Occupancy Guidelines
Setting legally compliant occupancy standards requires careful analysis and understanding of applicable federal, state, and local law, municipal codes, and other published guidance. State and local regulations may differ in their compliance requirements and may be more or less restrictive than federal guidance depending on the circumstances.
Landlords must develop occupancy policies that are legally compliant at the governing level and agency requirements that are appropriate to the rental unit and circumstances. Industry guidance provides setting standards of ”reasonable occupancy.”
Without fully understanding what is considered reasonable in context with federal, state, and local restrictions, a landlord may need to defend his policies against claims of fair housing discrimination.
Fair Housing Act
The federal Fair Housing Act prohibits discrimination in housing because of race, color, national origin, religion, sex, familial status, and disability. Landlords cannot use occupancy restrictions to discriminate based on familial status. The Fair Housing Act’s protections against discrimination on the basis of familial status prohibit restrictive occupancy standards that are used to exclude families with children or that unreasonably limit the ability of families with children to obtain housing.
Familial status protections include:
- Adults in the household who have legal or designated custody of the child or children living in the household,
- A child or children under the age of 18 years,
- A child or children who are members of the household or expected to become household members.
HUD Guidance
A commonly utilized standard for rental occupancy limits has been the Department of Housing and Urban Development (HUD) guidance that “an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under the Fair Housing Act.” Known as the Keating Memo, the guidance provides “that in appropriate circumstances, owners and managers may develop and implement reasonable occupancy requirements based on factors such as:
- Size of bedrooms and unit,
- Age of children,
- Configuration of unit,
- Other physical limitations of housing,
- State or local housing and occupancy codes, and
- Other relevant factors.
Since the number of bedrooms is not the only factor that must be considered in developing occupancy standards, the HUD guidance is commonly referred to as the “two-per-bedroom-plus” rule.
While landlords have some flexibility in developing an occupancy policy by taking into consideration the reasonable policy of two persons in a bedroom plus other relevant factors of a given situation, the guidance does not categorically set an occupancy limit for a rental unit. A landlord cannot know for certain that a reasonable two-plus occupancy limit for a unit will meet federal standards for legal occupancy. Until a landlord analyzes each applicant in each situation, a legal maximum occupancy number cannot be established.
State and Local Laws
States and municipalities can set their own occupancy standards that may be different than federal standards. State and local standards are usually equal to or greater than federal standards. However in some states, occupancy standards may allow fewer people to occupy a rental unit. This could result in a landlord being compliant with state standards but non-compliant with the federal standard if the HUD guidance is applied. Additionally, states or municipalities may designate other protected classes which are covered by anti-discrimination laws.
Building Codes, Health and Safety Regulations
Occupancy standards have historically been justified on the basis of habitability. Too many occupants in the rental unit could cause unsafe or unhealthy living conditions.
There may be local zoning, building codes, and fire codes on occupancy limitations that apply to rental units. Some localities have property maintenance codes to regulate occupancy by providing more specific rules. As an example, the International Property Maintenance Code (IPMC) regulations could be used to set occupancy requirements such as:
- All bedrooms with one person should have at least 70 square feet.
- Shared bedrooms must have at least 50 square feet per person.
- Kitchens and other non-habitable rooms cannot be used as a bedroom.
- Every unit should have an overall occupant limitation based on its overall size:
- 1-2 occupants: must have at least 120 square feet living room,
- 3-5 occupants: must have at least 120 square feet living room and 80 square feet dining room,
- 6 or more occupants: must have at least 150 square feet living room and 100 square feet dining room.
Key Considerations
A landlord may have legitimate business reasons to restrict the number of occupants allowed in a particular rental unit. Legitimate business reasons to restrict the number of occupants in a particular rental unit could include limitations of building systems such as plumbing, electrical, sewer or septic systems that could not accommodate increased use. The age and condition of the rental unit as well as the size and configuration of the unit may also be a limiting factor for occupancy.
If the landlord’s occupancy policy restricts the number of occupants for reasons other than health, safety, or legitimate business need, the landlord may be at risk for claims of familial status discrimination.
A landlord, when developing occupancy standards for his units, must research federal, state, and local occupancy standards to determine how many people must be allowed in a particular rental unit under federal standards, under state statutes, and under local standards. There will be two sets of numbers that must be taken into consideration for occupancy standards, (1) the minimum number of occupants allowed in a particular unit, and (2) the maximum number of occupants as set by state and local health and safety codes based on the size of the rental unit and the number of bedrooms and bathrooms in the rental unit.
A common sense approach is to use standards that are at least as generous as the federal standards, but follow state and local standards if those standards are more generous than federal guidelines. (Note: While past practices have used a reasonable standard of two people per bedroom, this approach is coming under scrutiny and has been successfully challenged by HUD. It may be a better practice and in some jurisdictions a requirement to use an occupancy standard of two plus one per bedroom rule. As example, the two plus one rule allows 3 occupants for a one bedroom unit. However even this approach must be carefully researched. A landlord may need legal consultation to make sure this approach is the most current thinking regarding legal compliance.
To reduce claims of discrimination, a landlord should document his occupancy policy including how the policy has been set according to guidance on reasonable standards based on unit size, and building limitations.