Restricting density is important because overcrowding strains an association's parking, increases utility costs, overloads recreational facilities such as pools and spas, disrupts the quiet enjoyment of residents, and reduces property values. Creating reasonable restrictions on the occupancy of condominiums is within the authority of an association. Restrictions can be imposed provided they are not discriminatory.
The Federal Fair Housing Act prohibits restrictions on occupancy which discriminate on the basis of race, color, religion, national origin, sex, familial status or handicap. Occupancy restrictions cannot be an excuse to discriminate against families with children. The Department of Housing and Urban Development (HUD) has stated 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".
The Uniform Housing Code and the California Health & Safety Code both restrict the number of persons in a unit, using a formula based on bedroom square footage. In addition, some cities and counties issue their own housing occupancy standards. While opposed to discrimination, the California Department of Fair Employment and Housing (DFEH) has allowed restrictions using a "two-plus-one" formula i.e., two persons per bedroom plus one additional person for the household. For example, a 1 bedroom unit could have 3 people, a 2-bedroom could have 5 people and so on. However, some courts have questioned the use of formulas based on the number of persons per bedroom.
Coast Management of California