Current law and practice For many years, owners of public, assisted and conventional housing have relied on a two person per bedroom occupancy standard when adopting habitability policies for their units. HUD's own handbooks for its public and assisted housing programs have recognized that a two persons per bedroom occupancy standard is generally reasonable. This standard has became widely accepted by conventional providers as well.
The enactment of the federal Fair Housing Amendments Act of 1988 (the "Act"), which established a new "protected class" for families with children, raised the issue of occupancy standards. The preamble and commentary to HUD's rules and regulations implementing the Act made a number of germane comments regarding occupancy standards:
"Section 100.10 (a)(3) states that nothing in this regulation limits the applicability of any reasonable local, State or Federal restrictions on the maximum number of occupants permitted to occupy a dwelling unit."
"...(T)here is no support in the statute or its legislative history which indicates any intent on the part of Congress to provide for the development of a national occupancy code. This interpretation is consistent with Congressional reliance on and encouragement for States and localities to become active participants in the effort to promote achievement of the goal of Fair Housing."
"...(T)here is no basis to conclude that Congress intended that an owner or manager of dwelling would be unable in any way to restrict the number of occupants who could reside in a dwelling. Thus, the Department believes that in appropriate circumstances , owners and managers may develop and implement reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms and the overall size of the dwelling unit. In this regard, it must be noted that, in connection with a complaint alleging discrimination on the basis of familial status, the Department will carefully examine any such nongovernmental restriction to determine whether it operates unreasonably to limit or exclude families with children."
The explicit congressional intent to allow reasonable limits on habitation is further documented in the House Committee report on Act (the "House Report," H.R. Rep. No 711, 100th Congress 2d Session (1988)) which reads as follows:
"The provisions are not intended to limit the applicability of any reasonable local, State, or Federal restrictions on the maximum number of occupants permitted to occupy a dwelling unit. A number of jurisdictions limit the number of occupants per unit based on a minimum number of square feet in the unit or the sleeping areas of the unit. Reasonable limitations by governments would be allowed to continue, as long as they were applied to all occupants, and did not operate to discriminate on the basis of race, color, religion, sex, national origin, handicap or familial status."
The Keating memorandum
After the passage of the Act and its implementing regulations, a number of owners received complaints from tenant advocates who claimed that their occupancy standards may result in discrimination against some or all family groups protected under the Act. In 1991, Frank Keating, former General Counsel of HUD, decided to address these claims by the issuing a memorandum (the "Keating memorandum") which reaffirmed that the "Department believes that an occupancy policy of two persons in a bedroom standard, as a general rule, is reasonable under the Fair Housing Act."
The Keating memorandum noted that "the Department of Justice had advised us that this is the general policy it has incorporated in consent decrees and proposed orders." The memorandum stated that the reasonableness of any occupancy policy is rebuttable and that in reviewing these cases HUD will consider the size and number of bedrooms and other special circumstances, including age of children, configuration of unit, other physical limitations of housing, and state and local law.
Since 1991, tenant advocates have challenged the Keating memorandum claiming that its two persons per bedroom standard has disproportionately excluded families with children and, even prior to the new interim guidance issued by former General Counsel Nelson Diaz, the administration of HUD Secretary Henry Cisneros had advocated, in numerous fair housing cases, occupancy standards far exceeding the presumptively reasonable standard outlined in the Keating memorandum.
The Diaz memorandum
HUD's new interim guidance (the "Diaz memorandum') was intended to take effect immediately on July 12, 1995. The memorandum, which specifically rescinded all previous occupancy standards guidance including the Keating memorandum, was based on square footage, as opposed to persons per bedroom and referred to a model code published by the Building Officials and Code Administrators, Inc. ("BOCA code"). The BOCA code is designed to mandate fire exit and other life safety issues.
The Diaz memorandum provided that "If a housing provider ... has established maximum occupancy standards which are as broad as those provided in the current version of model code published by Building Officials and Code Administrators, a challenge to that occupancy standard as constituting discrimination on the basis of familial status will not be pursued by the Department....Compliance with this standard will provide a 'safe harbor' for housing providers."
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