On Friday, September 18, 2026, the Massachusetts Supreme Judicial Court (the “SJC”) affirmed the dismissal of the Town of Marshfield’s challenge to the MBTA Communities Act (the “Act” or “Section 3A”).[1] The decision confirms that covered municipalities must adopt and maintain zoning that permits multifamily housing as of right in at least one district. It also rejects Marshfield’s four principal theories for avoiding that obligation, which are explored in more detail below. Notably, the SJC rejected Marshfield’s claim that the Act improperly imposes an unlawful mandatory direct service or cost obligation on cities and towns. For multifamily developers and lenders, the immediate takeaway is that there is now increased legal certainty around the need for all municipalities subject to the MBTA Communities Act to adopt and maintain zoning that permits multifamily development as of right. Those communities that have continued to hold out from compliance and that have challenged the state’s role in zoning have lost another challenge to the MBTA Communities Act. The SJC made it clear that municipalities must comply with the requirements of the Act and that the Act is a valid law addressing the statewide housing shortage. The MBTA Communities Act: What it Does Enacted in 2021, the MBTA Communities Act requires each “MBTA community”[2] to have at least one zoning district of reasonable size in which multifamily housing is permitted without age restrictions and suitable for families with children,[3] without a special permit or other discretionary zoning approval.[4] The statute generally requires the district to have a minimum gross density of 15 units per acre and, where applicable, location within one-half mile of a commuter rail station, subway station, ferry terminal, or bus station. Importantly, the statute is only a zoning mandate and does not compel landowners to construct multifamily housing or any specified number of units. The implementing regulations promulgated by the Executive Office of Housing and Livable Communities (“EOHLC”)[5] use community categories, minimum land area, unit-capacity calculations, density, location, and other criteria to determine compliance. Non-compliant communities are ineligible for certain state funding programs, including the Housing Choice Initiative, Local Capital Projects Fund, MassWorks infrastructure program, and HousingWorks infrastructure program.[6] The SJC previously confirmed in Attorney General v. Milton[7] that the Act imposes an enforceable, mandatory duty upon affected communities to comply. How the Marshfield Dispute Arose Marshfield, an MBTA community, held special town meetings on April 22 and December 16, 2024 to consider zoning amendments intended to bring the town into compliance with the Act, and both proposals failed. On February 10, 2025, the Select Board unanimously voted not to approve an interim action plan to help bring Marshfield into compliance with the Act. EOHLC then notified Marshfield that it was non-compliant and risked losing state grant funding. Marshfield and its Select Board sued the Commonwealth and EOHLC in Superior Court arguing that the Act and its regulations: (1) constituted an unfunded local mandate; (2) infringed upon the voting rights of town meeting voters; (3) violated the Home Rule Amendment to the Massachusetts Constitution; and (4) conflicted with other zoning laws that govern local adoption of zoning ordinances. The Superior Court dismissed Marshfield’s suit, and the SJC accepted direct appellate review. The SJC’s Decision  Marshfield’s Local Mandate Argument. Under Massachusetts’ Local Mandate Law, state laws and regulations adopted after 1980 (with some exceptions) that impose a mandatory direct service or cost obligation upon municipalities can only be binding in a municipality if the law or regulation has been accepted by that municipality (either expressly or implicitly).[8] However, costs attributable to incidental administrative expenses or the municipality’s voluntary choices about how to comply with a law do not fall within the definition of “direct service[s] or cost obligation[s]” prohibited by the Local Mandate Law. Marshfield argued that the costs of evaluating and drafting proposed zoning bylaws, presenting them at town meetings, and anticipated future expenses required by the MBTA Communities Act violates the Local Mandate Law. The SJC rejected Marshfield’s local mandate argument, holding that the only costs of compliance with the Act alleged by Marshfield (i) constituted incidental administrative expenses, (ii) were voluntary choices of the municipality, or (iii) were too speculative. Importantly, the SJC did not hold that every possible cost associated with Section 3A compliance is categorically outside § 27C.  Marshfield’s argument regarding violation of voters’ constitutional rights. As noted above, the second argument made by Marshfield was that the Act violates the voting rights of its citizens. However, the SJC held that Marshfield, as a political subdivision of the Commonwealth, generally may not challenge a state law by asserting state constitutional protections belonging to persons independent of the Commonwealth. Since the case was brought by the town and the members of its Select Board in their official capacities and alleged no personal injury, the SJC determined that they lacked standing to assert the claimed voting rights violations on behalf of the town’s voters.  Marshfield’s argument that the Act violates the Home Rule Amendment. In its decision, the SJC explained that the Home Rule Amendment[9] preserves municipal authority over local matters, but does not prevent the Legislature from imposing substantive requirements through a valid general law addressing a statewide concern. Since housing supply is not confined to any one municipality, the SJC concluded that the Act falls within the Legislature’s retained authority and does not violate the Home Rule Amendment.  Marshfield’s argument that the Act conflicts with ordinary zoning-adoption procedures. Marshfield also argued that the Act conflicts with M.G.L. c. 40A, § 5 which governs the adoption of zoning ordinances by municipalities. However, the SJC determined that Section 5 continues to govern the local procedure for adopting and amending zoning, whereas the Act imposes a substantive state-law requirement on the zoning that results. City councils and town meeting voters remain free to debate, amend, approve, or reject a proposal, but their authority does not include exempting the municipality from valid state law. A vote rejecting compliant zoning, therefore, results in municipal non-compliance; it does not invalidate Section 3A or create a statutory conflict. Practical Implications Greater durability of the statewide zoning framework. The decision removes the specific legal theories Marshfield advanced as a basis for opting out and reinforces prior authority that Section 3A is mandatory. Cities and towns, therefore, must adopt zoning and seek EOHLC approval to avoid non-compliance. Zoning capacity is not project entitlement. A compliant district must allow multifamily housing as of right, but site-plan review may still regulate layout, access, design, and screening so long as it does not operate as a disguised discretionary denial or make a compliant project impractical. Other generally applicable permitting regimes remain relevant. Municipal implementation still matters. The value of Section 3A zoning to a development project will vary by location, dimensional standards, parking requirements, parcel configuration, infrastructure, wetlands, Title 5 constraints, and market conditions. Developers should analyze the adopted bylaw or ordinance, zoning map, and any later municipal amendments or practices rather than relying solely on a community’s published compliance status. Compliance is ongoing. Under 760 CMR 72.10, EOHLC may rescind a compliance determination or require changes if a municipality materially alters the district or fails to issue permits for qualifying as-of-right development. Project teams should monitor post-compliance zoning amendments, local rules, and permitting conduct that could affect the district. Financing diligence should remain site-specific. Lenders may take additional comfort from the SJC’s validation of the statutory framework. However, as always, in making lending decisions and considering construction draw requests for any particular project, lenders should continue to be mindful of current zoning, building and other entitlement compliance, the status of non-zoning permits, etc. Non-compliant municipalities remain a live enforcement and timing risk. The case confirms that a failed local vote does not excuse non-compliance but does not directly address the remedy for continued refusal of a municipality to comply. Developers pursuing sites in a non-compliant community should account for continued uncertainty until compliant zoning is adopted, approved, and applied in practice.  The unfunded-mandate issue is narrowed, not erased. Because the SJC expressly declined to rule categorically on all compliance costs, other municipalities may try to make future arguments that specific costs associated with the Act constitute an unlawful unfunded mandate. This case nevertheless sets a demanding standard and makes clear that generalized costs of the type described by Marshfield do not fall within the unfunded mandate prohibition. Conclusion Marshfield is a significant affirmation of the Commonwealth’s authority to require qualifying multifamily zoning in MBTA communities. For developers and lenders, it strengthens confidence that Section 3A districts rest on a valid statewide mandate and that municipalities cannot rely on ordinary local voting procedures, home rule, generalized cost allegations, or third-party constitutional claims to opt out. Municipalities must continue to take steps to ensure compliance with the Act. Sullivan’s Real Estate, Permitting & Land Use, and Real Estate Finance teams are monitoring implementation of the MBTA Communities Act and related enforcement and are available to assist with zoning, permitting, development, and financing questions. [1] Town of Marshfield v. Commonwealth, SJC-13840, slip op. (Sept. 18, 2026). [2] MBTA communities are defined as municipalities that host MBTA service, “served communities” that abut a host municipality, and certain other municipalities that have become subject to the Act through M.G.L. c. 161A, § 6. [3] M.G.L. c. 40A, § 3A(a)(1). [4] M.G.L. c. 40A, § 1A. The EOHLC regulations, however, permit site-plan review and certain other constraints. [5] 760 CMR 72.00. [6] M.G.L. c. 40A, § 3A(a)(2). [7] Attorney General v. Milton, 495 Mass. 183 (2025). [8] M.G.L. c. 29, § 27(c). [9] Article LXXXIX of the Amendments to the Massachusetts Constitution.

The U.S. Congress passed the 21st Century ROAD to Housing Act (the “Housing Act”) and presented it to President Trump on June 29, 2026. At midnight on July 10, 2026, the Housing Act became law because the President did not return it to Congress within ten days (Sundays excepted). The Housing Act includes a wide range of housing reforms designed with the goal of making housing more available and affordable.  This alert focuses on the impact of the Housing Act on institutional investor ownership of single-family rental homes.  The Housing Act does not prohibit institutional investor ownership of manufactured homes. The section of the Housing Act impacting institutional investor ownership of single-family rental homes is Section 1001 (the Section is titled “Homes Are for People, Not Corporations”).  The primary impacts under Section 1001 are (i) a prohibition on purchases of single-family homes (with important exceptions) and (ii) the creation of a “Renter Outreach Resource” managed by the federal government.  Section 1001 uses a number of defined terms, which are summarized in Appendix A to this alert.  The defined terms are indicated in this alert in italics.  The most important – and most extensive – defined term is excepted purchase, which includes, among other programs, purchases of single-family homes pursuant to build-to-rent programs and purchases of single-family homes from other large institutional investors. No Requirement to Dispose When the U.S. Senate passed a version of the Housing Act in March 2026, the legislation included a controversial, perhaps even unconstitutional, provision requiring institutional investors to dispose of certain single-family homes not later than seven years after the date of purchase.  A relief to such institutional investors, the Housing Act, as enacted, does not include that requirement to dispose. Prohibition on Purchases (with Several Exceptions) The Housing Act prohibits the purchase of single-family homes by large institutional investors, excluding any excepted purchase or any purchase of a single-family home in connection with a restructuring or other reorganization of ownership of single-family homes that were owned or purchased on or before the date of enactment of the Housing Act.  The prohibition on purchases takes effect on January 7, 2027 (180 days after the date of enactment of the Housing Act) (the “Effective Date”) and is repealed on January 7, 2042 (15 years after the Effective Date). Excepted purchases (i.e., those not prohibited) are described in detail in Appendix A under the defined term “Excepted Purchase”, but generally include many of the common methods by which institutional investors in single-family rental homes acquire such homes, including but not limited to: (i) build‑to‑rent programs, (ii) renovate‑to‑rent programs, (iii) repossessions, (iv) foreclosures, (v) purchases from another large institutional investor, or (vi) combinations of (i) through (v). Enforcement of Prohibition on Purchases The Secretary of the Treasury, or the Attorney General at the request of the Secretary of the Treasury, may bring an action against a large institutional investor that violates the prohibition on purchases for a civil penalty in an amount that is not more than $1,000,000 per violation, or three times the purchase price of the property involved, whichever is greater. Renter Outreach Resource As described in detail below, the Renter Outreach Resource is a comprehensive program that includes direct reporting of rental disputes by renters to Federal agencies, with investigation and reporting requirements imposed on applicable Federal agencies, and (at a minimum) provision of applicable state agency contact information to renters to facilitate state-level investigation.  In addition, large institutional investors must respond to information requests in connection with any investigation and are required to regularly provide certain information regarding the Renter Outreach Resource to their renters. Establishment of Renter Outreach Resource The Secretary of Housing and Urban Development (the “HUD Secretary”) is required, not later than 180 days after the date of enactment of the Housing Act, to establish the Renter Outreach Resource that consists of a toll-free telephone number and a public website designed to assist renters of residential properties owned by a large institutional investor in –  notifying Federal agencies about disputes relating to the rental of such properties, including disputes about potential violations of Federal law; sharing information about such disputes with other Federal agencies, including other Federal agencies that manage similar disputes; monitoring such disputes; and resolving such disputes, to the extent practicable.   Response to Outreach The HUD Secretary is required to establish reasonable procedures to promptly respond, in writing where appropriate, to a renter who provides information to the HUD Secretary about a dispute using the Renter Outreach Resource and document such responses.  Such responses are required to include, where appropriate, information about –  steps that have been taken by the HUD Secretary or another Federal agency in response to the information about the dispute provided by the renter, including determining the appropriate large institutional investor involved as described in the bullet below “Investigation of Potential Violations of Federal Law;” any responses received by the HUD Secretary or another Federal agency from the large institutional investor related to such dispute; and any outcome of the dispute, to the extent practicable.   Investigation of Potential Violations of Federal Law The HUD Secretary is required to promptly process and investigate any information relating to a dispute received through the Renter Outreach Resource about a potential violation of Federal law that is received from a renter of a residential property owned by a large institutional investor through the Renter Outreach Resource, including –  requesting information from a large institutional investor; determining the appropriate large institutional investor involved in the dispute; and sharing information about such potential violation of Federal law with any relevant Federal agencies, as the HUD Secretary may determine appropriate.   Upon request for information made pursuant to the Renter Outreach Resource, the HUD Secretary is required to provide a large institutional investor the opportunity to respond, including regarding whether such large institutional investor currently owns the property described in such request for information.   Information for Appropriate State Authority When the HUD Secretary receives information about a potential violation of State law or about a dispute received through the Renter Outreach Resource, from a renter of a residential property owned by a large institutional investor through the Renter Outreach Resource, the HUD Secretary is required, at a minimum, to provide the renter with contact information for the appropriate, State-specific, State authority authorized to process and investigate such information.   Notice About Renter Outreach Resource Each large institutional investor is required to –  provide to each renter of a residential property owned by such investor at the time such renter first occupies such home and annually thereafter –  written notice about the Renter Outreach Resource; and the name, phone number, and email address of the person or entity responsible for receiving and addressing renter disputes for the large institutional investor, and update the name, phone number, and email address within 30 days if such information changes prior to the subsequent time at which such notice is required to be provided; and   prominently feature information about the Renter Outreach Resource on a public website of such investor that is accessible by such renter.   Annual Notification Not later than 180 days after the date of enactment of the Housing Act, and not later than December 31st of each year thereafter, each person or entity that satisfies the definition of a large institutional investor is required to –  notify the HUD Secretary each year whether such owner is a large institutional investor; and in such notification, identify how many single-family homes such large institutional investor has direct or indirect investment control of as of the date of the submission of such notice, and the city and State where each such single-family home is located, unless such large institutional investor owns ten or fewer single-family homes in such city. Studies on Large Institutional Investors Not later than two years after the Effective Date, and again not later than ten years after the Effective Date, a GAO report and a HUD report are required to be submitted to the House Banking Committee and the Senate Committee on Financial Services. *     *     * Contacts Tax Cameron N. Cosby Carson Durdel Connie Lee Ameek Ashok Ponda Sarah D. Wellings Private Funds William C. Hanson Real Estate Karen J. Kepler Louis A. Monti John M. Steiner Appendix A Defined Terms in Section 1001 of the Housing Act Consumer Reporting Agency:  The term “consumer reporting agency” has the meaning given the term in section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a)). Excepted Purchase:  The term “excepted purchase” means any purchase of a single-family home that is –  Newly Constructed, For Sale Home Newly constructed, renovated, or a rental conversion for sale by a large institutional investor and not as a residence rented pending sale;   Build-to-Rent Program Pursuant to a build-to-rent program where the large institutional investor purchases newly constructed single-family homes to be managed as rental properties, whether as communities exclusively of renter-occupied single-family homes or as communities of single-family homes that are both owner- and renter-occupied;   Renovate-to-Rent Program Pursuant to a renovate-to-rent program that –  substantially rehabilitates single-family homes that do not meet structural or core system elements of local building codes; and makes improvements in an aggregate dollar amount of not less than 15% of the purchase price of the single-family home;   Homeownership Program Pursuant to a homeownership program that –  requires rental payments and any other fees that are not greater than those collected by the large institutional investor on other similarly situated single-family homes not covered by the eligible homeownership program; is subject to a contract between the large institutional investor and renter that shall be considered a consumer credit transaction secured by a dwelling or real property; provides for positive reporting of rental payments to consumer reporting agencies for any renter, who shall be informed of and opts into such reporting; and requires contribution of meaningful financial support from the large institutional investor, including price concessions, for the purchase of the single-family home by the renter;   Program to Boost Homeownership Pursuant to a program to boost homeownership that –  provides for positive reporting of rental payments to consumer reporting agencies for any renter who is informed of and opts into such reporting; provides for the right of first refusal and a 30-day ‘‘first look’’ period; and may entail the meaningful financial support from the large institutional investor, including price concessions, for the purchase of a single-family home by the renter (whether it is the home the renter occupies or another home);   Repossession In connection with the satisfaction of debts previously contracted in good faith and where the large institutional investor has the right to repossess the single-family home under such contract;   Foreclosure Undertaken by a mortgage servicer, lender, or other entity that has a legal right to a single-family home, for the purpose of loss mitigation or compliance with servicing or investor obligations, and not as a long-term investment strategy, and is solely as a result of –  a foreclosure; a deed-in-lieu of foreclosure; enforcement of a mortgage, deed of trust, or other security interest; or operation of law following borrower default;   Purchase from Another Large Institutional Investor Purchased from another large institutional investor that either owned the single-family home on the date of enactment of the Housing Act or purchased the single-family home in compliance with Section 1001;   Purchase from Investor Not a Large Institutional Investor Purchased from an investor not covered under Section 1001, so long as the purchase occurred not more than two years after the Effective Date;   Newly Constructed Single-Family Home in Senior Community Newly constructed, renovated, or a rental conversion that is intended and operated for occupancy as part of a community for households with one or more members aged 55 years or older, and satisfies visitability standards established by the HUD Secretary; or   Combination of Foregoing Purchases Purchased through a single purchase or combination or series of purchases described in the foregoing bullet points.   Large Institutional Investor:  The term “large institutional investor” means an investment fund, corporation, general or limited partnership, limited liability company, joint venture, association, or other for-profit entity that is a legal entity structured in a manner that is not aforementioned that –  is engaged, in whole or in part, in the business of investing in, owning, renting, managing, or holding single-family homes; and alone or in concert with one or more other entities, beginning after the date of enactment of the Housing Act, directly or indirectly has investment control of not less than 350 single-family homes in the aggregate, not including any single-family home purchased in an excepted purchase made after the date of enactment of the Housing Act.   A large institutional investor does not include any local, State, Tribal, or Federal government entity or instrumentality thereof. For purposes of the definition of “large institutional investor”, an entity has direct or indirect investment control over a single-family home if the entity –  owns, or has primary authority or fiduciary responsibility to make material investment or management decisions relating to, the single-family home; is, or directly or indirectly controls, the general partner or managing member of the entity that owns the single-family home; is or controls the investment manager, management company, or investment advisor of the entity that owns the single-family home; owns or controls more than 25% of any class of equity interests of the entity that owns the single-family home, unless such entity is a passive investor; or otherwise controls the entity that owns the single-family home.   Purchase:  The term “purchase” includes any purchase, transfer, or other acquisition of a single-family home, including through mergers, acquisitions, construction, foreclosures, or bulk purchases, whether or not for cash consideration.   Single-Family Home:  The term “single-family home” means a structure that contains two or fewer dwelling units that are each intended for residential occupancy by a single household.  The term “single-family home” does not include a manufactured home, as defined in section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5402).