Clarifying the federal Fair Housing Act's exemption for reasonable occupancy restrictions.

• Author: Iglesias, Tim

What is crowded to some is exactly what is comfortable to others; what is comfortable to some is exactly what is lonely to others. (1)

My house is open to my relatives. I give them a helping hand. (2)

It's a public health and safety issue. (3)

INTRODUCTION: LIVING CLOSELY AND THE REGULATION OF "OVERCROWDING"

This article argues that a deceptively simple "exemption" to the 1988 Fair Housing Act Amendments (FHAA) for "reasonable" governmental occupancy standards has been misinterpreted by numerous courts, particularly by the Sixth Circuit in Affordable Housing Advocates v. City of Richmond Heights. (4) This misinterpretation undercuts the protection from housing discrimination that the FHAA provides for families, especially families of color. This article sorts through the confusion about the "exemption" and offers two plausible versions of a "reasonable" standard.

Large families and extended families living closely together in a single-family house or apartment unit have been a widespread and longstanding practice in the United States. (5) Choosing to live all together makes financial sense for many low-income workers and their families. There is also clear evidence that many households living closely do so based upon enduring cultural preferences and non-economic interests. (6) In short, living closely produces substantial economic, psychological, and social benefits for many households. (7)

On the other hand, too many people sharing a dwelling space is characterized as "overcrowding." Commentators believe that overcrowding creates significant problems for tenants, such as inability to exit the building safely in an emergency, transmission of disease, psychological stress, as well as for neighbors such as excessive noise and traffic, and parking congestion. (8)

Since the early 1900's local governments have regulated the numbers of inhabitants of a dwelling to prevent overcrowding (9) by enforcing residential occupancy standards. (10) Residential occupancy standards are maximum limits on "internal density." By setting the minimum space required per occupant, they set the maximum number of persons who can legally occupy any given amount of space. There are many types of governmental residential occupancy standards (11) and a wide variation in standards. (12)

The primary policy justification for residential occupancy standards is protecting public health and safety. (13) Governments require both private housing providers and residents to abide by residential occupancy standards. Governments enforce occupancy standards when issuing occupancy certificates and by code enforcement actions, which are sometimes government-initiated, but are usually in response to neighbor complaints. (14)

Much is at stake in the regulation of internal density for governments, neighbors, and housing providers. In addition to protecting public health and safety, occupancy standards are one means governments use to control density and population in their jurisdictions. (15) Neighbors are generally concerned about "overcrowding" because of its expected spillover effects: excessive noise and parking and traffic congestion. (16) Private housing providers often claim their own business reasons for setting and enforcing residential occupancy standards, such as to avoid higher management costs, higher insurance costs, and extra maintenance and repair. (17)

Internal density regulation is also important to families. Residential occupancy standards can conflict with a household's desired level of internal density. For example, a family of five who would be happy to live in a one or two bedroom dwelling may be required by occupancy standards to get a dwelling of three or four bedrooms. (18) In many cities the stock of three bedroom apartments and larger is small. (19) Often larger detached homes are in old, run down urban areas. (20) Residential occupancy standards may severely restrict families' housing choices in many cities and suburbs.

Latino and Asian families are disproportionately and adversely affected by residential occupancy standards because they tend to have larger households (because of more children and extended families) as well as stronger preferences for living closely. (21) Occupancy restrictions limit the housing opportunities for these families (22) and increase racial and economic residential segregation by restricting which jurisdictions and neighborhoods where they may live. (23) They also force many families to purchase more space than they feel they need. (24) Even apparently small changes in occupancy standards can have significant effects on the housing available to families. (25)

When Congress included "familial status" as a newly protected class for the first time in the 1988 federal Fair Housing Acts Amendments (FHAA), it recognized that families regularly suffered from housing discrimination. (26) The FHAA provides families whose housing opportunities were negatively impacted by residential occupancy standards a potential claim for housing discrimination against both governments and private housing providers. (27) The same amendments also included an exemption for "reasonable" governmental occupancy restrictions. (28) Affordable Housing Advocates v. City of Richmond Heights, decided by the Sixth Circuit in 2000, construed the exemption to give considerable leeway to governments. (30) Additionally, some courts appear ready to extend the exemption for reasonable governmental occupancy standards to private housing providers if private residential occupancy standards are consistent with governmental restrictions, in effect using the governmental exemption to provide a "safe harbor" for private housing providers. (31) In a time when the proportion of housing needed for families of color is expected to grow (32) and our national housing crisis continues unabated, (33) City of Richmond Heights' broad definition of "reasonable" together with a "safe harbor" defense threaten to undercut these families' fair housing rights. (34)

Part I recounts the adoption of the FHAA's familial status provision and the "reasonable" standard exemption. (35) In Part II, analyzes relevant case law and the legislative history to demonstrate that "reasonable" must mean "non-discriminatory." I argue that the City of Richmond Heights "reasonable" standard is wrong because it fails to incorporate this needed non-discrimination element. I suggest that a better alternative "reasonable" standard can be derived from Elliott v. City of Athens, (36) a 1992 Eleventh Circuit decision. In the process of deriving an alternative "reasonable" standard, the article confronts the conundrum caused by Congress' language in the "exemption" and its legislative history which has heretofore been ignored by the courts. Part IV offers a potential justification of the safe harbor extension and clarifies how courts should apply it. The article concludes that if courts apply the safe harbor defense, they should require private housing provider defendants to demonstrate that the governmental occupancy restrictions upon which they rely qualify for the exemption. Courts should reject the City of Richmond Heights "reasonable" standard and adopt one that comports with the exemption's language, Congress' legislative intent, and the FHAA's remedial purposes.

1. THE EXEMPTION AND THE SAVE HARBOR EXTENSION Of THE EXEMPTION

   1. The FHAA "Familial Status" Provision

      In 1968, Congress enacted the Fair Housing Act ("FHA") prohibiting housing discrimination on the basis of race, color, religion, or national origin. (37) The stated policy of the FHA is "to provide, within constitutional limitations, for fair housing throughout the United States." (38) Twenty years later, in the Fair Housing Amendments Act of 1988 ("FHAA"), Congress prohibited housing discrimination on the basis of "familial status." (39) The addition of familial status to protected classes followed extensive documentation of discrimination against families and the effects of such discrimination. (40) Congress' primary goal in enacting the familial status provision was to protect families from housing discrimination. (41) It also sought to address the use of familial discrimination as a subtle form of racial discrimination. (42) In particular, landlords accused of racial discrimination would often contend that their refusal to rent was based upon the presence of children in the household rather than the race of the proposed occupants. (43) There was also, at least among some legislators, a concern about families' ability to afford housing. (44) Although the legislative history behind the provisions adding familial status as a protected category is not extensive, (45) the Supreme Court has recognized the FHA's "broad and inclusive" compass as a remedial statute. (46)

      The FHAA prohibits housing discrimination in housing production, sale, and finance as well as in landlord-tenant relations and zoning for its protected classes. (47) Congress recognized restrictive residential occupancy standards applied by governments and by private housing providers as one significant form of discrimination. (48)

      Restrictive residential occupancy standards may subject governments or private housing providers to liability under the FHAA's familial status provision in several ways. (49) If governments or private housing providers enforce residential occupancy standards that treat families differently from non-family households, they may be liable under a disparate treatment theory. (50) A residential occupancy standard that does not mention family status is not immune from a charge that discriminates on the basis of family status. (51) If governments or private housing providers enforce residential occupancy standards that disproportionately burden families, they may be liable under a disparate impact theory. (52)

   2. The Exemption for "Reasonable" Governmental Occupancy Standards

      During Congressional consideration of the bill that...