BiggerPockets

Its a zoning issue. You need to have a look at the city zoning map and the descriptions of the different categories. In the particular city where I've looked (college town), you would need to be in an area with RH zoning to do this. There are a number of blocks near the campus that are zoned this way. Further away are RL or RM zonings, which allow only two unrelated persons in a property. The exact naming varies from place to place, but the concepts are similar.

You might be able to find this online. If not, call the city planning department. I've found them to be very helpful and not at all confrontational. Tell them what you want to do and the address and ask if there are any issues.

All that said, there are exceptions. Sometimes properties are grandfathered or otherwise allowed a variance to the current zoning. Again, the planning department can help you out.

As REI said, check your local laws. Or, more specifically, your building codes, zoning information, and landlord tenant laws. Possibly health dept. regulations. In many locales the number of occupants is determined by the total number of square feet in the unit, and they only " count" certain rooms. And the rooms must have a minimum ceiling height. And in addition, it is not uncommon to have a requirement, for example, that a " bedroom" consists of a minimum of 100 sf, plus it must have a closet. And some locales, as well as certain privatized military housing, have complicated formulas regarding the ages/sex of minors that can share the same bedroom with other minors and/or adults.

Nothing to do with leases here. You could have two or six or whatever unrelated people on the same lease or separate leases. Wouldn't matter. For student housing, like OracleofMN was discussing, I've seen it done both ways. How you do it is up to you as the landlord.

The number of people living in one house or apartment may be limited by local zoning. Its very common in " low density residential" zoning areas to have a limit that says no more than two unrelated people. So two roommates is fine but three or more is not. The number of leases is irrelevant. But a married couple with three kids is OK. Three brothers would be OK, too.

Sometimes there are limits based on bedrooms, such as max two people per bedroom.

The only way to know is to check with your local planning and zoning department.

Now, a landlord can impose additional limitations, if desired, as long as these don't violate fair housing guidelines.

I think there are multiple reasons. One is parking. A couple and kids probably have one or two cars. At least until the kids get old enough to drive. Six roommates may well have six cars. Another is the " style" of housing Single family residences are intended for a single family. A bunch of college students in a house brings a very different tone to a house, as described in other threads. So, I guess you're right about the overpopulation.