SF 3173

1st Engrossment - 94th Legislature (2025 - 2026)

Posted on 04/06/2026 01:45 p.m.

A bill for an act
relating to housing; prohibiting private equity company ownership of single-family
homes; providing attorney general enforcement; providing penalties; proposing
coding for new law in Minnesota Statutes, chapter 500.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [500.50] SINGLE-FAMILY HOMES; PRIVATE EQUITY OWNERSHIP
PROHIBITED.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Family entity" means an entity, however organized, that meets the following
standards:
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new text begin (1) all its members are natural persons related to each other within the third degree of
kindred according to the rules of civil law; and
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new text begin (2) its revenue from rent or any other means is paid directly from one member to another.
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new text begin (c) "Homestead" is a property classified as class 1a under section 273.13, subdivision
22.
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new text begin (d) "Private equity company" means an investor or group of investors who primarily
engage in the raising or returning of capital and who invest, develop, or dispose of specified
assets. Private equity company includes publicly or nonpublicly traded entities, real estate
investment trusts, and any investment firm that buys and manages private companies to
make a profit. A private equity company does not include the following:
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new text begin (1) a local, state, or federal unit of government or agency;
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new text begin (2) a land trust as defined in section 462A.31;
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new text begin (3) a nonprofit organized under chapter 317A that is creating, rehabilitating, or providing
affordable housing to low- and moderate-income renters or home buyers;
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new text begin (4) a corporation primarily engaged in housing development through the construction
or substantial rehabilitation of single-family homes;
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new text begin (5) a mortgage note holder that owns the single-family homes through foreclosure; or
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new text begin (6) a family entity.
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new text begin (e) "Real estate investment trust" has the meaning given in United States Code, title 26,
section 856.
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new text begin (f) "Single-family home" means a residential property consisting of one to four dwelling
units, but does not include:
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new text begin (1) an assisted living facility with fewer than five dwelling units licensed under chapter
144G; or
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new text begin (2) a residential property with fewer than five dwelling units that is controlled by a
provider licensed under chapters 245A and 245D and in which residential supports and
services as defined in section 245D.03, subdivision 1, paragraph (c), clause (3), or integrated
community support as defined in section 245D.03, subdivision 1, paragraph (c), clause (8),
are provided.
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new text begin (g) "Substantial rehabilitation" means the repair, reconstruction, or improvement of
existing single-family homes that:
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new text begin (1) increases the value of each single-family home by 20 percent or more; and
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new text begin (2) makes each single-family home:
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new text begin (i) compliant with the State Building Code; and
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new text begin (ii) safe, sanitary, and in compliance with the applicable health and safety laws of the
United States, of the state, and of the local units of government, including ordinances
regulating rental licensing.
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new text begin Subd. 2. new text end

new text begin Single-family homes; private equity ownership prohibition. new text end

new text begin A private equity
company is prohibited from having a direct or indirect ownership interest in a single-family
home. This subdivision does not prohibit a natural person from acquiring an ownership
interest in a home that is classified as homestead property for tax purposes.
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new text begin Subd. 3. new text end

new text begin Civil penalty; enforcement. new text end

new text begin A private equity company that violates this section
is subject to a civil penalty of $100,000 per violation. The attorney general may enforce
this section pursuant to section 8.31. The attorney general must provide written notice of
the alleged violation under this section to the private equity company at least 90 days before
filing an enforcement action. Notwithstanding any contrary provision in law, including but
not limited to section 16A.151, any civil penalty recovered under this subdivision must be
deposited into the workforce and affordable homeownership development account under
section 462A.38, subdivision 7.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2026, and applies to interests
in real property acquired on or after that date.
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