He owns a three-bedroom house. He wanted the ad to say four people maximum. I wrote him back and explained that I cannot advertise an occupancy limit like that, because the Fair Housing Act protects families with children, and a rule like "no more than four" that is more restrictive than the local housing occupancy rules is discriminatory against families with children. Based on occupancy standards, this three-bedroom home would have a limit of seven occupants.
He said he did not want more than four people living in his rental house, and if it was not going to work out, he understood.
He was not a bad guy. He was scared, and nobody had ever shown him the actual numbers.
The fear does not match the data
I manage 125 three-bedroom rentals right now. In those properties:
- The average number of people living there is 2.59
- The median is 2
- Across my whole portfolio, the average is 1.018 people per bedroom
That is one person per bedroom, on average, across hundreds of units. The seven people crammed into a three-bedroom house is not a reality in my rental portfolio, given the quality of properties we manage and the qualification standards we hold for applicants.
What the law actually says
I am not an attorney, so talk to yours before you write a policy. But here is the short version that every owner should know.
Familial status is a protected class under the Fair Housing Act. That means you cannot treat a household differently because there are children in it. Discrimination does not require intent to discriminate, so your reasons for restricting occupancy are hard to defend. I am looking at you, everybody who claims their septic system can’t handle more than three people in a house.
HUD has used a rough starting point of two people per bedroom for a long time, and it has never been a hard rule. Courts and investigators look at the size of the bedrooms, the size of the whole house, the age of the occupants, and the local occupancy code.
Locally we use the standard of two people per bedroom plus one. Anything that deviates from that would be due to the unusually large or small nature of the property. Typical three-bedroom houses would have an occupancy limit of seven.
What we do instead
Owners are almost never worried about the number of people. They are worried about wear and tear, about noise, and about people living there who aren’t on the lease. Those are fair worries, and there are legal ways to handle every one of them.
At One Focus we protect owners with the tools that hold up:
- Screening everybody 18 and older on income, rental history, and background
- A lease that names every occupant and requires approval before anyone else moves in
- A real guest policy with a time limit, so a visitor does not become a tenant
- Regular inspections, so we catch a problem at month four instead of month thirty
- Following the local occupancy code in the borough or township where your property sits
Be careful who you hire
I have been asked to break fair housing rules over every protected class in the federal act and the classes that Pennsylvania has added. Most of the time the owner does not even know what they are asking. They are repeating something they heard at a meetup or on social media.
A property manager who says yes to that request is not doing you a favor. Just because you have a property manager does not mean you are protected. That manager is your agent and what they do on the property is on your behalf. The complaint is going to name you as well as the property manager.
We see it as our job to educate and advise clients to manage and mitigate risk while maximizing profitability. One Focus Property Management manages more than 600 homes across North Central Pennsylvania. Let us take a look at yours.
