Occupancy Standards

Setting Occupancy Standards Without Discriminating.

This Is A Summary Page
The below topics are discussed in much more depth
  on our members' Occupancy page.

Non-Members' Homepage

Persons per bedroom vs. persons per square foot of living space .

The question of what is a "reasonable" occupancy standard has been a troubling one for rental property owners for several years. The number of people willing to share a home is often economic but may also be cultural.
      Federal Fair Housing law prohibits discrimination based on: race, religion, ethnic background or national origin, sex, age, children (except in certain designated senior housing) and mental or physical disability.
      Property owners and managers must always be sure they are not using occupancy standards to discriminate against a protected class. However, they must be concerned with occupancy for a number of good business reasons.

Depends on what the meaning of reasonable is!

      The continuing controversy between HUD and rental housing interests about the definition of the word "reasonable" has centered around the number of persons per bedroom vs. the number that local building codes allow per square foot of living space.
     The federal budget act passed by Congress and signed by President Clinton in April 1996, stated that it's okay, with certain exceptions, to limit occupancy to two persons per bedroom -- at least until the Department of Housing and Urban Development (HUD) issues a new rule. However, guard against making any standard a blanket policy because the two-per-bedroom criteria won't work in all cases.

Past Occupancy Guidelines

      Property owners need occupancy standards to keep housing from becoming overcrowded and to protect their investment. But in some cases these standards have been used to exclude families with children, something the federal fair housing act forbids.

The famous Keating Memo

      In 1991, HUD released an internal memo known as "the Keating memo" offering some guidance. The memo provided occupancy limited guidelines and also described some of the exceptions .

Then came the Diaz Memo

      In July 1995, HUD issued a new memo (the "Diaz memo"), reversing its policy and saying that owners now had to refer to the rental unit's occupant capacity by square footage, to comply with a code issued by an organization called the Building Officials and Code Administrators (BOCA).

The 1996 Law

      The federal budget law essentially cancels the Diaz memo and restores the standard of the Keating memo. This law will be in force until HUD issues a final rule on occupancy standards at some point in the future.

What 1996 Budget Law Means

      Be careful. Even though the budget law is a lot clearer than the Diaz memo, the Keating memo still requires "reasonableness" when setting or evaluating your occupancy standards and does not define certain issues that might determine reasonableness .
      Discussion of various criteria are provided in the member-only version of this page.

The below topics are discussed in much more depth
  on our members' Occupancy page.

Non-Members' Homepage

Now see: Building Codes and Municipal Occupancy Standards