1
STATE OF MINNESOTA
IN SUPREME COURT
A20-1367

C o u r t o f A p p e a l s G i l d e a , C . J .
Concurring in Part, Dissenting in Part,
Thissen, J.
Linda Cobb Thompson, on behalf of
herself and all others similarly situated,

Appellant,

vs. Filed: August 24, 2022
O f f i c e o f A p p e l l a t e C o u r t s
St. Anthony Leased Housing
Associates II, LP, et al.,

Respondents.

________________________

Prentiss Cox, University of Minnesota Consumer Protection Clinic, Minneapolis,
Minnesota; and

John Cann, Margaret Kaplan, James Porade k, Housing Justice Center, Saint Paul,
Minnesota, for appellant.

Thomas H. Boyd, Peter G. Economou, Winthrop & Wein stine, P.A., Minneapolis,
Minnesota, for respondents.

________________________

S Y L L A B U S

1. Because the tenant alleges that the landlord breached their lease agreement
by charging rent in violation of the Mi nnesota Bond Allocation Act, Minn. Stat.
2
§ 474A.047 (2020), and that the landlord made mi sleading statements in violation of the
Uniform Deceptive Trade Prac tices Act, Minn. Stat. §§ 325D.43–.48 (2020), and the
Consumer Fraud Act, Minn. Stat. §§ 325F.68–.70 (2020), the tenant has standing to assert
her common-law and statutory claims even th ough she cannot mainta in a separate claim
for violation of the Bond Allocation Act.
2. Because the “area fair market re nt” limit in Minn. Stat. § 474A.047,
subd. 1(a)(2), means the fair market rent figures published annually by the U.S. Department
of Housing and Urban Development and the tenant alleged that the landlord charged more
than the applicable fair market rent in violation of their leas e, the district court erred in
dismissing the tenant’s complaint.
Reversed and remanded.
O P I N I O N
GILDEA, Chief Justice.
This action arises from the lease ag reement between appellant Linda Cobb
Thompson and respondents St. Anthony Le ased Housing Associates II, Limited
Partnership; St. Anthony Leased Housing Associates II, LLC; and Dominium Management
Services, LLC (collectively, Dominium). Thompson leases and lives in one of
Dominium’s rent-restricted housing units. She alleges that Dominium violated the
Minnesota Bond Allocation Act, Minn. Stat . §§ 474A.01–.21 (2020), which imposes rent
limits on residential rental projects financed with tax-exempt municipal bonds. The district
court dismissed Thompson’s complaint, concluding that she had not alleged a violation of
the Act. The court of appeals affirmed. Because we conclude that Thompson has alleged
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a violation of the Act sufficient to suppor t her common-law and statutory claims, we
reverse and remand.
FACTS
In 2015, Dominium constructed the Legends at Silver Lake Village, a senior-living
apartment complex in Saint Anthony.1 Thompson is a tenant of the Legends. Dominium
financed the Legends project in part with ta x-exempt municipal bonds issued by the City
of Saint Anthony. When a private devel oper receives municipal bond proceeds for a
housing project, as Dominium did here, the developer must comply with the Minnesota
Bond Allocation Act. See Minn. Stat. §§ 474A.01–.21. The Act restricts the maximum
rent that a developer may charge for at leas t 20 percent of the project’s housing units.
Minn. Stat. § 474A.047, subd. 1(a)(2). Specif ically, rent in those units may not exceed
“the area fair market rent or exception fair market rents for existing housing, if applicable,
as established by the federal Department of Housing and Urban Development [(HUD)].”
Id.
Dominium entered into an agreement with the City, promising to abide by the rent
restrictions in Minn. Stat. § 474A.047 for 15 years, as required by the Bond Allocation Act.
See Minn. Stat. § 474A.047, subd. 2. Dominium’s lease agreement with tenants in the rent-
restricted units, including Thompson, contai ned a provision that a ddressed future rent

1 Thompson’s complaint names as defendants St. Anthony Leased Housing
Associates II, Limited Partnership; St. Antho ny Leased Housing Associates II, LLC; and
Dominium Management Services, LLC. Thes e companies are closel y related business
entities that constructed, own, and manage the Legends.
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increases, stating that any “rent increase will be made in accordance with all applicable
state and local laws.”
Thompson sued Dominium on behalf of a putative class of tenants for breach of
contract, violations of the Uniform Dece ptive Trade Practices Act, Minn. Stat.
§§ 325D.43–.48 (2020), and the Consumer Fraud Act, Minn. Stat. §§ 325F.68–.70 (2020),
and unjust enrichment. Thompson asserted that Dominium’s rent exceeded the fair market
rent figures that HUD sets and therefore violated Minn. Stat. § 474A.047. Because the rent
allegedly violates the statute, Thompson claimed a breach of lease by Dominium. As
alleged in the complaint, Dominium overch arged Thompson by a total of $4,120 for the
period from June 2015 through January 2020. 2 She also alleged that Dominium made
misleading statements regarding the rent increases in violation of the Uniform Deceptive
Trade Practices Act and the Consumer Fraud Act.
Dominium moved to dismiss the compla int under Minnesota Rule of Civil
Procedure 12.02(e) for failure to state a claim upon which relief can be granted. Dominium
argued that Thompson does not have standing to enforce Minn. Stat. § 474A.047 and, even
if she did, the rent that Dominium charge d did not violate the Bond Allocation Act.
Dominium claimed that the rent did not exc eed the payment standard amount set by the

2 As an example, Thompson alleged that Dominium charged her $1,190 per month in
gross rent in 2018. The fair market rent figure set by HUD for fiscal year 2018 for the
Minneapolis-St. Paul-Bloomi ngton, MN-WI metropolitan area —the area that includes
Saint Anthony—was $1,089 for a two-bedroom unit, an overc harge of $101 per month.
The FY 2018 Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area FMRs
for All Bedroom Sizes , HUD User, https://www.huduser.gov/portal/datasets/fmr/fmrs/
FY2018_code/2018summary.odn?&year=2018&fmrtype=Final&selection_type=
county&fips=2712399999 (last visited July 11, 2022) [opinion attachment].
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local public housing agency—here, the Metropolitan Council’s Housing and
Redevelopment Authority (Metro HRA)—which Dominium contended is the applicable
rent limit under section 474A.047.
The district court granted Dominium’s motion to dismiss. The court first concluded
that Thompson has standing to pursue her cl aims against Dominium based on the lease
agreements in which Dominium promised to abide by applicable state and local laws
related to rent increases. On the merits, ho wever, the court concluded that, as a matter of
law, Dominium did not violate the rent restri ctions in Minn. Stat. § 474A.047. The court
agreed with Dominium that the payment standard amounts set by local housing agencies
meet the requirements of section 474A.047. Because Thompson did not allege that her
rent exceeded the payment standard amount set by Metro HRA, the local housing agency
here, and all her claims were premised on an alleged violation of section 474A.047, the
court dismissed the complaint in its entirety.
Thompson appealed, and the co urt of appeals affirmed. Thompson v. St. Anthony
Leased Hous. Assocs. II, LP, 961 N.W.2d 787, 789 (Minn. App. 2021). The court held that
“area fair market rent” in Minn. Stat. § 474A.047 means the payment standard amounts set
by local agencies. Id. at 794. Ultimately, the court held that because Thompson does not
allege that Dominium charged more than Metro HRA’s payment standard amount,
Dominium did not violate the rent restrictions in section 474A.047. Id. at 795.
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We granted Thompson’s petition for furthe r review that challenged the court of
appeals’s interpretation of “area fair market rent.”3
ANALYSIS
This case comes to us on review of the district court’s grant of Dominium’s motion
to dismiss for failure to state a claim. A pa rty fails to state a claim under Rule 12.02(e)
when the complaint does not “set[] forth a legally sufficient claim for relief.” Graphic
Commc’ns Loc. 1B Health & Welfare Fund “A” v. CVS Caremark Corp., 850 N.W.2d 682,
692 (Minn. 2014). We accept the facts stated in the complaint “as true and constru[e] all
reasonable inferences in favor of the nonmoving party.” Id. We review a district court’s
dismissal for failure to state a claim de novo. Id.

3 The court of appeals also held that “e xception fair market re nts” in Minn. Stat.
§ 474A.047 means the exception payment standard amounts a bove 110 percent of fair
market rent that are approved by HUD. Thompson, 961 N.W.2d at 793. Neither party
challenged the court of appeals’ s interpretation of “exception fa ir market rents,” so that
issue is not before us here. And Thompson did not allege that an exception rent applied to
the Legends or that Dominium’s rent charges exceeded any applicable exception rent limit.
The dissent considers the definition of “exception fair market r e n t s ” t o b e “ a
fundamental part of the Section 47’s definiti on of maximum rent.” But an exception fair
market rent is only part of the rent limit “if applicable.” Minn. Stat. § 474A.047,
subd. 1(a)(2). Neither party in this case ar gues that an exception fa ir market rent is
“applicable” to the Legends. Though the di ssent contends that our decision takes a
“piecemeal approach” that “provides Minnesota lawyer s and litigants incomplete
guidance,” we only “decide actual controversies.” In re Guardianship of Tschumy ,
853 N.W.2d 728, 735 (Minn. 2014). We do not issue opin ions “merely to establish
precedent.” Schowalter v. State , 822 N.W.2d 292, 298 (Minn. 2012) (quoting In re
Schmidt, 443 N.W.2d 824, 82 6 (Minn. 1989)). If we interp reted “exception fair market
rents” here, that analysis w ould largely be dicta. If Mi nnesota lawyers and litigants are
faced with incomplete guidance on the meaning of “exception fair market rents” in Minn.
Stat. § 474A.047, subd. 1(a)(2), it is up to the Legislature to provide that guidance, absent
a dispute presented to us that requires resolution of that issue.
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At issue is the meaning of “area fair ma rket rent” in Minn. Stat. § 474A.047,
subd. 1(a)(2). Thompson argues that Dominium’s rent exceeded the rent restrictions in the
statute because the rent exceeded the fair ma rket rent figures that HUD sets. Dominium
contends that the rent complied with the statute because the rent did not exceed the payment
standard amount that the local public housing agency set. Before turning to the merits of
the district court’s dismissal, we first consider whether Thompson has standing.
I.
We review issues of standing de novo. Webb Golden Valley, LLC v. State ,
865 N.W.2d 689, 693 (Minn. 2015). A person has standing if they are “the beneficiary of
a legislative enactment granting standing” or if they have “suffered an injury-in-fact.” Id.
A party has suffered an injury-in-fact when th ere has been “a concrete and particularized
invasion of a legally protected interest.” Id. (quoting Lorix v. Crompton Corp. ,
736 N.W.2d 619, 624 (Minn. 2007)). The di strict court conclude d that Thompson had
standing, but the court of appeals did not discuss the issue. We decide the standing question
because “[s]tanding is a jurisdictional issue.” Id.
Thompson’s claims against Dominium—breach of contract, violation of consumer
protection statutes, and unjust enrichment—are founded on the allegation that Dominium
charged more than the maximum rent allowed under Minn. Stat. § 474A.047. Dominium
argues that the statute governs the relationship between a party that receives bond proceeds
(here, Dominium) and a bond issuer (the City of Saint Anthony in this case) and does not
grant enforcement authority to affected tenants. Ther efore, Dominium contends,
Thompson has no legally protected inte rest in Dominium’s compliance with
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section 474A.047. The district court concluded that Dominium’s lease with its tenants—
specifically the provision that rent increase s “will be made in accordance with all
applicable state and local laws ”—gave Thompson standing to enforce the rent restriction
in the statute.
Dominium emphasizes that the Bond A llocation Act does not provide a private
cause of action to enforce the rent restric tions and that bond issuers have the sole
enforcement authority. We agree. In add ition to imposing rent restrictions, Minn. Stat.
§ 474A.047 requires parties that receive bond proceeds to “enter into a 15-year agreement
with the issuer” promising that their rent rates and the income levels of the project’s tenants
will be within section 474A.047 limits. Minn. Stat. § 474A.047, subd. 2. If a bond issuer
determines that a project is not in compliance with the statute, the owners of the project
must pay a penalty to the issuer, though an issuer can decide to “waive insubstantial
violations.” Id., subd. 3. Because there is no indi cation that the Legislature intended for
tenants to be able to sue their landlords fo r section 474A.047 viol ations but is instead
focused on developers and issu ers, we agree with Dominium that this statute is not “a
legislative enactment granting standing.” See Webb Golden Valley, LLC, 865 N.W.2d at
693.
But Thompson is not arguing that Minn. St at. § 474A.047 gives her the right to
enforce the statute’s rent rest riction. Thompson’s claim th at she was charged excessive
rent is based on Dominium’s lease agreement, which promised that rent increases would
be made in compliance with state and local laws. It is the violation of the lease agreement,
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Thompson claims, that caused her an injury-i n-fact and gives her standing to sue for
Dominium’s alleged section 474A.047 violations as a breach of their contract.
Dominium responds that Thompson does not have an injury-in-fact because
Dominium charged rents that complied with Minn. Stat. § 474A.047. But Dominium
conflates Thompson’s standing with the merits of her claims. The inquiry at this stage is
whether Thompson has suffered an injury if Dominium’s rent exceeded the statute’s limits.
Because Thompson has alleged su ch an injury, she has standi ng to pursue her claim that
Dominium violated the lease. Specifically, Thompson alleges that she paid more rent than
Dominium was allowed to charge under sec tion 474A.047 and her lease. This claimed
economic loss suffices as an injury-in-fact.4 Cf. Enright v. Lehmann, 735 N.W.2d 326, 330
(Minn. 2007) (holding that garnishment of a debtor’s joint bank account was an injury-in-
fact even though the garnished funds were not deposited by the plaintiff but from the other
person on the joint account).

4 Dominium suggests that allowing Thompson to enforce section 474A.047
violations conflicts with the statutory reme dy—that is, the penalty owed to issuers. See
Minn. Stat. § 474A.047, subd. 3. But the statutory remedy governs only the agreement
between the developer and the bond issuer. Th e statutory remedy does not purport to be
the exclusive remedy for other parties that have contracted with the developer. Dominium
also points out that the City has not found that Dominium’s rent charges violated the rent
restrictions in section 474A.047. But the City’s failure to assess a penalty against
Dominium for noncompliance with section 474A.047 does not govern whether Dominium
violated the lease by charging rent that exceeded the statutory limit or whether Thompson
may bring a claim against Dominium.
10
Additionally, Thompson alleges a clai m under the Uniform Deceptive Trade
Practices Act and the Consumer Fraud Act.5 We have held that violations of statutes that
do not themselves create private causes of action may be the subject of a Consumer Fraud
Act claim. See Graphic Commc’ns, 850 N.W.2d at 693–94. In Graphic Communications,
a group of health benefit funds alleged th at pharmacies overcharged them for generic
prescription drug purchases. Id. at 687. The funds asserted that the pharmacies violated
the Consumer Fraud Act and the Pharmacy Practice Act, Minn. Stat. §§ 151.01–.40 (2020),
which requires pharmacists to dispense gene ric rather than bra nd-name drugs unless
specified and then pass the cost savings to the purchasers of the generic drugs. Graphic
Commc’ns, 850 N.W.2d at 687–88. We held that the Pharmacy Practice Act did not create
a private cause of action, so the health funds could not sue the pharmacies under that statute.
Id. at 691–92. But we held that the funds were not barred from bringing a Consumer Fraud
Act claim based on the underlying conduct that violated the Pharmacy Practice Act. Id. at
694.

5 Consumers may recover for violations of both the Consumer Fraud Act and the
Uniform Deceptive Trade Practices Act. See Minn. Stat. §§ 8.31, subds. 1, 3a, 325D.45.
Here, Thompson alleges that Dominium’s rent increase letters were misleading to tenants
because they misstated the applicable standard for calculating rent amounts and led tenants
to believe that the rent increases complied with the law. Dominium raised the rent for the
rent-restricted units at least three times dur ing Thompson’s tenancy, in 2016, 2018, and
2019. Tenants received a letter regarding the 2016 and 2018 increases, which stated that
“the Fair Market Rent for Ramsey County has increased,” and therefore the tenant was
subject to a corresponding rent increase up to “the maximum allowable rent.” The 2019
letter stated that a rent increase was “based on the area median gross income (AMGI)
published by the Federal Depa rtment of Housing and Urba n Development for [their]
geographical area.”
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Like the Pharmacy Practice Act in Graphic Communications , Minn. Stat.
§ 474A.047 does not create a private cause of action. But that does not preclude Thompson
from asserting that Dominium’s rent charges (as alleged violations of section 474A.047)
violate other statutory provisions or her lease agreement with Dominium.
In sum, Thompson has sta nding based on Dominium’s lease agreement in which
Dominium agreed to charge rent in accordance with limits prescribed by law.
II.
Turning to the merits of whether Thompson’s complaint adequately states a claim,
Thompson alleges that Dominium’s rent exceed ed the rent restrictions in Minn. Stat.
§ 474A.047. As relevant here, parties that receive municipal bond pr oceeds to construct
housing are required to offer at least 20 percent of their units at a rental rate that does “not
exceed the area fair market rent . . . as esta blished by the federal Department of Housing
and Urban Development [(HUD)].” Mi nn. Stat. § 474A.047, subd. 1(a)(2). The parties
dispute the meaning of “area fair market rent . . . as established by [HUD].” Thompson
contends that “area fair market rent” means the fair market rent figures that HUD publishes
on an annual basis for use in a variety of affordable housing programs. Dominium counters
that “area fair market rent” refers to payment standard amounts that local housing agencies
set for use in the Housing Choice Voucher program.
This dispute presents an issue “of statutory interpretation that we review de novo.”
Moore v. Robinson Env’t , 954 N.W.2d 277, 280 (Minn. 2021). We start by determining
whether the statutory language is ambiguous, that is, “subject to more than one reasonable
interpretation.” Id. at 281. We construe technical wo rds and phrases according to their
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“special meaning” and other words and phrases “according to their common and approved
usage.” Minn. Stat. § 645.08(1) (2020). For a statute that is “plain and unambiguous,” our
inquiry ends there. Moore, 954 N.W.2d at 281.
To resolve whether Dominium’s rent violat es the rent restrictions in Minn. Stat.
§ 474A.047, we must interpret the term “area fair market rent” in Minn. Stat. § 474A.047,
subd. 1(a)(2). The Bond Allocation Act does not define “area fair market rent.” But
Thompson contends that “area fair market rent” is a technical term that means the fair
market rent figures that HUD sets every year for various regions throughout the country.
The context in which the phrase “area fair market rent” is used is important in
determining whether the phrase has a technical meaning. See State v. Rick , 835 N.W.2d
478, 484 (Minn. 2013), abrogated on other grounds by State v. Thonesavanh, 904 N.W.2d
432, 440–41 (Minn. 2017). Th e context here makes clear that the Legislature tied “area
fair market rent” to rent figures that HUD esta blishes—the statute is explicit that this is a
rental rate “established by the federal Depa rtment of Housing and Urban Development.”
Minn. Stat. § 474A.047, subd. 1(a)(2). In addition, the Legislature twice references federal
assistance programs in section 474A.047.6 See id. (“The rental rates of units in a residential

6 The dissent interprets the statute’s referenc e to project-based assistance to mean that
“the Legislature understood that rental rates that satisfied federal regulations for project-
based assistance payment to tenants qualify as falling within ‘area fair market rent or
exception fair market rents.’ ” The statute, however, provides that “[t]he rental rates of
units in a residential rental project for which project-based federal assistance payments are
made are deemed to be within the rent limitations of this clause.” Minn. Stat. § 474A.047,
subd. 1(a)(2). If, as the dissent argues, rents that satisfy federal project-based assistance
programs satisfy the limit in Minn. Stat. § 474A.047, subd. 1(a)(2), the Legislature would
not have needed to “deem” that those rents satisfy the limit. To hold that rents that comply

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rental project for which project-based federal assistance payments are made are deemed to
be within the rent limitati ons of this clause.”); id., subd. 1(b) (“The proceeds from
residential rental bonds may be used for a project for which project-based federal rental
assistance payments are made only if [certain requirements are met].”). Given that the
Legislature linked the rent restriction at i ssue to the rent figures that HUD sets and
specifically mentioned federal assistance program s in the statute, we conclude that the
Legislature intended to rely on the special meaning given to the term in federal housing
assistance law. See In re Restorff, 932 N.W.2d 12, 20 (Minn. 2019) (noting that we can
“look to an outside statute or rule . . . when a word is a technical term with a special
meaning”).
There is no question that the term “fair market rent” has well-defined special
meaning in federal housing assistance law. 7 Specifically, federal regulations explain that
HUD annually sets and publishes the “fair ma rket rent” for each metropolitan area and
nonmetropolitan county in the United States. 24 C.F.R. §§ 888.113, .115(a) (2021).8

with federal project-based assistance programs always satisfy the limit in section 474A.047
without regard to the language that deems the limit satisfied would render that language
superfluous, a conclusion that we are unable to adopt. See Pfoser v. Harpstead ,
953 N.W.2d 507, 518 (Minn. 20 21) (refusing to adopt an interpretation of a statute that
would render one standard in the statute “meaningless”). Regardless, neither party alleges
that Dominium received project-based assistance payments for the units at issue, and so we
do not further construe this clause here.

7 Ninety-nine sections of Title 24 of the Code of Federal Regulations (which relates
to Housing and Urban Development) include the term “fair market rent” or “FMR.”

8 HUD regulations define “fair market re nt” as “the rent, including the cost of
utilities . . . , as established by HUD, . . . for units of varying sizes (by number of

14
The modifier “area” in the full phrase “are a fair market rent” in Minn. Stat.
§ 474A.047 is necessarily part of the technical meaning. HUD sets fair market rent figures
for each designated metropolitan area and thos e counties not included in a metropolitan
area. Federal law directs the HUD Secretary to publish these “[f]air market rentals for an
area . . . not less than annually” on HUD’s website “and in any other manner specified by
the Secretary.” 42 U.S.C. § 1437f(c)(1)(B) (emphasis added); see also, e.g. , 24 C.F.R.
§ 888.113(d) (“FMR areas comprise metropolitan areas and nonmetropolitan
counties . . . .” (emphasis added)); 24 C.F.R. § 888.111(b) (2021) (“Fair market rent means
the rent, . . . as established by HUD, . . . that must be paid in the market area [for rental
housing].” (emphasis added)).
HUD’s fair market rent figures are used to determine benefits in several housing
programs, including Housin g Choice Voucher, Moderate Rehabilitation Single Room
Occupancy, HOME Investment Partnerships, Emergency Solutions Grants, Continuum of
Care, and Public Housing. 9 See Fair Market Rents for the Housing Choice Voucher

bedrooms), that must be paid in the market ar ea to rent privately owned, existing, decent,
safe and sanitary rental hous ing of modest (non-luxury) natu re with suitable amenities.”
24 C.F.R. § 888.111(b) (2021). The fair market rent figures represent the 40th-percentile
rent for standard quality rental housing in an area. 24 C.F.R. § 888.113(a) (2021).

9 For example, the maximum rent amo unt provided by the HOME Investment
Partnerships program is the applicable fair market rent figure set by HUD or an amount
based on a family’s income, whichever is le ss. 24 C.F.R. § 92.252(a) (2021). In the
Emergency Solutions Grants program, the maxi mum rent provided is the applicable fair
market rent figure set by HUD, if the re nt also meets “HUD’s standard of rent
reasonableness.” 24 C.F.R. § 576.106(d)(1) (202 1). In 2001 when the “area fair market
rent” and “exception fair market rents” provisions were added to Minn. Stat. § 474A.047,
subd. 1(a)(2), the program limited certain leas e payments paid to an organization for

15
Program, Moderate Rehabilitation Single Room Occupancy Program, and Other Programs
Fiscal Year 2022, 86 Fed. Reg. 43,260, 43,261 (Aug. 6, 2021 ). Based on its widespread
use in these federal programs, we conclude that the phrase “area fair market rent” has
acquired a specialized meaning. The Legisl ature’s use of this phrase in Minn. Stat.
§ 474A.047 and the connection that the st atute makes between the phrase and HUD
convinces us that the Legislature intended for that specialized meaning to apply to
section 474A.047, and thus “area fair ma rket rent” in Minn. Stat. § 474A.047,
subd. 1(a)(2), means the fair market rent figures set by HUD.10
Dominium would have us conclude that “area fair market rent . . . as established by
[HUD]” does not have the technical meaning of the “fair market rent figures set by HUD”
but instead refers to a payment sta ndard amount set by a local agency. 11 But that is an

rehabilitation or conversion of a property to the fair market rent that applied before the
rehabilitation or conversion, even though the program did not pr ovide rental assistance at
the time. 24 C.F.R. § 576.23(b)(4) (2001).

10 Dominium argues that HUD’s fair market rents are simply estimates and not “final,
exact” rent values. But HUD’s fair market re nts are exact dollar amounts. For example,
the fair market rent for the Minneapolis-St. Paul-Bloomington metropolitan area in fiscal
year 2022 is $1,078 for a one-bedroom unit. The FY 2022 Minneapolis-St. Paul-
Bloomington, MN-WI HUD Metro FMR Ar ea FMRs for All Bedroom Sizes , HUD User,
https://www.huduser.gov/portal/datasets/fmr/fmrs/FY2022_code/2022summary.odn?
Cbsasub=METRO33460M33460&year=2022&fmrtype=Final (last visited July 11, 2022)
[opinion attachment].

11 A payment standard amount is genera lly the maximum rent allowed under the
Housing Choice Voucher program for a particular area. 24 C.F.R. § 982.505(b) (2021);
see also 24 C.F.R. § 982.4 (2021) (defining “p ayment standard” as “[t]he maximum
monthly assistance payment for a family assisted in the voucher program (before deducting
the total tenant payment by the family)”). Payment standard amounts between 90 and
110 percent of HUD’s fair market rent fall within the “basic range” and can be set by a

16
unreasonable reading of the statute. HUD has explained that “Fair Market Rents (FMRs)
are used to determine payment standard amounts for the Housing Choice Voucher
program” and other purposes. Off. of Pol’y Dev. & Rsch., U.S. Dep’t of Hous. & Urb.
Dev., Fair Market Rents (4 0th Percentile Rents) , HUD User, https://www.huduser.gov/
portal/datasets/fmr.html (last visited July 11 , 2022) [opinion attachment]. A payment
standard is based on fair market rent. A payment standard is not itself fair market rent.12

local agency without HUD approval. 24 C.F. R. § 982.503(b)(1)(i) (2021). If a local
agency wants to set a payment standard lower than 90 percent or higher than 110 percent
of HUD’s fair market rent, it must get HUD a pproval. 24 C.F.R. § 982.503(b)(2) (2021).
Under Housing Choice Vouche r regulations, a HUD-approved payment standard outside
the basic range is called an “excep tion payment standard amount.” Id. The “payment
standard” language was included in the HUD regulations at the time that Minn. Stat.
§ 474A.047 was amended in 2001. See 24 C.F.R. § 982.503(b)(1)(i) (2000). Dominium
asks us to overlay this frame work of payment standards in the basic range and exception
payment standards onto section 474A.047 by asserting that the rent restrictions in
section 474A.047 “reflect the Legislature’s in tent to incorporate a nd correspond with the
HUD payment standards.”

12 In an effort to conn ect Minn. Stat. § 474A.047—which was amended in 2001—and
the Housing Choice Voucher program, Dominium points us to HUD regulations in effect
in 1999. Under those regula tions, HUD was to publish fa ir market rents and could
“approve an area exception rent” that was higher than the fair market rent to allow a greater
subsidy for part of an area. 24 C.F.R. § 982.504(b) (1999). The two figures—HUD’s fair
market rent and HUD-approved rents higher than fair market rent—were referred to as the
“FMR/exception rent limit” and represente d the “fair market rent published by HUD
Headquarters, or any exception rent.” 24 C.F.R. § 982.4(b) (1999). Dominium argues that
these regulations are instructive in interpreting section 474A.047 because neither “area fair
market rent” nor “exception fair market rents” is defined in section 474A.047 and both
terms “can be readily and appropriately determined by” looking to the regulations.
But Minn. Stat. § 474A.047 does not re ference the Housing Choice Voucher
regulations. Thompson does not allege that she is a participant in the voucher program,
and Dominium does no t identify any specific link between the Bond Allocation Act and
the Housing Choice Voucher program that would make it logical to interpret
section 474A.047 consistently with the voucher regulations when the fair market rent
figures set by HUD have broader applicability beyond that single program. And even more

17
In addition, “area fair market rent” must be “established by the federal Department
of Housing and Urban Development.” Minn. Stat. § 474A.047, subd. 1(a)(2). Thompson
argues that a payment standard amount set by a local agency is not “established by” HUD
because HUD takes no specific action when a local agency sets a payment standard.
Though HUD has delegated authority to local agencies to set a paym ent standard within
90 to 110 percent of fair market rent (the “basic range”), Thompson contends that
section 474A.047 allows only one entity to es tablish area fair market rent, and that entity
is HUD. Dominium counters that HUD indire ctly establishes payment standard amounts
when it sets fair market rent figures, which define the range within which local agencies
are limited in setting the payment standard. We agree with Thompson.
HUD “establishes” the fair market rent figures for each area because HUD itself
sets them. Federal regulations explicitly define “fair market rent” as “[t]he rent . . . as

problematic for Dominium’s argument, HUD regu lations in effect in 2001 when the rent
restrictions in section 474A.047 were amended did not reference the “FMR/exception rent
limit” but instead used the current “payment standard” language. See 24 C.F.R. § 982.4
(2000) (omitting definitions for “exception rent” and “FMR/exception rent limit”);
24 C.F.R. § 982.504 (2000) (omitting references to “exception rent” and “FMR/exception
rent limit” in the Housing Choice Voucher program regulation).
The dissent points to the “close text ual family resemblance” between the
FMR/exception rent limit and the basic and exception payment standard schemes to assert
that the FMR concept is equivalent to the payment standard basic range and the exception
rent is equivalent to the exception payment st andard. The dissent claims “that the phrase
‘exception fair market rent’ has a historical pedigree in federal law.” Then, the dissent
interprets “area fair market rent” in Minn . Stat. § 474A.047, subd. 1(a)(2), to mean
payment standard amount in the basic range. But the FMR/exception rent limit scheme
was not the law when the “area fair market rent” and “exception fair market rents”
provision was added to section 474A.047. And federal law used the term “exception rent,”
not “exception fair market rent.” See 24 C.F.R. § 982.4 (1999) (amended in 2000 to
remove references to “exception rent”).
18
established by HUD .” 24 C.F.R. § 982.4(b) (2021) (emphasis added). Thus, the
requirement in Minn. Stat. § 474A.047 that an “area fair market rent” be “established by”
HUD directly refers to the fair market rent figures set by HUD.
In contrast, HUD’s only role in setti ng the payment standard under the Housing
Choice Voucher program is setting the fair ma rket rent for each area, which the local
agency then uses as the base line figure in setting the paymen t standard within the basic
range of 90 to 110 percent of fair market rent. HUD has approved the use of payment
standards in the basic range, see 24 C.F.R. § 982.503(b)(1)(i) (2021), but HUD does not
select the precise payment st andard for an area. Accord ing to HUD regulations, local
agencies—not HUD—establish payment standards. See id. (“The [local agency] may
establish the payment standard amount for a unit size at any level between 90 percent and
110 percent of the published FMR for that un it size. HUD approval is not required to
establish a payment standard amount in that ra nge (‘basic range’).” (emphases added)).
The court of appeals held that HUD “indirectly” establishes payment standards because it
delegated authority to local agencies to set payment standards. Thompson, 961 N.W.2d at
794. But Minn. Stat. § 474A.047 refere nces HUD alone and does not mention the
involvement of local housing agencies in setti ng the values that govern rent restrictions
under the Bond Allocation Act.13 The technical meaning of “area fair market rent,” coupled

13 In arguing that HUD “establishes” paymen t standards because it has established the
regulations that govern payment standards, the dissent overlooks the plain meaning of the
word “established.” Relevant dictionary defi nitions of “establish” include: “[t]o bring
about; generate or effect,” “[t]o cause to be recognized and accepted,” and “[t]o introduce
and put (a law, for example) into force.” The American Heritage Dictionary of the English

19
with the specific and exclusiv e reference to HUD in sec tion 474A.047, bolsters our
conclusion that Dominium’s in terpretation of the statute that a payment standard amount
set by a local agency is “area fair market rent” is not reasonable.14

Language 608 (5th ed. 2011). HUD itself brings about, generates, and effects the fair
market rent values and publishes these figur es online. But HUD does not “bring about,”
“generate,” or “effect” the pa yment standard amounts. The dissent concludes that
“established by HUD” does not mean “esta blished by HUD” because “HUD does not
determine and publish ‘exception fair market re nts’ in the same way as it establishes and
publishes ‘fair market rents’ for an area.” Th ough not at issue in this case, assuming that
“exception fair market rents” includes exception payment standard amounts, we
acknowledge that HUD does not establish exception payment standard amounts in the same
way that it establishes fair market rents. But importantly, exception payment standard
amounts are still established by HUD. While HUD does not select the exception payment
standard amount, it must approve the amount. 24 C.F.R. § 982.503(b)(2). An exception
payment standard is not in effect unless HUD takes action to approve it. In this way, HUD
brings the exception payment standard into existence, i.e., establishes it.

14 Both the district court and the court of appeals adopted Dominium’s interpretation
based upon a perceived “gap” in the statute under the interpre tation that we adopt. The
district court concluded that interpreting “area fair market rent” in Minn. Stat. § 474A.047
to mean the fair market rent figures set by HUD would create a “Minnesota exception” to
the rental amounts that a landlord could charge . According to the di strict court, a “gap”
would result because a project ow ner could charge either (1) the fair market rent set by
HUD for the area, or (2) an amount greater than 110 percent of fair market rent if it is
approved by HUD as an exception, but th e owner could not charge between 100 and
110 percent of fair market rent. The district court determined that “the Legislature did not
intend to create this absurd re sult.” The court of appeals si milarly found that this “gap”
made Thompson’s interpretation of section 474A.047 less reasonable. See Thompson ,
961 N.W.2d at 793.
The dissent claims that our interpreta tion “presumes that, in Section 47, the
Legislature intended to create gaps in the rent amounts allowed” and that “[i]t really makes
no sense for the Legislature to adopt such a regime.” The dissent also notes that the district
court judge in this case is a former legislator who worked on finance issues.
This “gap,” whether intentionally or unintentionally created by the Legislature,
neither makes Thompson’s interpretation un reasonable nor Domini um’s interpretation
reasonable. See Rohmiller v. Hart, 811 N.W.2d 585, 590 (Minn. 2012) (“We cannot add
words or meaning to a statute that were intentionally or inadvertently omitted.”). We do
not ignore the plain meaning of a statute “under the pretext of pursuing the spirit.” Minn.

20
In sum, we hold that “area fair mark et rent” in Minn. Stat. § 474A.047,
subd. 1(a)(2), means the fair market rent figures set by HUD.15 There is no dispute in this
case that if we interpret section 474A.047 to mean the rent that HUD sets under 24 C.F.R.
§ 888.113, then Thompson has stated a viable cause of action. This is so because she
alleges that Dominium’s rent exceeds the HUD-established rents. Because Thompson
alleged that Dominium charged rent that exceeded the fair market rent figures set by HUD,
and because for purposes of our review we accept her allegations as true, her complaint is
sufficient to allege a violation of the statute a nd breach of lease. Therefore, we conclude

Stat. § 645.16 (2020). And we have held “that a lone legislator is not competent to testify
about the intent of a statute, ev en if she or he authored it.” In re Welfare of D.L. ,
486 N.W.2d 375, 381 (Minn. 1992).
We acknowledge that if “exception fair ma rket rents” means exception payment
standard amounts approved by HUD—a question that is not before us here—landlords may
not charge more than fair market rent unless a higher amount has been specifically
approved by HUD as an exception payment standard, even if a local agency has approved
a payment standard amount up to 110 percent of fair market rent. Ultimately, if the
payment standard amount is greater than fair market rent, the gap arises because a landlord
subject to Minn. Stat. § 474A.047 is not allowe d to charge an amount that is allowed for
landlords participating in the Housing Choice Voucher program. But there is no indication
that the Legislature intended the rent standard in section 474A.047 to be identical to the
Housing Choice Voucher standard. Accord ingly, the gap caused by interpreting
section 474A.047 in light of the Housing C hoice Voucher standards does not change our
interpretation of “area fair market rent.” Moreover, the gap argument presumes that a local
agency is precluded from getting HUD’s approval to set an amount that is within its
authority, which may not be true.

15 Dominium also argues that the payment standard amounts set by local agencies
should be included in the rent restriction in section 474A.047 “in order to make affordable
housing projects—like Legends—economically vi able.” But because the statute is not
ambiguous, we need not addr ess this policy argument. See City of Brainerd v. Brainerd
Invs. P’ship, 827 N.W.2d 752, 758 (Minn. 2013) (s tating that “policy arguments do not
provide a basis for us to ignore the application of the plain language” of a statute). This
argument is more properly directed to the Legislature, which sets the statutory rent
restrictions.
21
that Thompson has stated a claim upon which relief can be granted and hold that the district
court erred when the court dismissed her complaint.
CONCLUSION
For the foregoing reasons, we reverse the decision of the court of appeals and
remand to the district court for proceedings consistent with this opinion.
Reversed and remanded.

C/D-1
C O N C U R R E N C E & D I S S E N T
THISSEN, J. (concurring in part and dissenting in part).
Appellant Linda Cobb Thompson rents a un it in The Legends at Silver Lake in
St. Anthony (the Legends). The Legends is owned by respondent St. Anthony Leased
Housing Associates II, Limite d Partnership; respondent St. Anthony Leased Housing
Associates II, LLC, is the general partner of the limited partnership; and the Legends is
managed and operated by the owner’s authorized agent, Dominium Management Services
(collectively, the Owner).
The central dispute is whether the Ow ner charged Thompson more than the
“maximum rent” allowed under Minn. Stat. § 474A.047 (2020) (hereinafter Section 47). I
concur with the court’s conclusion that Thompson has standing to raise the question. But
contrary to the court’s decision, I conclude that the maximum rent that can be charged
under Section 47 is either (1) the “area fair market rent,” which is a rent amount set by the
local public housing agency that is between 90 percent and 110 percent of fair market rent
for the area determined and published by th e federal Department of Housing and Urban
Development (HUD), or (2) the “exception fair market rents,” which is a rent amount
outside of that range set by the local public housing agency and approved by HUD. The
two alternative statutory options for setti ng maximum rent correspond to the payment
standard amounts determined by the local public housing agency for purposes of the federal
Housing Choice Voucher program.

C/D-2
A.
Section 47—which was enacted to establish the parameters for the conditions under
which the government could us e public bond proceeds to as sist developers in building
affordable housing units and not to mandate the terms of the contractual relationship
between landlords and tenants 1—defines the “maximum rent ” that can be charged as
follows: “the area fair market rent or excepti on fair market rents for existing housing, if
applicable, as established by the federal Department of Housing and Urban Development.”
Minn. Stat. § 474A.047, subd. 1(a)(2). Thus, under Section 47, the “maximum rent” is an
amount equal to something called “area fair market rent” or an amount equal to something
called “exception fair market rents.”2 As the court points out, the Legislature did not define
either of those phrases. Th e underlying dispute centers ar ound what those phrases mean
and how they work together to define the “maximum rent” allowed under Section 47.

1 Thompson asserts that her lease in all re levant years incorporated the limitation on
maximum rent set forth in Section 47.

2 As I argue below, Section 47 is ambiguou s in several ways relevant to the precise
issue before the court. In addition to those ambiguities, it is not clear from Section 47 how
to choose when area fair market rent is th e applicable maximum rent and when exception
fair market rent is the applicable maximum re nt. On the one hand, the statute is defining
the maximum rent, which may suggest that the landlord may charge whichever of the two
options is greater. See Minn. Stat. § 474A.047, subd. 1(a)(2). On the other hand, the phrase
“if applicable” follows the phrase “exception fair market rents,” which may mean that
maximum rent under Section 47 is “exception fair market rents” unless no “exception fair
market rents” apply to the unit. Id. If the latter construction is correct, then an exception
fair market rent amount of less than HUD-published fair market rent would be the Section
47 cap on rent. All this suggests that the Legislature may wish to clarify the definition of
maximum rent in Section 47.
C/D-3
As an initial matter, it is useful to defi ne some terms. First, federal regulations
define “fair market rent” as
the rent, including the cost of utilities (except telephone), as established by
HUD, pursuant to this su bpart, for units of vary ing sizes (by number of
bedrooms), that must be paid in the market area to rent privately owned,
existing, decent, safe and sanitary re ntal housing of mo dest (non-luxury)
nature with suitable amenities.
24 C.F.R. § 888.111(b) (2001).3 Fair market rent is a singl e dollar amount rather than a
range of amounts. Second, federal regulati ons include the concept of a basic payment
standard that a local public housing author ity may adopt without HUD approval. That
basic payment standard may range from 90 percen t to 110 percent of fair market rent.
42 U.S.C. § 1437f(o)(1)(B); 24 C.F.R. § 982.503(b) (2001). Third, federal regulations also
allow local public housing authorities to adopt an “exception payment standard amount”—
rent below 90 percent or above 110 percent of fair market rent. But the local public housing
authority may do so only with HUD approval. 42 U.S.C. § 1437f(o)(1)(D); 24 C.F.R.
§ 982.503(b)(2).
The Owner’s position on how to determine what “maximum rent” may be charged
has shifted over the course of the litigation. In the district court and at oral argument before
the court of appeals, the Owner asserted that “area fair market rent” means the fair market
rent amount published by HUD (the single amount) and that “exception fair market rents”
means any rent other than the single HUD-published fair market rent that the local public

3 I use 2001 federal statutes and regulations, when appr opriate, because those were
the statutes and regulations in place when the Legislature enacted the current definition of
maximum rent in Section 47.
C/D-4
housing authority adopted as a payment standard. Those exception fair market rents could
be the basic payment standard that the local public housing authority could adopt without
HUD approval (from 90 percent to 110 percent of fair market rent) and “exception payment
standard amounts” outside that basic range that must have HUD approval. See 24 C.F.R.
§ 982.503(b), (c). In its briefs to the cour t of appeals, however, the Owner argued that
“area fair market rent” means a rent amou nt established by the local public housing
authority within the basic range of 90 percent to 110 percent of fair market rent and that
“exception fair market rents” means the “exception payment standard” amount above 110
percent of fair market rent or below 90 percent of fair market rent. Importantly, the
Owner’s differing positions are consistent on one point: under either approach, there are
no gaps in the range of rent amounts that landlords are permitted to impose.
Thompson’s position is that “area fair market rent” means a single number: the “fair
market rent” published by HUD on an annual basis. See 24 C.F.R. § 888.115(a) (2021).
Thompson claims that the rent the Owner char ged her violated Section 47 and, thus, her
lease because the rent was greater than the si ngle fair market rent amount published by
HUD. Notably, Thompson declined to take a firm position on what “exception fair market
rents” means even though that phrase is a fundamental part of Section 47’s definition of
“maximum rent.” In her br ief, Thompson conditionally stat es that she “agrees that if
exception [fair market rent] can be defined at all by the [Housing Choice Voucher]
C/D-5
regulations, the [Housing Choice Voucher] exception payment standard [identified by the
court of appeals] is the only proper fit.” (Emphasis added.)4
Thompson’s reference to the exception payment standard refers to rents adopted by
local public housing authorities and approved by HUD that are less than 90 percent of the
fair market rent amount or greater than 110 percent of the fair market rent amount. In
addition, as explained more fully below, Thompson also asserts that no rent is legal if the
specific amount is not formally approved by HUD. Based on these assertions, unlike the
Owner’s positions, Thompson’s position presumes that, in Section 47, the Legislature
intended to create gaps in the rent amounts allowed both above and below the fair market
rent amount: a landlord may charge rent that is either less than 90 pe rcent of fair market
rent (if approved by HUD), ex actly HUD-published fair market rent, or greater than 110
percent of fair market rent (if approved by HUD). Stated another way, under Thompson’s
reading of Section 47, a landlord could not charge rents between 90 percent and exactly
100 percent of fair market rent or between exactly 100 percent and 110 percent of fair
market rent. (Presumably, the rent the Owner charged Thompson is less than 110 percent
of the fair market value determined and published by HUD.)
Both the district court and the court of appeals settled on the position taken by the
Owner in its brief to the court of appeals: the “maximum rent” a landlord may charge a

4 Alternatively Thompson claims that we could look to the “s mall area fair market
rent” concept, see 24 CFR § 888.113(c)(1), (d )(2) (2021), to understand what “exception
fair market rents” means. But because that provision was not adopted until 2016, see
Establishing a More Effective Fair Market Rent System, 81 Fed. Reg. 80,567, 80,580–81
(Nov. 16, 2016), it is hard to see how the 2001 Legislature could have been thinking about
that provision when it enacted Section 47.
C/D-6
tenant under Section 47 is either (1) the “are a fair market rent,” defined as the amount
established by the local public housing author ity within the basic ra nge of 90 percent to
110 percent of fair market rent; or (2) “e xception fair market rents,” defined as the
“exception payment standard” amount above 110 percent of fair market rent or below 90
percent of fair market rent, an amo unt that must be approved by HUD. Thompson v.
St. Anthony Leased Hous. Assocs. II, LP , 961 N.W.2d 787, 794 (Minn. App. 2021); see
24 C.F.R. § 982.503(b)(2), (c) (2021). For the reasons stated below, I agree with the
conclusion reached by the district court and the court of appeals.
In contrast, the court adopts Thompson’s position that “area fair market rent” means
the fair market rent published by HUD and e xpressly declines to an alyze the meaning of
the phrase “exception fair market rents.” Th is piecemeal approach, which plucks four
words (“area fair market rent”) out of a definitional phrase (“maximum rent”), is
methodologically and practically problematic. See generally William N. Eskridge, Jr. &
Victoria F. Nourse, Textual Gerrymandering: The Eclipse of Republican Government in
an Era of Statutory Populism , 96 N.Y.U. L. Rev. 1718 (2021); Victoria Nourse, Picking
and Choosing Text: Lessons for Statutory Interpretation from the Philosophy of Language,
69 Fla. L. Rev. 1409 (2017). The meaning of “area fair market rent” has no relevance aside
from its relationship with defining “maximum rent.” The real question before us is, what
does “maximum rent” in Section 47 mean, not what does “area fair market rent” mean. A
fundamental disagreement I have with the court is whether we can understand the meaning
of “maximum rent” without considering all co mponents of the statutory definition. My
position is that one cannot m eaningfully discern what “m aximum rent” means without
C/D-7
considering how “area fair market rent” and “exception fair market rents” interact. Further,
because “area fair market rent” and “exception fair market rents” are the two alternative
measures in the definition of “maximum re nt,” we cannot understand what “area fair
market rent” means without also having an understanding what “exception fair market
rents” means. The two concepts inform each other’s meaning. And because there is
incomplete statutory interpretation, the co urt provides Minnesota lawyers and litigants
incomplete guidance.
B.
I now turn to my analysis of the meaning of “maximum rent” in Section 47. First,
I agree with the consensus of th e parties, the district court, the court of appeals, and the
court that this is not a case where the anal ysis turns on parsing th e plain and ordinary
meaning of the words of the statute. Becaus e the Legislature did not define the phrases
“area fair market rent” and “exception fair mark et rents,” everyone agrees that it is
appropriate to look to federal affordable housing law and regulati ons for guidance in
interpreting the definition of “maximum rent” in Section 47. After all, Section 47 expressly
refers to the federal Department of Housing and Urban Development. See Minn. Stat.
§ 474A.047; see also Act of May 29, 2001, ch. 214, § 24, 2001 Minn. Laws 973, 983–85
(codified as amended at Minn. Stat. § 474A.047) (eliminating state-imposed restrictions on
the use of tax-exempt bonds for rental pr ojects and replacing them with the current
requirements conforming to income restricti ons and rent limits esta blished under federal
housing law). But an analysis that focuse s on federal housing law and regulations is
complicated because neither the phrase “area fair market rent” nor the phrase “exception
C/D-8
fair market rents” existed in the federal regu lations in 2001 when the current language of
Section 47 was adopted.
As an initial matter, the Legislature did not use the federally defined term “fair
market rent” set forth in 24 C.F.R. § 888.111(b) (2001), but instead used the phrase “area
fair market rent.” Of course, this difference could simply be legislative shorthand for the
fact that HUD sets fair market rents for each “geographic area in which rental housing units
are in competition.” 24 C.F. R. § 888.113(a) (2001); see 24 C.F.R. § 888.111(b)
(referencing “market area” in the definition of “fair market rent”). But we do not know
that for sure. Indeed, the Legislature could have achieved the same result by using the
precise term in the federal regulations—“fair market rent”—because the federal regulatory
definition of “fair market rent” alrea dy includes an area-specific focus. See 24 C.F.R.
§ 888.111(b). If that is all that was meant, the Legislature did not need to use the modifier
“area” in the phrase “area fair market rent.” It could have just stated that (unless the
concept of exception fair market rents is applicable) maximum re nt is “fair market rent.”
Consequently, it is also reasonable to conclude that the Legislature intended the modifier
“area” to do additional work—to focus attention on how the HUD-published “fair market
rent” was actually applied in a given local area. See State v. Thonesavanh , 904 N.W.2d
432, 437 (Minn. 2017) (explaining that we fa vor “giving each word or phrase in a statute
a distinct, not an identical, meaning” ). Under this reading, the phrase “ area fair market
rent” refers to the rent a landlord may charge in a given local area determined by a local
public housing agency using the payment standards methodol ogy set forth in the federal
regulations (which includes both basic payment standards and exception payment
C/D-9
standards); rents that may deviate from the single fair market rent established by HUD. In
short, because there are thes e two reasonable alternative me anings, the statutory phrase
“area fair market rent” is ambiguous.
Similarly, the other component of Section 47 “maximum rent”—the phrase
“exception fair market rents”—did not exist in federal housing law and regulations in 2001.
Nonetheless, the concept of ex ceptions to the fair market rent determined and published
annually by HUD did exist a nd provide interpretive guidance. Indeed, both parties agree
that we may look to other federal regulations—the Housing Choice Voucher program being
the most obvious—to provide meaning to exception fair market rents.
For example, as referenced above, the fede ral government used fair market rent in
implementing the Housing Choice Voucher program “to determine payment standard
schedules.” 24 C.F.R. § 888.111(a) (2001); see 42 U.S.C. § 1437f(c)(1) (2000) (requiring
the HUD Secretary to establish “fair market re ntal . . . not less than annually”). The
“payment standard” is the maximum rent fo r which the federal government will provide
subsidies.5 See 42 U.S.C. § 1437f(o)(1)(A), (o)(2) (2000). Thus, the payment standard is
a stand-in for what the federal government considers to be the maximum affordable rent in
an area.

5 Under the voucher program, an income-q ualified tenant and the federal government
share the cost of affordable rent. The tenant pays a certain percentage of their income
toward rent and the federal government (thr ough the local public housing authority) pays
the rest up to the lower of the actu al rent or the payment standard. See 42 U.S.C.
§ 1437f(o)(1)(A), (o)(2) (2000). The payment standard sets the cap of what the federal
government will subsidize.
C/D-10
Under federal law, local public housing agencies set the payment standards for the
voucher program in their area. See generally 42 U.S.C. § 1437f(o)(1) (2000); 24 C.F.R.
§ 982.503(a) (2001). The public housing agency is authorized to set the payment standard,
without express HUD approval, in a range fro m 90 percent of the “fair market rental”
published by HUD to 110 percent of the “fair market rental” published by HUD. 42 U.S.C.
§ 1437f(o)(1)(B); 24 C.F.R. § 982.503(b) (2001) (stating that a public housing agency may
establish a payment standard amount between 90 percent and 110 percent of the published
fair market rent—known in the regulation as the “basic range”—without HUD approval).
The payment standards set by local public housing agencies are subject to HUD oversight
and modification when a “significant percen tage” of tenants are “paying more than
30 percent of adjusted income for rent.” 42 U.S.C. § 1437f(o)(1)(E). And a public housing
agency must revise the payment standard am ount each year after HUD publishes the fair
market rent for the area, but only when the new fair market rent pushes the local payment
standard outside the basic range. 24 C.F.R. § 982.503(b)(1)(i) (2021).
Federal law also authorizes an excep tion mechanism for ci rcumstances where a
local public housing agency wants to set a pa yment standard that is “less than 90 percent
of the fair market rental or [that] exceeds 110 percent of the fair market rental” for the area.
42 U.S.C. § 1437f(o)(1)(D). HUD established a regulatory mechanism for establishing
such an “exception payment st andard amount” for rents outside the basic range. See
24 C.F.R. § 982.503(b)(2). The exception pa yment standard may be established for a
C/D-11
designated part of the entire market area known as an “exception area.” 24 C.F.R.
§ 982.503(c) (2001).6
Finally, it is worth noting that the phrase “exception fair market rent” has a historical
pedigree in federal law. Before the passage of the Quality Housing and Work
Responsibility Act of 1998, Pub. L. No. 105-276, 112 Stat. 2518, federal regulations
defined “exception rent” as follows:
Exception Rent means in the certificate program, an initial rent (contract rent
plus any utility allowance) in excess of the published FMR. In the certificate
program, the exception rent is approved by HUD, and is used in determining
the initial contract rent. In the voucher program, the HA [housing authority]
may adopt a payment standard up to the exception rent limit approved by
HUD for the HA certificate program.
24 C.F.R. § 982.4 (1997). The pre-1998 regulations also defined “[fair market
rent]/exception rent limit”:

6 The concept of regulatory flexibility and exce ptions to fair market rent is also found
in 42 U.S.C. § 1437f(c) (2000), which addressed the contents and purposes of contracts for
assistance payments between a landlord and a public housing agency. The statute provided
that such assistance contra cts shall, among other things, establish a “maximum monthly
rent.” 42 U.S.C. § 1437f(c)(1). The provision further explains that “the maximum monthly
rent shall not exceed by more than 10 per ce ntum the fair market rental” for the market
area established by HUD. Id.
There was also an exceptio n to the rule capping ma ximum monthly rent at
110 percent of the HUD-published fair market rent:
[T]he maximum monthly rent may exceed the fair market rental (A) by more
than 10 but not more than 20 per centum where the Secretary determines that
special circumstances warrant such higher maximum rent or that such higher
rent is necessary to the implementation of a housin g strategy as defined in
section 12705 of this title, or (B) by such higher amount as may be requested
by a tenant and approved by the pub lic housing agency in accordance with
paragraph (3)(B).
42 U.S.C. § 1437f(c)(1). The maximum monthly rent also must be reasonable. Id.
Notably, unlike the voucher program, HUD-published fair market rent appears to be a floor
for maximum rent in the context of assistance contracts.
C/D-12
The Section 8 existing housing fair market rent published by HUD
headquarters, or any exception rent. In the certificate pr ogram, the initial
contract rent for a dwelling unit plus any utility allowanc e may not exceed
the [fair market rent]/exception rent limit (for the dwelli ng unit or for the
family unit size). In the voucher program, the HA may adopt a payment
standard up to the [fair market rent]/exception rent limit.
Id. In short, before the 1998 federal legisl ation, the fair market rent determined and
published by HUD under 24 C.F. R. § 888, Subpart A, was th e maximum contract rent or
payment standard unless HUD approved a higher contract rent or payment standard in a
particular area. See generally Section 8 Certificate and Voucher Programs Conforming
Rule, 63 Fed. Reg. 23,826, 23,831–34 (April 30, 1998).
These definitions were eliminated in re sponse to a decision by the 1998 Congress
to merge the certificate program and the vouc her program, essentially eliminating the
certificate program. See Section 8 Tenant-Based Assistance; Statutory Merger of Section
8 Certificate and Voucher Programs, 64 Fed. Reg. 26,632, 26,640–41 (May 14, 1999)
(Interim Rule); Section 8 Tenant-Based A ssistance; Statutory Merger of Section 8
Certificate and Voucher Progr ams; Housing Choice Vouche r Program, 64 Fed. Reg.
56,894, 56,894–96 (October 21, 1999) (Final Rule); see generally 24 C.F.R. § 982.502(a)
(2000) (stating that certificate program will be phased out in favor of the voucher program).
The same rule changes altered the rules and process for establishing a payment standard in
the voucher program such that a local publ ic housing agency could set the payment
standard. It was precisely then that Cong ress mandated, and HUD moved to, the current
system where local public housing agencies had discretion to set maximum rents and
payment standards within the basic range of 90 percent to 100 percent of the Part 888 HUD-
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determined fair market rent—the same rule discussed above that was in place when Section
47 was amended in 2001. See 64 Fed. Reg. 26,632, 26,648 (May 14, 1999) (Interim Rule
amending 24 C.F.R. § 982.504(b)(1)(i)); 64 Fe d. Reg. 56,894, 56,894–915 (October 21,
1999) (Final Rule); see also 42 U.S.C. 1437f(o)(1).
In other words, the concept of fair market rent/exception rent limit (under which the
maximum rent/payment standard was 100 percent of fair market rent or a higher amount
proposed by a local public housing authority and approved by HUD) textually evolved to
the current payment standard rules (under wh ich the maximum rent/payment standard is
an amount in a range between 90 percent and 110 percent of fair market rent set by the
local public housing agency or a higher or lower amount proposed by the public housing
agency and approved by HUD). That close textual family resemblance is an important clue
in our effort to understand what the Section 47 definition of “maximum rent” (“area fair
market rent or exception fair market rents for existing housing, if applicable, as established
by the federal Department of Housing and Ur ban Development”) means. Indeed, it is
particularly relevant because the language of Section 47 tracks closely with the pre-1998
defined terms of “fair market rent” and “[fair market rent]/exception rent limit.”
These details concerning federal statutes and regulations reveal two important
insights that help in discerning the meaning of Section 47’s phrase “ar ea fair market rent
or exception fair market rents for existing hous ing, if applicable, as established by the
federal Department of Housing and Urban Development.” First, it is difficult to make the
case that the phrases “area fair market rent” and “exception fair market rents”—which all
parties agree are undefined and require refere nce to federal affordable housing law—are
C/D-14
“clear and free from all ambiguity.” Minn. Stat. § 64 5.16 (2020) (emphasis added).
Accordingly, I conclude that the statute is ambiguous. Second, the structure of the federal
regulations is consistent. In no case—either under the previous fair market rent/exception
rent limit rule or under the current rule that gives local public housing agencies discretion
to set maximum rent in a range up to 110 pe rcent of fair market rent (and requires HUD
approval if the local housing authority wishes to depart from the range)—is there a gap
between the rent that may be charged under the basic rule and the rent that may be charged
under the exception rule.7
C.
In addition to the disagreeme nt over the meaning of the phrases “area fair market
rent” and “exception fair market rents,” there is also a disagreement over the meaning of
the phrase “as established by the federal Department of Housing and Urban Development.”
Minn. Stat. § 474A.047, subd. 1(a)(2). Everyone, however, seems to agree that the phrase
qualifies both the phrases “area fair market rent” and “exception fair market rents.”

7 Notably, the fair market rent determin ed and published by HUD definitively defines
maximum rent without any exception mechan ism under some federal regulations. For
instance, the HOME program, under Part 888, provided that fair market rent is the
maximum rent limit; no market-based rent exception mechanisms exist. 24 C.F.R.
§ 92.252(a)(1) (2001). The HO ME program regulations provide that a rent below fair
market rent may be required, but those lowe r rents are based on the tenant’s income and
not on comparable rents in the area (like fair market rent and exception fair market rents).
24 C.F.R. § 92.252(a)(2), (b). The HOME program seems less relevant to this discussion
because Section 47 adopted a structure of maximum rents that includes a rental-market-
based exception mechanism based on comparab le rents; the structure absent from the
HOME program. In 2001, when Section 47 was enacted, the Emergency Solutions Grants
program, referenced by the court, did not include rules related to non-crisis rental assistance
or refer to rent limits or fair market rent. 24 C.F.R. § 576 (2001).
C/D-15
One understanding of the phrase “as esta blished by the federal Department of
Housing and Urban Developmen t” is that HUD “establishes” a rent amount when it
determines and publishes a rent am ount for each housing market area. See 24 C.F.R.
§ 888.111(b) (stating that “[f]air market rent means the rent . . . as established by HUD,
pursuant to [24 C.F.R. § 888.113] . . . that must be paid in the market area to rent privately
owned, existing, decent, safe and sanitary re ntal housing of modest (non-luxury) nature
with suitable amenities” (emphasis added)); 24 C.F.R. § 888.113 (2001) (setting forth the
methodology HUD uses to establish fair market rents).
That is not the only interpretation, howe ver. Another reasonable reading of the
phrase “as established by the federal Department of Housing and Urban Development” is
one that looks to how the concepts of “area fair market rent” and “exception fair market
rents” are used in federal housing regulations. After all, those concepts were established
(as that word is commonly understood and de fined in the dictionaries on which the court
relies) by HUD. This broader approach is reasonable for several reasons.
First, HUD itself recognizes that fair market rents for an area are “estimates of rent
plus the cost of utilities, except telephone,” 24 C.F.R. § 888.113(a) (emphasis added), and
are determined by HUD to be “ used in the Section 8 Housing Choice Voucher
Program . . . , Section 8 project-based assi stance programs and ot her programs requiring
their use,” 24 C.F.R. § 888.111(a) (emphasis added). HUD regulations further elaborate:
“In the voucher program, the [fair market rent s] are used to determine payment standard
schedules. In the Section 8 pr oject-based assistance programs, the [fair market rent]s are
used to determine the maximum initial rent.” Id. Accordingly, as illustrated by the
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discussion of federal law and regulations set forth above, the fair market rent published by
HUD is not in every case an end in itself but rather is just a step toward an end. It is one
element of a broader regulatory regime established by HUD. Moreover, as discussed
earlier, that observation is true in other regulations where fair market rent is paired with a
mechanism for creating an exception to fair market rent.
Second, and perhaps more telling, the Sec tion 47 phrase “as established by the
federal Department of Housin g and Urban Development” app lies not only to the words
“area fair market rent” but also to the words “exception fair market rents.” But HUD does
not determine and publish “exception fair market rents” in the same way as it establishes
and publishes “fair market rents” for an area. Rather, exception fair market rents originate
through the work of local pub lic housing authorities under ru les set forth by HUD in the
federal regulations. Thus, at least in the context of exception fair market rents, the meaning
of “established” adopted by the court—a spec ific rent amount determined and published
annually by HUD—is unintelligible.
In the context of exception fair market rents, “established” by HUD must mean
something like “developed in accordance with the rules and process set forth in the federal
regulations developed and issued by HUD.” An d if that is the meaning of “established”
for exception fair market rents, it is hard to understand why the meaning of the exact same
words in the exact same statute should be different when applied to area fair market rents.
See Wilbur v. State Farm Mut. Auto. Ins. Co. , 892 N.W.2d 521, 524 (Minn. 2017)
(explaining that we favor interpreting the same word in the same context consistently). This
broader process-based understanding of “established” can readily fit with the phrase “area
C/D-17
fair market rent,” especially when one unde rstands the Legislature’s use of the adjective
“area” to qualify the federally defined phrase “fair market rent” as conveying the intent to
focus on fair market rent as adopted by the local public housing authority for the particular
area using the payment standards methodology. Supra at D7–D8. The payment standards
methodology is a set of rules and a process set forth in the federal regulations and issued
by HUD.
Thompson offers yet anothe r reasonable meaning of “established by the federal
Department of Housing and Ur ban Development.” She asserts that a rent amount is
“established” by HUD when it is approved by HUD. More fully developed, under this
interpretation, “area fair market rent” is established when HUD approves (gives formal or
official sanction) of annual fair market re nt amounts by determining and publishing fair
market rents under 24 C.F.R. §§ 888.113 a nd .115 (2001). Unlike the first definition of
“established” adopted by the court solely with reference to “area fair market rent” where
the focus is on a determina tion and publication by HUD of a particular rent amount,
Thompson’s understanding also encompasses “ex ception fair market rents.” Under this
interpretation, “exception fair market rent s” are established when HUD approves an
exception to fair market rent proposed by a local public housing agency. But because rents
in the basic range need not be approved by HUD, rents within the basic range are not
“established” by HUD. One may wonder why the Legislature used the word “established”
in Section 47 when it meant “approved,” but the interpretation remains reasonable. See
Merriam Webster’s Collegiate Dictionary 397 (10th ed. 1996) (defining “establish” as “to
institute . . . by enactment or agreement” or to “bring about”).
C/D-18
Therefore, the phrase “estab lished by [HUD]” may refer to a specific single rent
amount determined and published by HUD, it may refer to a rent amount determined by
the local public housing authority in accordance with regulations issued by HUD, or it may
refer exclusively to a rent amount approved by HUD (either the fair market rent determined
and published by HUD or a rent below 90 percent of fair market rent or above 110 percent
of fair market rent and requires express HUD approval). I conclude that the first meaning
is unreasonable because, as discussed above, it is unintelligible when applied to “exception
fair market rents.” But the other two meanings of “established by [HUD]” are reasonable.
Consequently, the meaning of “established by [HUD]” is also ambiguous.
D.
To summarize the analysis so far: the meaning of “area fair market rent,” “exception
fair market rents,” and “established by [HUD]” are all ambiguous and lead to two
reasonable alternative interpretations of “maximum rent” in Section 47:
(1) Fair market rent determined and published by HUD under 24 C.F.R. § 888.115
or a rent higher or lower than the range of 90 percent to 110 percent of fair market rent
proposed by the public housing authority a nd approved by HUD in accordance with
24 C.F.R. § 982.503(b)(2) and (c). Stated more simply, under Section 47, “maximum rent”
could mean a rent amount that is exactly the fair market rent determined and published by
HUD, or a rental amount above 110 percent of fair market rent (or perhaps below 90
percent of fair market rent) set by the local public housing agency and approved by HUD;
or
C/D-19
(2) The maximum affordable rent amount for the area appr oved under federal
regulations by the local public housing authority (rent in a range between 90 percent and
110 percent of fair market rent—equivalent to the concept of basic payment standard),
24 C.F.R. § 982.503(b)(1), or a rent higher or lower than the range of 90 percent to 110
percent of fair market rent proposed by the public housing authority and approved by HUD
in accordance with 24 C.F.R. § 982.503(b)(2) and (c) (equivalent to the exception payment
standard). Stated another way, under this interpretation, the “maximum rent” under Section
47 is a rent amount that is between 90 percent and 110 percent of fair market rent as set by
the local public housing agency or a rent am ount outside of that range set by the local
public housing agency and approved by HUD.8
In determining which of these two altern ative interpretations best reflects the
Legislature’s intent, it is worth noting at this point another textual clue that is helpful in
sussing out the meaning of the Section 47 definition of “maximum rent.” Section
474A.047, subdivision 1(a)(2), also provides that “[t]he rental rates of units in a residential
rental project for which project-based federal assistance payments are made are deemed to
be within the rent limitations of this clause.” In other words, the Legislature understood

8 A third interpretation of “maximum rent” is fair market rent or exception fair market
rent defined consistent with the pre-1998 version of the federal statute, which used
language that most closely mirrors the language adopted by the Legislature in Section 47.
But although this interpretation has the bene fit of mirroring most closely the actual
language of Section 47, this option is unreasonable because, as of 2001 when Section 47
was enacted, there was no mechan ism in the federal regulation for HUD to approve rents
that are between 90 percent and 110 percent of fair market rental. This interpretation of
Section 47 is thus not a practi cal reading of the statute. No netheless, as discussed above,
the historical evolution remains an important clue to our understanding of “maximum rent”
in Section 47.
C/D-20
that rental rates that satisfied federal regula tions for project-based assistance payment to
tenants qualify as falling within “area fair market rent or exception fair market rents . . . if
applicable, as established by [HUD].” Id.
Returning to the HUD regulatory definition of “fair market rent” in 24 C.F.R.
§ 888.111(a), we see that it provides that “[ i]n the Section 8 project-based assistance
programs, the [fair market rent]s are used to determine the maximum initial rent.” The
maximum monthly rent under the assistance payments contract “shall not exceed by more
than 10 [percent] the fair market rent al established by [HUD].” 42 U.S.C.
§ 1437f(c)(1)(A). The rental rate must also be “reasonable in comparison with other units
in the market area that are exempt from local rent control.” Id.
The last sentence in section 474A.047, subdivision 1(a)(2), thus provides important
context. First, it tells us th at the Legislature did not intend a HUD-published fair market
rent to be the final and definitive cap on Section 47 rents. Rather, it decided to incorporate
the ways in which fair market rent was used to determine affordable rents in a particular
area. Notably, the HUD regulatory defin ition of “fair market rent” in 24 C.F.R.
§ 888.111(a) also provides that “[i]n the voucher program, the [fair market rent]s are used
to determine payment standard schedules”; a structure that mirrors the regulatory language
for project-based assistance. Second, the last sentence of section 474A.047, subdivision
1(a)(2), also tells us that the Legislature was focused on the use of fair market rents in
tenant-based assistance programs. Third, si nce federal law gives local public housing
agencies the discretion to set rents that differ from the HUD-published fair market rent in
the context of project-based assistance, the Legislature understood when enacting Section
C/D-21
47 that rents set within the discretion of a local public housing agency without the approval
of HUD fall within the concept of Section 47 maximum rent. Finally, the Legislature did
not understand that maximum rent could not be set between 100 pe rcent and 110 percent
of fair market value (Thompson’s explicit and the court’s implicit position) since that range
of rent amounts is expressly included as a pe rmissible maximum initial rent for Section 8
project-based assistance programs. In short, the last sentence of the Section 47 maximum
rent provision is a strong textual clue suppo rting the second option identified above: the
maximum rent that can be charged under Secti on 47 is a rent amount that is between 90
percent and 110 percent of fair market rent as set by the local public housing agency or a
rental amount outside of that range set by the local public housing agency and approved by
HUD.
One additional clue supports this conclusi on that the second option is what the
Legislature intended. As discussed above, no version of federa l law and regulations
conceived of a regime where ther e is a gap in the amount of rent that could be charged.
But option one set forth above—which the court adopts and under which rent can be exactly
fair market rent or a rent that is below 90 percent of fair market rent or above 110 percent
of fair market rent—creates precisely that regime. 9 It really makes no sense for the

9 Like Louis Renault’s shock that gamb ling was going on in his establishment in
Casablanca, the court denies that it is authorizin g a regime where there is a gap in the
amount of rent that could be charged. But by not offering any reading of the “exception
fair market rents” in the Section 47 definition of maximum rent, the court is creating a gap.
Assuming the court’s understanding of “area fair market rent” is correct, no one has offered
an interpretation of “exception fair market rents” that would not create a gap. And because
interpreting a single part of the definition of maximum rent without considering the whole

C/D-22
Legislature to adopt such a regime; no good justification is offered for it. This is
particularly compelling when one considers the fact that Section 47 was enacted to regulate
the terms under which affordable housing developers can use certain state mechanisms to
help finance affordable housing developments, not regulate leases between landlords and
tenants. Providing more flexibility rather than less seem s consistent with that overall
purpose.
“The legislature does not intend a result th at is absurd, impossible of execution, or
unreasonable.” Minn. Stat. § 645.17(1) (2020 ). As the district court judge (who also
happens to be a former legislator and pu blic finance chair) stated regarding the
interpretation ultimately adopted here by the court:
[This] reading of Section 47 woul d create an unintended ‘Minnesota
exception’ to the maximum rents chargeable for affordable housing . . . . For
that reason, the Court finds that in dr afting Section 47, . . . the Legislature
intended to define the rent limit for Sec tion 47 . . . as a rent limit consistent
with HUD regulations [for the Tenant-Based Assistance program].
I agree.10

definition is incomplete statutory interpretation, the existence of this unjustified gap is an
important consideration that cannot be justif ied on the ground that the plain language
means we cannot question whether the Legislature wanted to enact such an odd result.
Moreover, by limiting its holding in this ca se to the four words “area fair market
rent” while largely ignoring the rest of the Section 47 definition of maximum rent, the court
is leaving Minnesota law in precisely this situation. The cour t of appeals’ holding about
the meaning of “exception fair market rents” as those outside the ra nge of 90 percent to
110 percent of HUD-published fair market rent remains the law in Minnesota.

10 Thompson claims that her in terpretation of the statute is good public policy because
it brings transparency and accountability to th e meaning of maximum rent in Section 47.
HUD-published fair market rent is easily found by tenants and, as a result, tenants can more
readily protect their rights. I do not find this argument persuasive. First, Section 47 has

C/D-23
In summary, I conclude that maximum rent under Section 47 is a rent amount that
is between 90 percent and 110 percent of fair market rent as set by the local public housing
agency or a rental amount outside of that range set by the local public housing agency and
approved by HUD.
I respectfully dissent.

nothing directly to do with l eases between landlords and tenants. It regulates the terms
under which developers can access public funds administered by the state or local
governments. See generally Minn. Stat. ch. 474A (2020). Those entities are sophisticated
and so the need for transparency is not as urgent. And one of my gravest concerns about
the court’s interpretation of Section 47 is that not only will it be the law as between
landlords and tenants, but also it will govern the terms of the relationship among developers
who received public funds as part of a larger financing structure to build affordable housing
and the government agencies who approved t hose loans and the other financial partners
involved in the development deal. The uninte nded consequences of the court’s
interpretation have the potential to disr upt settled expectations regarding numerous
affordable housing projects across the state. Second, the point of the 2001 amendment was
to eliminate program requirements unique to Minnesota and replace them with known
federal conditions. Thompson’s argument may cut against such uniformity. Third, while
consideration of these competi ng policy concerns is not forbi dden as a tool for trying to
understand what is meant by an unclear statute, in this case, humility cautions that as judges
we should not venture too far into the policy arena. The complexities of how to best foster
the financing and development of more affordable housing units in Minnesota are beyond
my capacity as a judge. Minnesotans are fa r better served by leav ing such complicated
policy debates to the Legislature.