Make Sure Your Occupancy Standards Don't Discriminate Against Families with Children

We’ll give you six rules for avoiding liability risks when setting and enforcing occupancy standards.


We’ll give you six rules for avoiding liability risks when setting and enforcing occupancy standards.


There were no occupancy standards for phone booths back in the 1950s when cramming into these fixtures was a worldwide fad. Of course, there’s a big difference between rental housing and phone booths—aside from the fact that the latter no longer exist. Cramming people into living space is dangerous and unsanitary, not to mention hard on plumbing and other building systems. That’s why occupancy standards limiting the numbers of individuals who can live in an apartment exist.

But while they serve a vital purpose, occupancy standards can also run afoul of fair housing law prohibitions on discriminating against families with children. The basic rule is that occupancy standards are legal as long as they’re “reasonable.” It sounds so simple. Unfortunately, determining whether occupancy standards are reasonable is a highly complex question that has bedeviled landlords for decades, generating a lot of expensive litigation along the way.

Accordingly, this month’s lesson will shed light on what is perhaps the thorniest issue in all of fair housing compliance—namely, avoiding liability for discriminatory occupancy standards. First, we’ll explain the laws and existing regulatory guidance bearing on the issue. Next, we’ll show you all the different pitfalls that can get you into trouble and lay out six rules for avoiding liability risks that you can follow when establishing, codifying, and enforcing occupancy standards at your own property. Finally, you can take the Coach’s Quiz, enabling you to apply the lessons to real-life situations and determine how well you’ve learned the material.  


In 1988, Congress added family status to the list of classes protected from housing discrimination under the federal Fair Housing Act (FHA). Section 3604(a) defines discrimination as including refusal to sell, rent, or negotiate “for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of . . . familial status.”

The FHA doesn’t say anything about occupancy standards. So, what’s the problem with limiting the number of persons who can occupy a housing space? After all, the rules serve a totally legitimate purpose; and, if properly drafted, they apply to everyone, not just families with children.

The problem is that under fair housing law, rules, practices, and policies that appear neutral on their face may be discriminatory if they have the effect of excluding groups the law protects. And that’s what occupancy standards potentially do. In addition, occupancy standards that limit numbers of families or children directly violate the Section 3604(a) ban on familial status discrimination.


What “Familial Status” Means

The FHA defines “familial status” as:

  • One or more individuals under age 18 being domiciled with a parent, another person with legal custody, or a designee of a parent or person with custody; and
  • A person who’s pregnant or in the process of securing legal custody of an individual who’s under age 18.

The Reasonable Occupancy Standards Rule & the Keating Memo

In the real world, there has to be a place for legitimate occupancy standards to prevent overcrowding. That’s why the FHA allows for occupancy standards that are “reasonable.” The question is, where do you draw the line between reasonable and discriminatory occupancy standards?

In 1991, Frank Keating, the then-acting deputy secretary of the federal agency that enforces the FHA, the U.S. Department of Housing and Urban Development (HUD), issued a memo seeking to shed light on that question. The so-called Keating Memo, which remains the official HUD policy on discriminatory occupancy standards to this day, doesn’t provide an official definition but does set out important principles for determining if an occupancy standard is reasonable. General Rule: Two persons per bedroom is a reasonable policy.

This remains the unofficial starting point in assessing whether occupancy standards are reasonable. However, as we’ll discuss later, two-per-bedroom isn’t a hard-and-fast rule. It must be applied on a case-by-case basis taking other factors into consideration.  

State & Local Occupancy Standards

Many states and municipalities have adopted property maintenance codes, zoning laws, or other regulations limiting the number of occupants based on the size of the unit, with particular emphasis on the square footage of the bedrooms and living areas. Section 3607 of the FHA specifies that nothing in the law “limits the applicability of any reasonable local, State, or Federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling” (emphasis added).

As with landlord occupancy standards, HUD, the U.S. Department of Justice (DOJ), state fair housing agencies, nongovernment advocacy organizations, and individuals can challenge unreasonably restrictive occupancy limits adopted by state and local governments.

Example: A New Jersey beach town restricted occupancy of some beach properties to as few as one person per bedroom, while exempting houses of wealthy white people so they could profit on seasonal rentals to families. HUD and the DOJ sued, claiming the occupancy limit unreasonably excluded families with children. Just before trial was to begin, the town agreed to lift the ordinance and pay $75,000 to settle the claims [United States v. City of Wildwood, C.A. No. 94CC1126 (D. N.J.)]


The IPMC Minimum Area Requirements

Many states and municipalities have adopted the occupancy standard principles set out in the International Property Maintenance Code IPMC). Under the IPMC standards, which may also apply in states and towns without official occupancy limits:

  • All bedrooms with one person should have at least 70 square feet;
  • Shared bedrooms must have at least 50 square feet per person; and
  • Kitchens and other non-habitable rooms can’t be used as bedrooms.

In addition, every unit must have an overall occupant limitation based on its overall size, as summarized by this chart:

2015 IPMC Minimum Area Requirements by Square Footage (SF)


1 to 2 occupants

3 to 5 occupants

6 or more occupants

Living room

120 SF

120 SF

150 SF

Dining room

No requirement

80 SF

100 SF


50 SF per occupant (minimum of 70 SF for a bedroom for 1 occupant)




As always, the key compliance challenge for landlords is figuring out how to apply these legal principles to everyday operations. In the context of occupancy standards, the challenge unfolds in three phases:

  • Establishing reasonable occupancy standards for your own apartments (Rules 1–3);
  • Properly drafting the occupancy standards you adopt (Rule 4); and
  • Avoiding pitfalls in applying and enforcing your occupancy standards (Rules 5–6).  

Rule #1: Two-Per-Bedroom Isn’t Automatic

According to attorneys, the most common mistake landlords make with occupancy standards is applying the two-person-per-bedroom rule on a blanket basis. While it is the starting point for the analysis, the Keating Memo two-per-bedroom standard isn’t an official regulation but an internal guideline instructing HUD investigators how to enforce the legal ban against discriminatory occupancy standards. It’s critical to keep in mind that the “reasonableness” of a particular occupancy standard depends on the specific situation. Thus, two-per-bedroom may be too restrictive for some situations and not restrictive enough for others.   

Example: A Connecticut landlord forced a married couple to move out of their one-bedroom apartment after the wife gave birth, claiming they violated the community’s two-per-bedroom occupancy standard. I just followed the Keating Memo, the landlord claimed. But the court didn’t buy it, noting that Keating is a “totality” test that the landlord applied as a blanket rule without considering the other factors the memo cites, like the size and sleeping area of the bedrooms [Gashi v. Grubb & Ellis Property Management Servs., 801 F. Supp. 2d 12 (D. Conn. 2011)].   

Compliance Strategy: Don’t establish blanket occupancy standards. Instead, determine the appropriate number of occupants for each unit based on the factors set out in the Keating Memo, which we’ll explain in Rules 2 and 3 below. If you do the evaluation objectively and on the basis of the Keating factors, all identical apartments should end up having the same occupancy standard.  

Rule #2: Factor in State & Local Occupancy Requirements

As a general rule, your occupancy standards should be reasonable if they follow the requirements of your state or town (or the IPMC, if your state or town doesn’t have specific occupancy limits). But following state and local limits won’t insulate you from FHA liability if those limits are unreasonable, like the one-person-per-bedroom ordnance in the City of Wildwood case we discussed above.

Compliance Strategy: Adhering to state and local codes won’t guarantee compliance, but adopting stricter occupancy standards—for example, one per bedroom in a town with a two-per-bedroom standard—will raise a red flag and put you and your attorneys in a tricky spot. So, don’t be more restrictive unless you’re 100 percent sure that you can justify the stricter standard on the basis of the other Keating Memo factors.   

Rule #3: Consider the Other Keating Memo Factors

According to the Keating Memo, whether two-per-bedroom or any other occupancy standard is reasonable for a particular unit depends on other factors bearing on how many people can occupy it in safe and habitable conditions, including:  

How big the bedrooms are: For example, rejecting a family of five for a two-bedroom apartment might be unreasonable if at least one of the bedrooms is large enough to accommodate three persons. By the same token, it may be justifiable to refuse to rent a two-bedroom unit to a family of four if one of the bedrooms is too small for two people to share safely and in habitable conditions.

The size and configuration of the apartment: Consider the unit’s overall size and configuration, including other rooms or spaces that can be used as bedrooms. For example, two-per-bedroom may be too restrictive for an apartment with a den that can be easily converted into a bedroom, but it may also be not restrictive enough for an apartment that doesn’t have at least the minimum living or dining room space per occupant required by IPMC standards. Also remember that the IPMC bans use of kitchens and other non-habitable rooms as bedrooms.

Physical limitations on the property or building systems: In addition to bedroom and overall size and configuration, the Keating Memo instructs HUD investigators to consider the age and condition of the building, including the capacity of water, sewer, sanitation, electrical, HVAC, and other critical building systems. Thus, for example, occupancy standards of less than two-per-bedroom may be justifiable for older buildings with crumbling and fragile infrastructure.

Consider the age of children: Occupancy standards are typically based on the premise that occupants can share bedrooms. However, the age of the child(ren) may challenge the basis of that premise. For example, suppose a couple wants to share a one-bedroom apartment with their child in violation of the landlord’s two-per-bedroom standard (absent other factors):

  • Child is a newborn or infant: Rejecting the couple would probably be unreasonable;
  • Child is a teenager: Rejecting the couple would likely be reasonable.

Compliance Strategy: Age doesn’t come into play in determining whether children of different sexes can share a bedroom. The Rule: Whatever your moral views, you can’t require male and female children to have separate bedrooms, regardless of their age. Period.

Rule #4: Limit People, Not Children

When you do decide on what you think is a reasonable occupancy standard, put it into writing using nondiscriminatory language that limits the number of people rather than the number of children who can occupy a unit. According to the Keating Memo, “an occupancy policy which limits the number of children per unit is less likely to be reasonable than one which limits the number of people per unit.”

Explanation: The FHA bans advertising, language, or interaction that implies that children aren’t welcome or are restricted in some way. While occupancy standards that apply to people are at least neutral on their face, those limiting the numbers of children are a form of direct discrimination that puts you at increased risk of liability.

Example: HUD accused Idaho owners of refusing to lease their 2,600 square foot, four-bedroom rental home to a married couple because they had seven minor children. Exhibit A in HUD’s case were the alleged remarks that the property manager made to the couple suggesting that the owners had a strict limit of four children for the home. The owners denied the claims. But rather than risk a trial, they ended up paying $15,000 to settle the allegations [HUD Consent Order OHA 19-JM-0110-FH-011].

Rule #5: Avoid Discriminatory Practices in Applying Your Occupancy Standards

It’s not just what occupancy standards say but also how you actually implement them that determines whether they’re reasonable. Apply your rules consistently to all persons. Thus, for example, enforcing a two-per-bedroom rule against families with children is likely to get you into hot water if you let three or more students, adult roommates, or other non-related tenants share a bedroom. The Keating Memo also lists red flags that HUD investigators look for in determining whether occupancy standards that are neutral on their face are just a pretext for excluding families with children:

  • Making discriminatory statements;
  • Adopting discriminatory rules for common areas, such as banning young children from using the pool;
  • Having a history of marketing the community as “adults only;”
  • Taking other steps to discourage children from living in at the community;
  • Limiting the total number of units that you’re willing to rent to families with children;
  • Imposing special fees, requirements, or conditions on tenants with custody of children; and
  • Locating families with children in a single area or portion of the community and other forms of steering.

Rule #6: Count Pregnant Women as One Occupant, Not Two

When enforcing your occupancy standards, keep in mind that a pregnant rental applicant or tenant counts as one occupant, not two. This is important because controversies often arise when tenants currently in compliance with the community’s occupancy standards get pregnant. Rather than a big “congratulations,” landlords all too often react to the happy news with an eviction notice. This can result in liability even if the landlord believes that it’s only following the Keating Memo two-per-bedroom guideline.   

Example: A Rhode Island landlord forced a couple to move out of their one-bedroom after their child was born because they were now in violation of the community’s two-per-bedroom policy. The state human rights agency sued the landlord for family status discrimination. The federal court granted summary judgment—that is, judgment without a trial—against the landlord. The Keating Memo standard is mere internal guidance, not a binding regulation for determining liability, the court reasoned. Moreover, two-per-bedroom doesn’t equate to reasonable when other factors allow for a more expansive occupancy standard, such as where the two-per-bedroom standard is more restrictive than the state rule. The apartment in this case was more than large enough to provide the minimum 150 square feet required for three occupants under the state’s building code [Rhode Island Commission for Human Rights v. Graul, 120 F. Supp. 3d 110 (D.R.I. 2015)].  

Compliance Strategy: Don’t seek eviction when a current tenant gets pregnant without first considering whether the family really needs a bigger unit. Document your decision and the factors you considered in making it. If you determine that the family does need to move out for exceeding occupancy restriction, give them a reasonable amount of time to find another apartment, either with you or at a different property. Best practices dictate giving them until the end of the current lease term and, in no event, less than six months. Some attorneys advise that you consider holding off for at least a year—regardless of when the lease term ends—when a child under age 1 (or even 2) joins the family, whether through birth, adoption, or some other means.

Take The Quiz Now

October 2022 Coach's Quiz