Occupancy Policies and the Fair Housing Act: How Many is Too Many?

Scenario. A family of five applies to rent a two-bedroom home. The family is turned away by the housing provider after being told that its occupancy policy only allows a maximum of three people in a two-bedroom unit. The family has been told this before by other housing providers and is upset they have been turned away, especially because of the lack of affordable housing options in the community.

What, if anything, can the family do?

In many cases, such a restrictive policy could violate the Fair Housing Act.

• Families with Children are Protected under the Fair Housing Act.

Families with children are a protected class under the federal Fair Housing Act (FHA). Generally, rental policies that prohibit children are considered facially discriminatory because they explicitly target and exclude a group that is protected by the fair housing laws. (The FHA does make an exception for certain senior housing.)

Overly restrictive policies may also violate the Fair Housing Act if they disproportionately impact families with children compared to those without children. Such policies may have a “discriminatory effect” or “disparate impact” on families with children by unreasonably limiting their housing choices.

Under this “disparate impact” theory, a housing provider’s seemingly neutral occupancy policy could disproportionately impact families with children and, as such, result in discrimination prohibited by the FHA, regardless of whether the housing provider had an intent to discriminate. Usually national and local statistics are used to show how many families with children the overly restrictive occupancy policy effects. Disparate impact theory under the FHA has long been recognized by courts and was recently upheld by the United States Supreme Court.

• Legal Guidance from HUD, and State and Local Occupancy Codes

The key areas of guidance on this issue include the U.S. Department of Housing and Urban Development (“HUD”) memorandum known as the “Keating Memo” (an internal memorandum that was created in 1991 and then adopted by HUD in 1998), as well as state and local occupancy codes. The Keating Memo sets out that an occupancy standard that allows for two persons per bedroom will generally be considered reasonable.

However, the Keating Memo also cites to other significant factors that could create exceptions to this rule – allowing for more or possibly fewer occupants than the two per bedroom general standard. For instance, when reviewing fair housing complaints challenging an occupancy policy, HUD will look at the size of the bedroom and unit, the age of the children, the configuration of the unit, other physical limitations of the housing (i.e., capacity of the septic, sewer, or other building systems), and state and local laws or codes.

State and local occupancy codes may be instructive, especially given that some explicitly allow for more occupants to a unit than the 2 persons per bedroom general standard. Some states, like California, and cities, like Austin, Texas, have codes that specify “2 persons plus 1” as the appropriate occupancy standard that applies. Other occupancy codes limit the number of occupants based on the square footage on the entire unit. Some further break this down to the square footage of each bedroom or habitable area, or by age groups (i.e. under 1 year old is not considered an occupant in these calculations). Some occupancy codes or ordinances also allow for a living room to be used as a sleeping area. Many occupancy codes may be obtained online, such as through web-based databases or on a local government’s website.

Additional factors that HUD will consider when evaluating complaints challenging occupancy restrictions include:

1. If the housing provider has made discriminatory statements (“I think you and your children will be better suited in a neighborhood with more children”);
2. If the housing provider has taken steps to discourage families with children from living in housing (i.e., imposing additional application or rental fees); and
3. If the housing provider has only enforced the occupancy policies against families with children (i.e. allowing 3 adults to live in a 1-bedroom unit, but not allowing 2 adults and 1 child to live in that same unit).

If the answers to any of these additional factors are affirmative, then it could indicate that that the housing provider has implemented an occupancy policy designed to exclude families with children in violation of the FHA.

• Key Takeaways.

To comply with the FHA, landlords, property managers, and other housing providers must have reasonable occupancy policies. Whether a given policy is reasonable will depend on a variety of factors, including the unit’s size, configuration, and features, as well as the local code. Housing providers should not automatically assume that a “two persons per bedroom” occupancy standard complies with the Fair Housing Act.

If your family has been excluded from housing due to familial status, including overly restrictive occupancy policies, contact the Fair Housing Project for assistance.