Why It Matters
You can set an occupancy limit in your lease, but not arbitrarily. HUD's 2+1 guideline — two people per bedroom plus one — is the national safe harbor. Enforce it consistently and document your reasoning in writing. Apply it differently to different applicants and you're looking at a fair housing complaint for familial status discrimination.
At a Glance
- HUD safe harbor: 2 persons per bedroom plus 1 — a 2-bedroom unit allows up to 5 occupants
- State and local codes can set stricter limits based on square footage, egress, or ventilation
- Blanket "2-person max" on a 1-bedroom unit is presumptively discriminatory under HUD guidance
- Apply the same standard to every applicant — inconsistent enforcement triggers disparate treatment claims
- Familial status is a protected class — limiting families with children requires objective justification
- Building code occupancy and rental occupancy limits are separate; both apply
- STR platforms set their own caps, which can differ from local ordinances
- Many cities require landlords to post maximum occupancy visibly near the unit entrance
- Lease clauses do not override state occupancy law — know your jurisdiction
- Unauthorized occupants over the limit are addressed through lease enforcement, not automatic eviction
How It Works
The HUD 2+1 guideline is not a law — it's a safe harbor. HUD's 1998 Keating Memo says two persons per bedroom is generally reasonable but not rigid. Factors that may justify a different limit include unit size, age of the children, structural limitations, and local housing codes. A landlord applying exactly 2-per-bedroom can still face a valid fair housing complaint if the unit is large enough that the limit produces a discriminatory effect on families.
State and local codes impose their own floor. California uses a square footage minimum: 70 square feet for the first occupant, 50 for each additional. Building and fire codes can set stricter caps based on egress and ventilation. Where state law is stricter than HUD guidance, state law controls the unit's habitability standard.
Familial status protection applies directly. The Fair Housing Act bars discrimination against families with children under 18. A facially neutral policy that effectively excludes families can trigger disparate impact liability. HUD expects objective, health-and-safety justification — not a preference against children.
STR rules add another layer. Platforms set maximums tied to beds, not bedrooms. Local STR ordinances cap guestcount independently. If your city limits overnight guests to 6 and the platform allows 8, the city limit controls — violating it risks permit revocation.
Real-World Example
Kevin owned a 1-bedroom unit in Portland, Oregon and set the occupancy limit at 2 persons. A family of three applied — a couple and a toddler. Kevin denied the application, citing the 2-person cap.
Two weeks later, the family filed a complaint with HUD's Office of Fair Housing. The investigator found Kevin's unit was 780 square feet — above Oregon's minimum for three occupants. HUD found probable cause that the limit had a discriminatory effect on families with children.
Kevin's attorney negotiated a conciliation agreement: $4,800 to the applicant, mandatory fair housing training, and a revised policy allowing 3 persons for 1-bedroom units over 650 square feet. Had Kevin used the 2+1 guideline from the start, the policy would have been defensible.
The lesson: occupancy limits must reflect objective physical conditions, not a preference for smaller households.
Pros & Cons
- Clear standards protect against overcrowding that accelerates wear and raises habitability issues
- A written, consistently applied policy is the primary defense against fair housing complaints
- Building code compliance limits liability in fire or structural incidents involving excess occupants
- Documented STR caps reduce platform and permit exposure
- Overly restrictive limits — especially per-bedroom caps below HUD's guideline — create fair housing liability
- Inconsistent enforcement (allowing more occupants for some applicants) triggers disparate treatment claims
- Limits set tighter than market norms for family-sized units increase vacancy risk
- STR hosts face dual compliance (platform + local ordinance) that can produce conflicting caps
Watch Out
Blanket per-bedroom rules below 2+1 are presumptively invalid. A "1 person per bedroom" policy or a hard 2-person cap will face HUD scrutiny. Anchor limits to physical characteristics — square footage, room count, egress — not a preferred number.
Familial status protections apply at every stage. You cannot refuse to show a unit or deny an application based on the presence of children. A pattern of denying families while approving childless applicants creates disparate impact liability regardless of intent.
Unauthorized occupants require a lease-based response. The remedy for occupants exceeding the lease agreement limit is a cure-or-quit notice — not automatic eviction. Most states require a notice and cure window first.
STR platform limits and local ordinances are not the same. Rely on the local ordinance. A permit can be revoked for city rule violations even if the platform never flags the listing.
Ask an Investor
The Takeaway
Maximum occupancy is a legitimate tool when grounded in objective, unit-specific standards — square footage, bedroom count, building code requirements — and applied identically to every applicant. HUD's 2+1 guideline gives you a defensible starting point. Stricter limits require documented physical justification. The fair housing risk isn't in setting a limit — it's in setting a limit that functions as a proxy for excluding families.