End Residential Occupancy Limits

Residential occupancy laws, which limit the number of unrelated people who can share a dwelling, enable unjust discrimination and drive up housing costs. A growing number of cities are looking to get rid of them.

Residential occupancy limits have a long and sordid history of being used to deny housing opportunities to racial minorities and the less affluent under the guise of public health and safety. (Hyoung Chang / The Denver Post)

Imagine this. You and four friends apply to rent a three-bedroom apartment. You know it will be crowded, but it is the only safe and affordable place in your area that has enough space for all of you. You’re the only applicants, and you meet all the income criteria. But the landlord turns you away. What gives?

For many renters, this situation is all too familiar. It’s due in part to laws that limit the number of unrelated people who can live together, otherwise known as residential occupancy limits. These laws sound mundane, but they have a long and sordid history of being used to deny housing opportunities to racial minorities and the less affluent under the guise of public health and safety.

Today some landlords say they support the laws because they help reduce wear and tear on their rental properties. There are also city officials who say they like the laws because they reduce traffic.

But the tide seems to be shifting as a number of wealthy municipalities — from Boulder, Colorado, to Austin, Texas — have moved to end these occupancy limits. This is happening at a time when many cities are looking to increase their density to provide more affordable housing options and fight the impacts of climate change.

“There’s a fear involved with these laws,” said Colorado state representative Manny Rutinel, who is sponsoring legislation to prohibit occupancy limits in certain instances. “We want to be able to allow folks to feel safe in their homes, to feel like they are not breaking the law just because they are living with friends or distant family members.”

A Sordid History

Residential occupancy restrictions are a Progressive Era reform that gave cities the right to police the number of people living in each home through zoning ordinances. The reasoning behind the idea was initially to limit the spread of infectious disease, but some scholars say that was a dog whistle designed to prevent neighborhood integration.

One of the assumptions underlying occupancy limit policies is that households with lower incomes are most likely to double up with another family. Since those households are also more likely to be households of color, enforcing occupancy limits functions to maintain or exacerbate economic and racial segregation. The policies also effectively single out members of ethnic and cultural groups who are more likely to live in multigenerational households (including many Asians, Latinos, and Catholics).

The most common residential occupancy limit is the two-persons-per-bedroom standard that the Department of Housing and Urban Development set for its public housing units in the 1970s. Many cities have zoning ordinances with the same limit, although the laws tend to be more common in suburban and urban areas than in rural ones.

Tim Iglesias, professor emeritus at the University of San Francisco School of Law, argued in an article that “justifications for the two-person-per-bedroom standard are weak” and could violate federal fair housing laws. “Not only has the dominant status of the two-person-per-bedroom standard remained largely under cover, but until now no one has demonstrated its frequent discriminatory effects on families,” Iglesias wrote.

One discriminatory impact of occupancy limits is that the policy can exclude families with children from certain rental properties. Iglesias noted that families with children run afoul of occupancy limit standards at ten times the rate of households without children. He found this to be the case in forty-three states.

Beyond the law’s discriminatory impact, residential occupancy limits also restrict the available supply of affordable housing without requiring cities to build new homes. There are roughly two dozen cities in Colorado alone that have occupancy limits, including Fort Collins, Aurora, and Littleton. Each of these cities has what’s known as a “U+2” occupancy limit, meaning only three unrelated people can live in a home together.

Kimberly Carracedo, a lead organizer for New Era Colorado, a nonprofit that teaches progressive youths how to engage in the political process, told the Colorado General Assembly in January that the occupancy limit in Fort Collins was one reason it was so hard for her to find an affordable rental when she was a first-generation freshman at Colorado State University. Carracedo said she sees the same look of worry on the faces of new students when they learn the city could limit where she and her friends lived.

The laws also restrict housing opportunities for multigenerational households, especially for Colorado’s rural Latino community, according to Kayla Frawley, the director of policy at Voces Unidas, a nonprofit policy advocacy organization. Frawley said ending the use of occupancy limits would open up new housing opportunities for Latino households in Colorado at a time when more than 66 percent of those households experienced a rent increase last year, she said.

“Limited housing stock, long waiting lists, and unrealistic monthly prices for rental units regularly price working Latinos out of the market, often forcing them to live and work in different counties or requiring multiple generations and multiple families to live under one roof,” Frawley added.

End Residential Occupancy Limits

These issues are not confined to Colorado. Renters in Austin, Texas, told the city council that they faced similar challenges before the body voted in June 2023 to end its zoning-based cap on the number of unrelated people who can live together, Community Impact reported. But Austin left ordinances in place that allow the city to enforce occupancy limits for health and safety reasons.

Washington State lawmakers passed a bill in 2020 that outlawed zoning-based occupancy limits as well. The Rental Housing Association of Washington said in a blog post that the law could still be enforced through building codes like septic system loads or for public health reasons.

Ending the use of these laws has become increasingly important as many renter households face significant financial strains from high housing costs. About half of all renter households in the United States, or roughly 22.4 million households in all, are considered cost-burdened, meaning they pay more than the recommended 30 percent of their income on rent and utilities, according to January 2024 data from Harvard’s Joint Center for Housing Studies. That figure has increased by more than two million since before the pandemic began.

But expanding or eliminating occupancy limit laws has proven challenging. In 2021, Denver became one of the first cities in Colorado to increase its occupancy limit from two unrelated persons up to five. It also expanded where community corrections facilities and halfway homes could operate.

Policies that overturn residential occupancy limits have been largely supported by affordable housing advocates and tenant rights organizations. The groups argue that ending the policy is an effective way to address local affordability challenges. However, landlords and affluent residents have generally supported keeping occupancy limit policies in place. They argue that the laws keep local traffic low and improve the quality of life in single-family neighborhoods.

But the efforts to eliminate residential occupancy limits are paying off in at least some cases. For instance, Denver’s planning department told the city council in 2022 that the law resulted in a 41 percent decrease in residential complaints, Axios reported.

“By encouraging denser living arrangements, we promote a more efficient use of our housing and resources. This means reduced per capita energy, land, and water consumption and a smaller environmental footprint for our state,” Rutinel said.