How many people can live here?

Can a Chicago landlord put a cap or a limit on the number of renters who can occupy a rental apartment?  Maybe… but, if not done right, a landlord could be jumping straight into hot water.  Generally, a landlord can set an occupancy limit, however, the landlord’s occupancy policy must be carefully crafted so that it does not violate any fair housing laws.

Wait a minute, it’s the landlord’s property after all!  Can’t a landlord just set a maximum occupancy limit of the landlord’s own choosing?  Doesn’t the landlord have free reign over the rules about who can and who can not occupy a rental property?  Nope, not really.  My readers are smart enough to know that Chicago landlords are most definitely not the kings of their castle.  The answer, like most landlord-tenant law answers, is complex and requires landlords examine and comply with admittedly complex fair housing laws.

In Chicago, we are lucky to have not one, not two, not three, but four different fair housing laws!  Most Chicago landlords are governed by the Federal Fair Housing Act, the Illinois Human Rights Act, the Cook County Human Rights Ordinance, and the Chicago Fair Housing Ordinance.  All four laws prohibit covered landlords from discriminating against any prospective tenants or actual tenants based upon “familial status” (and a number of other protected classes).

The fact is that some landlords adopt maximum occupancy rules as a way to to discriminate against prospective tenants based upon familial status.  There are landlords out there who just don’t want young children (babies) or old children (teens) or any children (large families) in their units.  There are other landlords who don’t want single women, single men, or unmarried couples in their units.  Landlords who develop occupancy limits with an eye toward excluding these protected classes (or, more recently, that tend to have a “disparate impact” upon them) are usually unlawfully discriminating based upon familial status.

“Familial status” was added to the Federal Fair Housing Act as a “protected class” in 1988.  Familial status is defined as “one or more individuals (who have not attained the age of 18 years) being domiciled with a parent or another person having legal custody of such individual or individuals; or the designee of such parent or other person having such custody, with the written permission of such parent or other person. The protections afforded against discrimination on the basis of familial status shall apply to any person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years.”  Familial status is broad and grants protections to people who are married or unmarried, pregnant or seeking to adopt a child, and who have foster, natural, or adopted children.  (There is usually an exception from the Housing for Older Persons Act of 1995 that carves out an exception from familial status discrimination for certain “senior citizen housing”.)

The general policy adopted by the Department of Housing and Urban Development is that landlords can set maximum occupancy restrictions and standards as long as those restrictions do not violate the fair housing laws.  HUD also recognizes that local governments may set occupancy restrictions for safety purposes.

In a nutshell then, a Chicago landlord can adopt a policy that imposes a realistic limit on the maximum number of renters who can occupy a rental unit provided that the landlord is not in violation of any of the fair housing laws.  At all times, the landlord is prohibited from using an occupancy policy to discriminate against any protected class.  Obviously then, there is a fine line between violating the fair housing laws based upon familial status (or some other prohibited discrimination) and setting reasonable occupancy limits.  So, where can a landlord look for guidance?  How does this work in practice?

First, many municipalities have their own occupancy standards.  The standards set in Chicago by the building code are quite high. Section 12-196-480 sets forth the space requirements for residential buildings stating:

Every family unit shall contain at least 125 square feet of floor area for each of the first two occupants, and at least 100 square feet of each of the next two occupants, and at least 75 square feet for each additional occupant. For the purpose of this section, floor area is the area within the perimeter of the space or building occupied by the family unit, not including elevators, stairs, or other shaft enclosures.

The code, in Section 13-196-490 providing rules for sleeping rooms in residential buildings goes on to say:

In every family unit and every rooming unit, every room occupied for sleeping purposes by one occupant shall contain at least 70 square feet of floor area, or if of original configuration need only comply with the regulations in effect at the time of its construction. Every room occupied for sleeping purposes by more than one occupant shall contain at least 50 square feet of floor area for each occupant 12 years of age and over and at least 35 square feet of floor area for each occupant under 12 years of age. For the purpose of this section a person under two years of age shall not be counted as an occupant.

Other municipalities may vary.  Landlords should always check with their local authorities to determine the maximum lawful occupancy for their rental units.  A landlord would never face a challenge for setting an occupancy limit equal to the occupancy limit allowed by a governmental entity.

Second, landlords can look to the rules on HUD enforcement of fair housing rules.  In 1991, the general counsel for HUD penned what has come to be known as the “Keating Memo“.  The memo was an attempt to embody HUD’s policies for enforcement of the fair housing laws in relation to occupancy standards.  Keating indicated that a general rule of two individual occupants per bedroom would usually be considered reasonable.  However, the memo dictates that the general rule was a rebuttable presumption and was not a guaranteed safe harbor.  HUD investigators would still look closely at other factors to determine if an occupancy policy was reasonable.  Some of those factors are the size and number of bedrooms and the unit, the ages of children or occupants, the configuration of the rental unit, the physical limitations of the apartment, any state and local occupancy laws, and any other factors deemed relevant.  So, the Keating Memo basically said “2 per room but look at special circumstances and 2 per room might not be a safe harbor”.  After a new HUD general counsel took over and set forth different procedures for enforcement, confusion reigned supreme.  As a result, in 1998, Congress passed a law requiring HUD to officially adopt the Keating policies as HUD policies.

So, can a landlord just say “two individuals per bedroom”?  The law seems to say… maybe.  It really depends on those other factors (is the bedroom really big? are there enough bathrooms? is the rest of the unit big enough?, etc.  Many fair housing advocates concede that a formula that usually results in a reasonable occupancy restriction is the “two plus one” formula.  That rule of thumb would have a landlord multiply the number of bedrooms in the rental unit times two and add one to determine a maximum number of individuals whop can occupy the rental unit.  There are, however, recent cases where the 2+1 standard was found to violate the Fair Housing laws.  In the end, the Chicago landlord setting an occupancy policy has the unenviable task of making a determination that is reasonable, documenting it, and then applying that policy uniformly.