a situation like what played out in Peabody, where the push and pull between housing, open space, and historic preservation turns into housing getting effectively blocked with the help of CPA money. Boxborough officials, for example, last year used $400,000 from their CPA fund to acquire a wooded property that a developer had eyed for housing.

The Timberlake Property in Westford was purchased and preserved using Community Preservation Act funds.Jim Davis

In an interview earlier this year, Bettencourt, the Peabody mayor, argued the city had seen too much development in recent years, and that housing on the land it acquired with CPA money would have created infrastructure issues in town.

“The simple fact is that more housing in that neighborhood is not what’s good for Peabody right now,” he said.

Ultimately, the report argued that, to prevent the CPA from falling victim to the same voices that have historically prevented new housing in the suburbs, the law should be tweaked to zero in on housing.

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“There are serious gaps in the program that have prevented housing development over the last 20 years,” said Horowitz. “And there are some pretty simple changes that wouldn’t dramatically change the CPA that could allow it to be more of a tool for solving the housing crisis.”

For one, the report said, the state should enforce the 10 percent funding threshold, and perhaps incentivize communities to opt for 20 percent instead by offering priority for grant programs and subsidies. And, it said, the state should begin tracking communities’ housing trusts, or requiring officials to create specific plans for spending the money in those accounts.

Tom Callahan, chair of the steering committee for the Community Preservation Coalition, which advocates for CPA funding and adoption and was not involved in the report, said the CPA was designed so that towns could use it to fit their needs. Often, he said, that means conflict over what the best use of the funds is. But housing has become one of the most pressing issues on the local level, and Callahan said the coalition could be open to considering changes that acknowledge that.

“The CPA was created at a different time,” said Callahan, a longtime housing advocate. “And now, obviously, the housing crisis has shifted to the center of our attention, and it’s certainly worth considering whether the CPA can be a part of the solution.”

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Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him @andrewnbrinker.