Everything That You Need To Know About HUD Occupancy Limits

Part of your job as a landlord is to ensure that your property is safe for tenants. All rental properties must be kept in a habitable condition. For many properties, that means that you have to ensure that you do not allow more than a safe number of people to live at the property. These rules are known as occupancy limits.

Unfortunately for landlords, there is no cut-and-dried rule about how many people can live in any given property. While many states and local governments make their own recommendations, the federal occupancy standards are guidelines with room for variation. In fact, there are even cases where following those standards could be considered to be a type of discrimination!

What should you do as a landlord to ensure that you are doing your part to protect tenants without discriminating against people for their familial size or status?

To make the right decisions on this front, you’ll need to gain some background insight into occupancy laws. Specifically, we will talk about what laws are in place and how those laws will affect your business. Let’s get started!

A Table Of Contents For Federal Occupancy Standards

• What Are Occupancy Standards?
• The Keating Memo & Fair Housing Amendment
• General Occupancy Standards: Federal, Local, And More
• How To Set Your Occupancy Rules

What Are Occupancy Standards?

Before we get into the specific details of various housing standards, let’s start by clarifying what occupancy standards are.

Occupancy standards are rules about the number of people that can live in a bedroom or at a property. These standards are usually based on the number of bedrooms at a property, but they can also take into account the total amount of liveable square footage. Often, a combination of both makes the final call about how many people can live there.

HUD occupancy standards are the rules set up by the Department of Housing and Development. These federal occupancy standards are part of the Fair Housing Act Amendment, and they are the overarching rules for occupancy.

Specific cities, localities, and states, however, can have their own additional housing maintenance rules. Cities like New York City, for example, stipulate their own guidelines about how many people can live in an apartment or house.

Occupancy standards are typically written into law, but many of the rules and limits are considered to be guidelines that must be adapted to each individual situation. We’ll talk more about this in the following sections!

The Keating Memo & Fair Housing Amendment

In December of 1998, HUD announced that it would incorporate the guidelines of the Keating Memo as part of the Fair Housing Act. This adoption was a very important turning point in the way that landlords would manage their properties. 

Fair Housing Act Changes In 1988

In 1988, familial status was added as one of the protected classes of the Fair Housing Act. The FHA ensures that renters are not discriminated against by their landlords; adding familial status prevented renters with children or those who are pregnant from being refused as frequently.

Because familial status is a protected class, any occupancy limits put into place must consider what type of reasonable family living situations should be allowed regardless of the generalized guidelines for occupancy standards.

The tension between occupancy standards and the FHA’s new class adoption led to a lot of confusion for landlords.

The Keating Memo Of 1991

General Counsel Keating took note of this confusion and felt that it was necessary to more clearly define occupancy rules to prevent any discrepancies. The goal of this document, now known as the Keating Memo, was to give examples of “reasonable” limits on occupation without strictly defining it.

The Keating Memo suggests the following:

• Two-person per bedroom policies unless other rooms in the home can be considered to be habitable
• Size of bedrooms at the property should be considered as well since a family of five may be able to fit into a two-bedroom apartment if the rooms are large enough
• Two-person per bedroom rule may be negated in situations where the bedrooms are too small as well

The memo is a good starting point, and that is why HUD adopted it as part of their overarching policies in 1998. Still, the memo is a set of suggested guidelines that help landlords set up rules for their properties that do not violate the protections put in place by the FHA. It is not a set of definitive rules.

General Occupancy Standards: Federal, Local, And More

What are the regulations that you as a landlord should be following when you set up your occupancy rules? Unfortunately, that answer is complicated as there is no one-size-fits-all policy that you can adopt for your properties.

At the base level, you will always need to be following the rules laid out in the IPMC, and your rules can never violate the Fair Housing Act. This means that you cannot discriminate against a family with a small infant living in a one-bedroom home or against a five-member family renting a large two-bedroom apartment with livable office space.

Fair housing act occupancy limits aren’t the only rules that you need to consider!

What Is IPMC?

IPMC, also known as the International Property Maintenance Code, includes a set of more specific occupancy rules. These rules are used whenever state and local laws do not give enough regulation to occupancy or when the state and local rules do not apply because of the Fair Housing Act.

The rules set out by IPMC are more specific that many other regulations:

• 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

By setting up specific size limitations into the building and property code, buildings that have more than the appropriate number of occupants based on the size can be classified as unlawful structures. This would require them to be changed immediately.

State & Local Laws

Because there is no true rule that specifically sets up occupancy standards on the national level, many cities and states have created their own rules about how many people can live in a property based on the number of rooms, the overall square footage, and a myriad of other factors. 

To be sure that you are following the laws, you will want to check and see if the housing committees in your area have any such guidelines or regulations in place to help advise you.

Violations Of HUD Occupancy Limits

If an applicant claims that they have been discriminated against according to the Fair Housing Act, how would HUD or another appropriate committee determine the truth of this?

There are a few specific situations when complaints are most likely to be proven true:

• If the landlord says anything specifically discriminatory. For example, suggesting that an applicant with children would be happier elsewhere.
• If the landlord imposes additional fees for children or children-focused items.
• If the landlord only enforces their occupancy policies on those with children, such as allowing extra adults to live somewhere but not allowing additional children.
• If the landlord markets a community as adults only or refuses to rent to those with more children than adults in the family.

As a housing provider, you are not permitted to do any of these things because familial status is a protected class under the Fair Housing Act.

How To Set Your Occupancy Rules

As a landlord or property manager, part of your job will be to set up an occupancy limit for each unit that you manage.

Figuring out what the right number is for this, however, can be quite overwhelming. While you may want to just run with the simple two-person-per-bedroom policy, this policy can be considered discriminatory in some conditions.

For that reason, it’s important that you take time to consider more factors before finalizing your rules. It’s okay to start with the general suggestion of two-people-per bedroom, but you will want to modify that to fit your property’s exact situation if necessary.

Consider all of the following before you decide your occupancy rules:

• Overall square footage
• Livable vs. uninhabitable space
• Septic/sewer limitations
• Age when child becomes an occupant (i.e., an infant is not counted as an occupant)
• Your state’s occupancy rules

The key is that you only make restrictions on the number of people that live on a property in consistent and reasonable ways. If, for example, septic systems in your area are very small, it would be reasonable to limit a two-bedroom home to two occupants at most regardless of the home size.

Some states, like California, will dictate what should generally be considered to be a reasonable occupancy standard. California says that two-persons-per-bedroom-plus-one is a reasonable rule.

Avoid Violating The Fair Housing Laws

The most important thing to keep in mind as you set up any regulatory occupancy limits is that these limits can in no way discriminate against potential applicants. Follow these guidelines to avoid an FHA violation:

• Consider bedroom size and general livable space when choosing an occupancy limit.
• All identical units must have the same limit.
• Set up occupancy limits separately for all differing units.
• Choose an age limit for when a child begins to count as an occupant (we suggest three years of age).
• Pregnant women should count as one occupant.
• All potential residents should be told the occupancy limits, not just applicants that have children.
• Occupancy policies should not be posted online.
• Policies must follow any relevant local and state laws.
• Remember that building codes, fire codes, and zoning requirements could affect the occupancy rules for your property.

Consider Creating An Overall Policy

Do you manage a number of different properties in different areas of the city? If so, you may want to consider creating a single policy that applies to all of these units unless the laws in each area make that impossible.

Why do we suggest this?

If you create different policies depending on what region you are in, there is a chance that your differing policies would be considered to be discriminatory if they are more restrictive in an area that houses a specific race or type of person.

To create a consistent policy, review all of the rules in each area that you manage properties. Then, combine the policies to create one policy that works in all of the situations. By doing this, you’ll be able to show that your policy is based on your company’s needs and not on the people that you rent to. 

Document Your Policy

Finally, make sure that you have clear documentation about your policy, why it exists, and where you created your rules from. Having this information on file will be incredibly useful if you ever find yourself in a situation where you are accused of housing occupancy discrimination.

Review the property and room configuration of each property. Then, document the occupancy rules for the property based on that configuring. Check that these rules match up with all local rules, and then file it all away.

If you ever have a case where you need to show that you came up with those regulations long before you met any disgruntled applicants, you will be able to clearly show your process and how it was not a policy created to refuse a specific applicant.

Deciding What’s “Reasonable”

HUD occupancy standards continue to be a hot topic because there is not a simple way to decide what is reasonable when it comes to occupancy rules. There are a lot of differing factors between properties that can change the occupancy expectations, and landlords have to maneuver around all of those issues.

Housing occupancy laws will continue to be an issue in the future, so the best that you can do is become familiar with all national and local laws that affect your properties.

One of your main responsibilities as landlord is to have these type of issues clearly defined through clear, legal procedures. By creating clear and consistent policies, you will be less likely to deal with any complaints regarding your occupancy procedures.