The Boston City Council met recently and voted to hold a hearing on increasing the percentage of funds dedicated to affordable housing in the Community Preservation Act (CPA) funding process to 80 percent of the total fund.

The CPA works by taking a 1 percent surcharge of property taxes – that’s one percent of the tax payment, not the assessed property – and matching it with state funds collected through real estate transactions. The CPA legislation, for which the city entered into back at the turn of the century, allows for municipalities to spend those funds on affordable housing, historic preservation and open space/recreation.

The law requires that a certain percentage of the funding must go into each category every year, at least five percent, with another five percent set aside for administration costs. The council is holding a hearing to figure out what shifting the maximum amount of funding to affordable housing – 80 percent – would do to the other categories.

District 4 City Councilor Brian Worrell introduced the order, noting that funding from the American Rescue Plan Act (ARPA) has now run out. He said the Community Preservation Committee (CPC) has set a goal to allocate 50 percent of the CPA Fund towards affordable housing. It has to be a goal, since all the projects submitted to the CPC for approval have to come from outside the office.

“In 2025, using a formula that allocated 50 percent, about $19 million of a total of $40 million went to affordable housing, leading to the creation or preservation of approximately 350 units,” he said. “If we had elected to allocate 80 percent, then we could have increased subsidies for affordable projects by $12 million. Through ARPA funding, we directed $236 million to affordable housing support and services, but now that money is gone, and there are no capital funds that go directly to affordable housing in the city.”

District 8 City Councilor and hearing co-sponsor Miniard Culpepper said he wants to use the hearing to explore what that funding redirection would mean for the other funding sources.

“Increasing the housing allocation would necessarily involve choices about the other important causes supported by the CPA, and so this hearing gives us an opportunity to understand those trade-offs, and determine whether the current allocation reflects the urgency of Boston’s housing needs,” he said.

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Culpepper said using past data, the city could have invested a significantly larger amount of funds into affordable housing.

“The Boston Municipal Research Bureau has estimated that directing 80 percent of those resources towards affordable housing between 2018 and 2025 would have generated an additional $65 million for housing-related investments,” he said.

Worrell said he felt it was worth looking at.

“I do think amid our ongoing housing crunch, it would be worth considering what it would mean to raise our threshold above the 50 percent,” he said.