Can I Set an Occupancy Limit?

Posted By: Denise Myers Education , Membership ,

Logic suggests that each additional occupant in a dwelling unit is likely to result in greater administrative burden, increased utility usage, more wear and tear on the property, and greater demands for parking. For these reasons and others, housing providers and local governments alike have created policies to limit the number of people living in residential housing units. Over the years, this practice has become challenged under the law.

Since familial status became a protected class in 1974, it became understood that unreasonably low occupancy limits can have a discriminatory effect on families. In 1991 HUD’s general counsel, Frank Keating, provided internal guidance to regional counsel to facilitate their review of fair housing cases regarding occupancy policies and familial status. The guidance document makes it clear that the federal government would not provide any safe harbor occupancy standard that housing providers could reference. Only 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.”1 In other words, housing providers could come up with “reasonable” limits, but there would be no safe harbor protection in a fair housing case… unless the occupancy limit was based on a local statue or building code.

To avoid the risk of discriminating against families, many policies specifically limited “unrelated” occupants only. As commonly accepted definitions of “family” become more diverse, enforcement of these policies can have a discriminatory effect upon other protected groups. Again, the only real safe harbor for setting an occupancy limit, is if it is based on a local statue or building code. Cities such as Bellevue, Edmonds and many others, imposed limits on unrelated occupants taking the risk out of housing providers hands. If defending a fair housing complaint related to the occupancy limit, a housing provider could simply refer to the city law.

As the housing shortage grows, more unrelated adults want to share housing and the Washington State legislature has come to their defense. Senate Bill 5235, effective July 25, 2021, removed “barriers and restrictions on the number of unrelated occupants permitted to live together, which will provide additional affordable housing options.” This means that city codes limiting unrelated occupants in dwelling units are now illegal under RCW 35A.21.314. Cities such as Edmonds and Bellevue have already removed existing codes that imposed such limits. But what does this mean for housing provider policies?

While it is still legal for a housing provider to set and enforce “reasonable” occupancy limits, the only safe harbor occupancy limit in Washington State is based on building code, such as septic system capacity. Best practice is to have a reasonable occupancy guideline that is based on legitimate business concerns, keeping in mind that any number of specific circumstances could turn an unreasonable number of occupants into reasonable. Examples provided in the “Keating Memo” suggest that in most cases, a reasonable starting point may be two occupants per bedroom plus one. However, the housing provider should be flexible based on the specific circumstances of the applicant and their desired housing unit. For example, you may have an occupancy limit of five people in a two bedroom, but what if a couple has four children under the age of five and the large apartment has plenty of room for all of them?

Seattle's Roommate Ordinance (SMC 7.24.031) requires that tenants, a tenant's immediate family, an additional resident who is not a member of the tenant's immediate family, and the additional resident's immediate family may reside in a rental unit, provided the total number of persons residing in the unit does not exceed occupancy limits established by federal, state, or local law. The safest course of action is to only advertise and strictly enforce your occupancy policy if it is based on building code, like a septic system approved for a limited number of occupants. For a quick summary of these best practices, go to RHAwa.org/support-center and search for “Occupancy Limits.”

1Frank R Keating, “Memorandum for All General Counsel, Fair Housing Enforcement Policy: Occupancy Cases,” Department of Housing and Urban Development (Department of Housing and Urban Development, December 22, 1998), hud.gov/sites/documents/DOC_7780.PDF.