Occupancy Standard of 2 Persons Per Bedroom Challenged

From the Government Affairs Team at the NAA:

Member Advisory: Fair Housing – Familial Status Litigation

A fair housing complaint has been filed against an NAA member company that operates properties in several states. The complaint questions the member’s occupancy standards, alleging discrimination on the basis of familial status. It specifically targets the policy restricting occupancy to two-persons per bedroom. We anticipate that this is the leading edge of a trend in fair housing litigation.

The “Keating Memo”

The two-persons per bedroom maximum occupancy policy is a standard utilized widely by apartment owner-operators in accordance with HUD’s standard of policy established in the so-called Keating Memo issued in December 1998. According the memo, a two-persons per bedroom rule is acceptable with some limited exceptions in light of other relevant factors (for example, two adult parents with an infant child should be allowed to rent a large one-bedroom).

This recent complaint states that such a policy is unreasonable and both excludes and limits the number of families with children who can live at the owner’s properties thus discriminating against families with children. The complaint suggests that owners should use local building or zoning codes to develop a policy on the basis of square footage and accounts for the entire livable space in the unit. Alternatively, the complaint suggests that owners rely on the International Property Maintenance Code which would allow up to eight people in a two-bedroom unit measuring at 1100 square feet.

Next Steps for NAA Members

NAA members are strongly encouraged to review their occupancy standard policies with an attorney to ensure they are in compliance with fair housing laws. To help in that review process, please refer to the guidance document issued earlier this year by NAA and the National Multifamily Housing Council: Fair Housing: Familial Status and Occupancy (member login required). This document contains a review of the law, recent litigation specifically targeting familial status and occupancy restrictions and suggests best practices for proper compliance. Members are also strongly encouraged to review insurance documents and identify which types of litigation claims are covered and any relevant limitations or restrictions.