Is It Time To Ditch the Keating Memo?

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In March of 1991, counsel to the US Department of Housing and Urban Development (“HUD”) Frank Keating sent an inter-office memo to the HUD offices throughout the country. In it he spoke about landlord-defined occupancy limits on housing and their relation to fair housing law violations. The letter, now referred to as the “Keating Memo” within real estate industry, stated that a landlord-enforced maximum of 2 occupants per bedroom would be considered acceptable and non-discriminatory. However, that number was one of several factors cited by Keating as things HUD inspectors must examine before delivering opinions on whether or not discrimination has occurred.

7 years later in December of 1998, HUD took steps to make the Keating Memo official, going on record confirming that its provisions had been adopted as a nationwide standard. It remains the only law pertaining to occupancy limits in rental housing that’s applicable nationwide. Individual states and cities have enacted their own laws that override the Keating Memo, but for Chicago renters there is nothing but HUD along with some details buried in the building code about the minimum acceptable square footage per person for residences and bedrooms. As we approach the 20th anniversary of the official adoption of the Keating Memo this year, it’s our position here at RentConfident that it’s time for the policy to be reassessed and rewritten for the 21st century. Read on if you want to know why.

HUD vs the Census

The US Census Bureau considers housing to be “crowded” if the occupant to bedroom ratio is greater than 1:1. If the occupant to bedroom ratio is greater than 1.5 to 1, it’s considered to be “severely crowded.” This benchmark exists as a health and safety precaution of interest to such parties as the CDC and healthcare organizations, as has been the case since the late 19th century when the Victorians started to move away from the shared family bed. Crowded housing is tracked also as an indicator of poverty. A few weeks ago in our article about rent-to-own furniture I referred to the census bureau’s “hardship index” – a scale from 0 to 100 using a combination of factors to determine how hard it is to get by in a given area. Included in that combination of factors is crowded housing. Fortunately this means that it’s a factor that’s been tracked by the Census going way, way back.

In case you don’t want to read through that mass of ASCII, here’s a summary of the percentage of “crowded” housing in Illinois as recorded by the census bureau every 10 years going back to 1940:

  • 1940: 15.2%
  • 1950: 12.8%
  • 1960: 10%
  • 1970: 7.8%
  • 1980: 4.2%
  • 1990: 4%
  • 2000: 4.8%
  • 2010: 2.5%

(Note that the 2010 numbers are not included on the page we linked above. We pulled them from American Community Survey 5 year estimates.)

Looks like we should perhaps be grouping bunk beds together with rotary phones and other similar technology that is vanishing from the modern landscape.

So the Census and the CDC consider overcrowded housing to be a health violation and an indicator of hardship, but HUD considers it to be acceptable living conditions and partial proof that a landlord is not discriminating against families. Over the past 7 decades we’ve seen shared bedrooms go from being relatively common in this state to almost completely eliminated as an acceptable arrangement, with the exception of couples and advocates of “co-sleeping.” By defining acceptable housing for renters at a different standard than everyone else, HUD implies that it’s fine with them for renters to live in conditions that are considered hazardous by the rest of the government and socially unacceptable by most of modern society.

Rules and Guidelines

The Keating Memo is not law. It was never meant to be a law. It was the early 1990’s equivalent of an email from an attorney to the inspectors in his office giving them rough instructions on how to handle cases where landlords were accused of discriminating against families. Somehow between then and now it has blown up into something that’s seen by the public as an absolute rule. Landlords will cite “2 people per bedroom” reflexively when asked about maximum occupancy without having any clue where that number came from, or for that matter who Keating was. Tenants who hear a landlord cite any other number but two will immediately leap to the conclusion that they have grounds for a fair housing lawsuit even if there are other extenuating circumstances, such as the apartment being really really small.

It is the absence of any actual law on the books firmly defining boundaries beyond which discrimination against families has “officially” occurred that has led the Keating Memo to be seen as such a hard and fast rule. There are no other protected classes with similar objective definitions of when the line has been crossed. You do not see a law on the books stating that it’s OK to turn down an application from someone who’s only been in the country for 60 days as opposed to 90 days. Followers of a given religion get the same protections whether they go to church every day or just on major holy days. But it’s totally fine for a landlord (in certain situations) to turn down a family of five for a two bedroom apartment, then turn around and give it to a family of four.

We understand that an open memo from an attorney to the employees of a government organization carries more weight than, say, an email from your boss about wearing shorts on “Casual Friday.” However, we feel that the veneration of the Keating Memo is a completely nonsensical anomaly that could be most easily solved by removing it from modern use.

A Crutch and a Weapon

The actual text of the Keating Memo (PDF) is 6 pages long. Chances are good that if a landlord has even heard of the Keating Memo, it’s most likely that they’ve read up to the 2nd page where the see “two people per bedroom” and then put the document down never to return again. They (and everyone else but HUD employees and attorneys) miss the rest of the document, which defines all the other criteria that HUD can use in investigating a family discrimination case.

  • Ages of the children
  • Configuration of the unit
  • Other physical limitations of the housing, such as plumbing and elevators.
  • State and local laws
  • Things the landlord says to tenants regarding children

A large number of fair housing lawsuits based around familial status protections involve landlords who thought they were safe citing the 2 person per bedroom guideline and nothing else. Sometimes the courts agree with them. Sometimes they don’t. As far as the courts are concerned, these matters are applicable on a case-by-case basis. If the landlord is clearly using the number as a way to keep families out, they’re probably going to lose the case. If they’re using it to clearly protect their investment from abuse and health problems rather than to keep out people with children, they may have a chance at winning.

If the memo is to be retained as policy, that “two person per bedroom” bit should either be moved to the end of the document so people have to read through everything else first, or removed entirely so landlords can’t abuse it to justify discriminatory practices.

Disparate Impact is a Thing Now

In 2015, the Supreme Court came out with a decision stating that fair housing policies of any origin which have a “disparate impact” on different social groups could be challenged in courts under the Fair Housing Act, regardless of their intent. This means that if something like a zoning policy designed to encourage diversification of a city actually has the effect of further segregating it, it can be challenged and found unlawful in court.

Looking at how the crowded housing percentages have fallen off over the past 7 decades, it becomes very clear that the majority of “occupants” who are likely to be sleeping two or more to a bedroom are children and dating/married couples. While we have seen some housing for shift workers such as med students or laborers where far more than 2 people were sharing bedrooms in shifts, they were few and far between and restricted to very extreme circumstances. There is no denying that the Keating Memo is mostly applied when families are involved. It even says in the introductory paragraphs that it was written to address the needs of families with children with regard to the fair housing act.

Supposing that four med students were to apply for a two bedroom apartment. The landlord might possibly mention the two people per bedroom rule, but the idea that those students might have significant others join them wouldn’t really be an issue. However, if a pregnant mom with three kids were to apply for that same apartment, you’d better believe that “two people per bedroom” would be coming out of that landlord’s mouth at some point during the showing. They’d be doing Google searches and consulting with an attorney to find out if it’s OK to ask them to move when the baby arrives. There is no doubt that the Keating Memo is by its very nature a policy with a disparate impact on a particular protected class. As such it’s ripe for a courtroom challenge.

Of course the question remains of whether someone would really want to bring such a suit against Ben Carson’s HUD. But the capability of the current officeholders, or lack thereof, does not change the status of the Keating Memo as potentially harmful and certainly out of place in 2018.

Architecture has Changed

A few months back we ran a long discussion in this blog about collectivist and individualist cultures and the disconnect between 21st century American individualism as it washes up against early 20th century collectivist architecture. Short version: our bedrooms are getting bigger, our common areas are getting smaller.

The Chicago existing buildings code defines acceptable space requirements as a minimum of 125 square feet for the first two occupants, plus 100 square feet for the next two, plus 75 square feet for any additional occupants beyond the first four. It also defines the minimum square footage for sleeping areas as 70 square feet for one person, plus an additional 50 square feet per adult or 35 square feet for children under the age of 12. A full size mattress, widely considered these days to be the minimum healthy size for an adult, takes up about 27 square feet. The Chicago code also grandfathers in smaller sleeping arrangements in buildings that predate the modern laws.

As far as we can tell, this section of the Chicago existing buildings code dates back to at least 1989, roughly the same period as the Keating Memo. Stuff was a lot smaller then. Most people these days would look at a 70 square foot bedroom and think it’s a nice walk in closet. Most modern studio apartments, designed for single occupancy, are at least 300 square feet, and those are considered on the small side. Even single-wide one bedroom trailers and RVs have bedrooms that are at least 170 square feet. A modern bedroom can comfortably sleep far more then 2 kids.

While the actual memo itself allows for HUD employees to consider the configuration of the housing unit when investigating discrimination cases, in the same breath it mentions 2 per bedroom as the starting point. A rewrite could allow leeway for vintage buildings much in the same way Chicago’s code does, while removing the 2 person restrictions for modern construction.


In our opinion, the existence of the Keating Memo – or at least the “two person per bedroom” section of it – serves only to make the family status section of the Fair Housing Act more difficult to enforce. It’s largely obsolete given changing attitudes and architecture practices. It may actually be causing more harm than good. No other protected classes have such clearly defined points at which they kick in. Every fair housing case has an element of subjectivity, “gray areas” that make them unique. While the “disparate impact” ruling means that greater emphasis must be placed on the effect rather than the cause of discriminatory practices, it requires a large sample size to prove and many discrimination cases are not that wide in scope.

One must consider if things would get worse for families with kids if the Keating Memo were removed from HUD policy. Based on our experiences, anti-family discrimination in rental housing has continued to occur for the past 27 years at the same rate it as it did before Frank Keating sat down to his dictaphone. If anything the treatment of families has gotten worse. Landlords view kids as destructive forces that they are bound by law to accept into their investment property. They can turn down drunks. They can turn down pets. They can’t keep the kids out, but they’ll go to great lengths to try. The rise of the internet has allowed this view of families to spread among landlords like wildfire. Meanwhile, the two person per bedroom benchmark in the minds of tenants has prevented many of them from stepping forward to challenge landlords’ discriminatory practices. Removing it – and widely publicizing its removal – from the list of HUD policies would encourage everyone to look more closely at the other more pertinent factors involved in determining maximum occupancy.

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Kay Cleaves

Founder and owner of RentConfident. She's the primary developer of the website and research engine code. She's spent over 10 years working in the Chicago rental industry and has assisted with over 1200 leases.