Andrew Mikula

Whenever I watch a town meeting speech or read an op-ed whose author is opposed to the MBTA Communities Act, I play imaginary bingo. I’ve got “one-size-fits-all” and “local control.” Traffic-related concerns take up three spaces in a row. But the center space on the bingo card? The idea that the MBTA Communities Act, also known as “Section 3A,” is an “unfunded mandate.”

Section 3A is the 2021 Massachusetts state law that requires cities and towns with access to transit to create at least some zoning capacity for multifamily housing. Under the 1981 Local Mandate Law, the state can’t impose direct costs on municipalities unless they either provide the funding to pay for those costs or the community votes to accept them.

The idea that Section 3A triggers the Local Mandate Law is the basis for many serious attempts to exempt certain towns, including a pending case before the Massachusetts Supreme Judicial Court brought by the town of Marshfield. Oral arguments in the Marshfield case could occur as soon as February, shortly after Attorney General Andrea Campbell has said her office may bring legal action against the remaining noncompliant communities.

Marshfield Acts on Auditor’s Finding

State Auditor Diana DiZoglio first determined that Section 3A was an “unfunded mandate” under the Local Mandate Law in February 2025, emboldening ten towns to bring court cases seeking exemptions, one of which later dropped its lawsuit. In June, a Superior Court judge dismissed the remaining cases, finding the claims of negative financial impacts on the municipalities from Section 3A to be too “speculative” and “generalized.” Of those municipalities, only Marshfield has appealed.

In a legal brief filed in November, Marshfield lays out two claims for the “unfunded mandate” argument. One focuses on the impacts of the development itself – the infrastructure and service costs associated with having more emergency calls, cars on the road, and children in the schools. This argument is exactly the kind of speculative and unsubstantiated claim that got the first case dismissed.

In fact, several academic studies conclude that local tax revenues from multifamily development usually exceed the public service obligations created, and the up-front costs of infrastructure improvements in Massachusetts are mostly borne by developers.

Further, academic research has found that new construction in areas with existing development is, on average, more fiscally positive than development in previously undeveloped areas. This suggests that municipalities can make choices about how they comply with Section 3A to more than justify the added costs that will truly be borne at the local level, like expanded fire and police services.

The second claim Marshfield makes is potentially more compelling.

The town argues that, to comply with Section 3A, they had to self-fund the process of “evaluating and drafting proposed zoning bylaws and presenting them to Town Meetings.” The Local Mandate Law explicitly exempts “incidental administration expenses,” but Marshfield argues that the Section 3A compliance process was too “unusually complex” and “out-of-the-ordinary” to be considered incidental. Admittedly, housing advocates have used similar phrases to assert that Section 3A didn’t go far enough to spur production.

Some Gray Areas in Case

There are, of course, some gray areas with the administrative complexity argument as well. The state has allocated funding for technical assistance with Section 3A compliance, but only after the initial mandate was passed. The differential timing of the mandate and the state aid was a core aspect of State Auditor DiZoglio’s unfunded mandate determination in February.

That said, plaintiffs already made the assertion that Section 3A’s procedural compliance costs were unfunded in the initial round of Superior Court complaints, to no avail. The phrase “incidental administrative expenses” is up for interpretation, one being that 3A’s one-time compliance costs are inherently incidental and administrative compared to the long-term potential of the law to bolster housing production.

It’s also arguable that at least some of the complexities involved in achieving compliance – such as extensive public outreach and several drafts of new zoning – were not mandated by law, but rather a voluntary governance decision on the part of municipalities.

Marshfield will certainly make other arguments in their court case, some of them outside-the-box. For example, in advance of the June 2025 Superior Court ruling, they claimed that Section 3A “infringes upon [the] authority” of Town Meeting. But in my estimation, if there’s one assertion that might force the state to disburse payments to dozens of towns and delay the implementation of 3A, it’s that the state failed to adequately compensate municipalities for non-incidental compliance costs.

To be clear, the odds are low that the SJC subscribes to this line of reasoning. But when I watch the Marshfield case oral arguments, “unfunded mandate” will basically be a free space on my bingo card.

Andrew Mikula is a senior housing fellow at the Pioneer Institute in Boston.