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Mrs. Murphy Housing Legislation

LWVCO  | Published on 5/10/2021

What Is the Mrs. Murphy Exemption and Why Is It Part of Colorado’s Housing Legislation?


Submitted By Shary Templeton, Legislative Committee Co-Chair

Kathy Smith of League of Women Voters Colorado writes the following housing information on the LWVCO website. It has been shortened here for our purposes.


Colorado, and other states, inherited something called the “Mrs. Murphy Exemption” from federal housing laws. The federal exemption provides that, if a dwelling has four or fewer rental units and the owner lives in one of those units, then that dwelling is exempt from the Fair Housing Act. Mrs. Murphy is a fictitious character created prior to the 1964 Civil Rights Act (Walsh, 1999).


This exemption has been used as a defense in housing discrimination lawsuits. Mrs. Murphy-type exemptions are finding their way into Colorado’s housing legislation. This session, there have been exemptions associated with HB21-1121(Residential Tenancy Procedures) and SB21-173 (Rights in Residential Lease Agreements) that read, "Exempt residential agreement means a residential agreement leasing a single-family home by a landlord who owns five or fewer single-family rental homes.”


Similar exemptions were included in HB20-1332(Prohibit Housing Discrimination Source of Income) and HB19-1118 (Time Period to Cure Lease Violation) and are now part of our Colorado housing law. Arguments in favor are that the new rules are cumbersome for small landlords and those five units make a distinction between personal and commercial businesses. Arguments against are that it creates confusion and produces two different sets of rules and paths to justice for tenants. Tenants in these units would have fewer protections. Implementation disproportionately impacts women, people of color, and low-income people because they tend to rent older, smaller units. According to the 2018 Rental Housing Finance Survey there are about 48.25 million rental units in the U.S., and nearly half (48%) are in properties with 1 to 4 units.


Assuming that Colorado follows these same trends, then roughly half of Colorado’s tenants likely rent from landlords who own fewer than five rental units. Therefore, with a five-unit carve-out, half of Colorado’s tenants have one set of housing rules and the other half has a different set.


Some of the heroes of the pandemic are the small landlords who were flexible and supportive of their tenants. Many small landlords and tenants will continue to experience financial burdens. Colorado offers rental assistance, mortgage assistance, and property-owner assistance (property owners can apply for rental 56789 assistance on behalf of their tenants) for those who meet the qualifications.