How many is too many? the need for occupancy guidelines.

Most residental property managers today would probably consider themselves well-versed in fair housing laws: They take care not to exclude minorities, disabled people, or families with children from their properties. But, despite these efforts, many may unwittingly be candidates for discrimination

Consider the following scenario:

The manager of an apartment building advertises a vacancy for a two-bedroom apartment, and a family of five applies to rent the unit. After considering their application, the manager turns it down because the unit is considered too small for five people. The manager is confident that this was a fair decision because:

A. The property management firm has a policy of restricting apartment occupancy to two people per bedroom. The policy is based on experience with facility capacity and other criteria, and the firm has kept careful records over the years of its compliance with it.

B. The manager knows that the Fair Housing Amendments Act allows a firm to regulate occupancy, so long as its standards are "fair and reasonable." Furthermore the U.S. Department of Housing and Urban Development, via its General Counsel, has called a two-people-per-bedroom limit "reasonable under the Fair Housing Act."

C. The city or state in which the firm operates has in place a two-per-bedroom local occupancy code for all multifamily housing. Local rules like this will be considered acceptable housing policy under fair housing legislation.

Which of these defenses will protect this management firm from being sued for discrimination?

The answer: None of the above.

In the four years since the passage of the Fair Housing Amendments Act, the issue of occupancy guidelines - or, more accurately, the absence of such guidelines - has been a hot topic among managers of residential properties.

At the heart of the issue is the fact that, while the 1988 Act forbids managers from discriminating against families with children, it provides no guidelines for maximum occupancy by number of bedrooms or even square footage.

In fact, as many managers are discovering, the absence of either official occupancy standards or case law resulting from the settlement of discrimination claims means that there simply is no recipe for foolproof compliance with the current fair housing laws. As one observer puts it: "The current situation is like being stopped for speeding and asking the arresting officer |What is the legal speed limit?,' only to be told |I don't know. But we decided you were exceeding it, so we're arresting you.'"