We hear it time again and time again: Massachusetts must build tens of thousands – if not hundreds of thousands – of homes to meet demand. Failure to do so means residents moving out of state, which harms not only our economic competitiveness, but also things like the world-class healthcare and education systems we treasure.

Few communities have felt the pain of the housing crisis as heavily as Boston. Whether it’s seniors looking to downsize, families looking to purchase their first home, or recent graduates hoping to call Boston home for the long term, all are struggling to find somewhere they can afford in the city.

However, the city’s most vulnerable residents are struggling the most. Low-income families hoping to afford a home have to rely on Boston’s subsidized public housing program, which has left tens of thousands of applicants on a massive waitlist. Not only does this leave low-income residents in a state of uncertainty, but also it requires Boston to make major investments to meet the needs of all eligible families.

The real estate industry knows better than anyone that Boston and Massachusetts, as a whole, needs more housing, and that further investment in affordable housing is paramount. Yet one solution many claim to be essential – transfer taxes – would do far more harm than good.

A recent report we created in partnership with the Center for State Policy Analysis at Tufts University makes this clear. Implementing just a one percent tax amid a healthy real estate market, the report states, would cause communities to lose 34 cents for every dollar they raise.

Yet if, as Boston officials hope, the city had a two percent transfer tax in 2023, it would have lost nearly 60 cents for every dollar raised.

The flaws of transfer taxes don’t end there. The report points to a 2019 study commissioned by the City of Boston itself, which notes that a one percent transfer tax would lead to a one percent decline in property values, while impeding home sales.

The study also points out the immense damage a transfer tax would do to the region’s commercial real estate sector. Placing a greater financial burden on an industry whose property tax dollars play an immense role in funding essential city services, from public safety to trash collection, harming Boston in the long-term.

City and state leaders must resist passing inefficient policies like transfer taxes. Instead, officials must focus on policy solutions that will actually create more affordable housing funding and reduce barriers to housing creation.

Boston, and more than half of the communities across Massachusetts, already have an underutilized tool to create affordable housing at their disposal: the Community Preservation Act. This property tax surcharge, which cities and towns must opt into, mandates that communities invest at least 10 percent of funds in three separate areas: affordable housing, open space and recreation, and historical preservation.

Unfortunately, many CPA communities have failed to invest the required 10 percent minimum into affordable housing. Additionally, only around 20 percent of CPA funds have gone to affordable housing, according to the report done with Tufts University, while around 40 percent have gone to both open space and recreation and historical preservation. On top of this, communities lack transparency and oversight around how they spend CPA dollars, making it difficult for taxpayers to know where their money is going.

Instead of passing a new tax levied on a struggling industry, leaders should bolster the CPA, directing more funding towards afordable housing, and increasing transparency. Communities that have failed to invest the 10 percent minimum in affordable housing need to take steps to make up for this failure and play their part in overcoming the housing crisis.

Boston, as well as the state, must also embrace new policies to address the housing crisis. A number of elements in Gov. Healey’s Housing Bond Bill would do just this. The policy would invest more than $1 billion in affordable housing, including the creation of around 22,000 units. These funds will prove paramount to not only ensuring our most vulnerable residents finally secure fair housing, but also those already in housing receive repairs they have waited far too long for.

Healey’s Bond Bill would also reduce barriers around the creation of Accessory Dwelling Units (ADUs). Around 950,000 Massachusetts homes have the space for at least one ADU – units ideal for housing aging parents or for renting out. Boston alone has space for more than 7,000 ADUs. These units have proven a key component in helping California confront its housing crisis, so Boston and Massachusetts should waste no time in following suit.

The last thing Boston and Massachusetts should do amid this housing crisis is pass a policy that will increase costs and inhibit production. Transfer taxes, while well-intentioned, are an incredibly flawed policy, and simply not the way forward.

Mike Edward is the board chair of the Greater Boston Real Estate Board and president of Perry CRE.