National Housing Law Project Housing Law Bulletin

Revised Fair Housing Occupancy Guidelines Spark Controversy

The Fair Housing Act

In 1988 Congress amended the Fair Housing Act (Title VIII of the 1968 Civil Rights Act) to establish "familial status" as a category of persons protected against discrimination under federal law. The Act protects families with children by including in its definition of "familial status" the fact that the household includes one or more children.⁴ However, the Act also included an exemption from the definition for "any reasonable local, State or Federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling."⁵ This ambiguity has left tenants, providers and enforcers unclear about which occupancy standards are illegal.

The 1991 Keating Memorandum

In 1991, HUD's then General Counsel Frank Keating issued a memo stating that a two-person-per-bedroom policy would generally comply with the Act.⁶ The memo also reviewed other factors to be considered in rebutting this guideline and determining whether facially neutral occupancy standards illegally discriminated. As the current General Counsel noted, this 1991 memo is often cited as support for immunizing occupancy policies that permit at least two people per bedroom, but it actually required an examination of numerous factors, such as the number of bedrooms, bedroom size, unit configuration, building systems (e.g., sewer capacity), and the age of children, in addition to local codes. The main problem with this guidance is practical — its flexibility prevented definite predictions about which standards were legal and which were not, producing inconsistent and sometimes inappropriate results.⁷ Many advocates have long favored a more objective standard based upon local codes (where they permit larger families to occupy apartments) or the Uniform Housing Code (UHC) model code standards. The UHC standard provides occupancy guidelines based upon square footage rather than the number of bedrooms.⁸

The 1995 Diaz Memorandum

Because of HUD's role as primary enforcer of the Fair Housing Act under the administrative process created by the 1988 amendments, the Department's position concerning the occupancy standards issue carries enormous influence. In July of 1995, in an attempt to "correct the confusion," General Counsel Diaz issued a new interim standard to be applicable while final rulemaking proceeded, rescinding all prior guidance on the matter.⁹ This new guideline established a square footage-based "safe harbor" equivalent to what HUD's General Counsel erroneously believed to be the current Building Officials and Code Administrators (BOCA) standard.¹⁰ That is, if a provider has a standard permitting occupancy by as many persons as would be allowed under the code cited in the memorandum, HUD would not challenge it as a Fair Housing Act violation. More stringent owner-imposed standards than those cited by the Diaz memo would be carefully reviewed under the "disparate impact" standard.¹¹ More stringent federal, state or local occupancy standards would be evaluated for "reasonableness" under the Act.¹² Furthermore, the Diaz memorandum stated that any restric tion on the number of children rather than the number of occupants would be facially discriminatory and illegal.¹³

The Uniform Housing Code standard itself¹⁴ came under challenge recently at a September meeting of building officials in Las Vegas. There, some cities made an attempt to revise the standard to effectively increase the square footage requirement, thus reducing permissible occupancy, but the amendment attempt failed.

The 1995 Julian Memorandum

In response to the backlash from housing providers about the use of the square footage-based standard as a Fair Housing Act "safe harbor," HUD quickly retreated by rescinding the Diaz memo, citing the once again "considerable confusion" concerning its interpretation.¹⁵ HUD now states that rulemaking has been expedited, but until it has been completed, all cases involving facially neutral occupancy standards must be referred to the Office of Investigations for approval. The precise policy being followed by HUD's investigators remains somewhat unclear, although some advocates have heard that HUD will give strong weight to state and local code standards on occupancy, rather than to the Keating memorandum.

Congressional Action

The first legislative opportunity to address occupancy standards since this summer's Diaz memorandum came under the Senate's Fiscal Year 1996 HUD appropriations bill. Senator Faircloth sponsored an amendment, included in the leadership package and approved on the Senate floor, to block the use of any federal funds for enforcement of the Act's provisions on occupancy standards, except pursuant to the standards of the March 1991 Keating memo or a final rule.¹⁶ This provision, not part of the House version of the bill, now awaits action by the Conference Committee. Since it is similar to the position of the Julian memo, HUD will not oppose it.

These recent events provide a probable preview of the controversial role of objective square footage-based standards such as the UHC in the content of the final rule. For now, as the existence of any HUD role at all in Fair Housing Act enforcement remains hotly disputed, HUD may be quite content to let the occupancy standard issue recede to the realm of "rulemakings in progress," restoring the confusion that many providers seem to find more to their comfort.

1. Memorandum from Frank Keating to All Regional Counsel, HUD, Re Fair Housing Enforcement Policy: Occupancy Cases (Mar. 20, 1991) (two-person-per-bedroom standard is rebuttable) (on file at National Housing Law Project).
2. Memorandum from Nelson A. Diaz, HUD General Counsel, to All Field Assistant General Counsel, Re Occupancy Standards Under the Fair Housing Act (July 12, 1995).
3. Memorandum from Elizabeth K. Julian, Acting Deputy Assistant Secretary for Policy and Initiatives, for Fair Housing Enforcement Directors et al. re Occupancy Cases (Sept. 25, 1995).
4. 42 U.S.C.A. § 3602(k) (West Supp. 1995).
5. Id. § 3607(b)(1).
6. This memo came on the heels of one dated February 21, 1991, where Mr. Keating stated that an occupancy limit of "one person per bedroom plus one" would generally be reasonable. Of course, this standard would have excluded almost all of America's rental housing stock from discrimination claims by families with several children.
7. General Counsel Diaz also opined that consideration of the sex of the children in establishing standards would violate the sex discrimination provisions of the Act, although the March 1991 Keating memo does not mention this factor.
8. The Uniform Housing Code (1994), § 503.2, requires every dwelling unit to contain at least one room with at least 120 square feet, with other habitable rooms (except kitchens) containing at least 70 square feet and with sleeping rooms increased by 50 square feet for each occupant beyond the first two.
9. See Diaz Memorandum, supra note 2.
10. Actually, the General Counsel's memorandum apparently confused various older versions of the BOCA standard. The current BOCA standard does not use a square footage-based guideline. The Diaz memo recited the BOCA standard as follows: Dwelling units must contain a minimum gross floor area of not less than 150 square feet for the first occupant and 100 square feet for each additional resident. In addition, each room occupied for sleeping purposes must contain at least 70 square feet of floor space, and those sleeping rooms for two or more must contain at least 50 square feet for each sleeper. Excluded from consideration as sleeping rooms are halls, bathrooms, stairs, kitchens, laundry, and closet or storage areas. This recitation resembles that of the Uniform Housing Code, § 503.2. Under the Diaz standard, a large two-bedroom apartment with one bedroom of 150 square feet and another of 110 might accommodate as many as seven people if the living/dining room areas were of sufficient size to permit sleeping.
11. According to the Diaz memo, this requires the owner to show a business "necessity," with no less discriminatory alternative.
12. 42 U.S.C.A. § 3607(b)(1) (West Supp. 1995).
13. See Diaz Memorandum, supra note 2, n.1. The Keating memo does not even concur that such facially discriminatory practices would violate the Act. See Keating memo, supra note 1, at 4.
14. See UHC, § 503.2.
15. See Memorandum from Elizabeth K. Julian, supra note 3.
16. Amendment No. 2803 to H.R. 2099, approved by voice vote on the Senate floor on September 27, 1995, 141 CONG. REC. S14386 (Sept. 27, 1995).