          _____________

          No. 94-1600EM
          _____________

Oxford House-C, an               *
unincorporated association;      *
Oxford House, Inc., a Delaware   *
not-for-profit corporation;      *
Oxford House-W, an               *
unincorporated association;      *
Missouri Department of Mental    *
Health, Division of Alcohol &    *
Drug Abuse; Missouri Department  *
of Mental Health,                *
                                 *
           Plaintiffs-Appellees, *
                                 *
     v.                          *
                                 *
City of St. Louis, a Body        *
Corporate,                       *
                                 *
           Defendant-Appellant. *
_________________________        *    Appeals from the United States
                                 *    District Court for the Eastern
Missouri Municipal League; City *     District of Missouri.
of Columbia, Missouri; City of *
Clayton, Missouri; The National *
Fair Housing Alliance; The       *
Judge David L. Bazelon Center    *
for Mental Health Law; United    *
States of America; American      *
Civil Liberties Union, of        *
Eastern Missouri,                *
                                 *
           Amicus Curiae.        *

          _____________

          No. 94-3073EM
          _____________

Oxford House-C, an                *
unincorporated association;       *
Oxford House, Inc., a Delaware    *
not-for-profit corporation;       *
Oxford House-W, an                *
unincorporated association;       *
Missouri Department of Mental     *
Health, Division of Alcohol &     *
Drug Abuse; Missouri Department   *
of Mental Health,                *
                                 *
           Plaintiffs-Appellees, *
                                 *
     v.                          *
                                 *
City of St. Louis, a Body        *
Corporate,                       *
                                 *
           Defendant-Appellant. *
                           _____________

                    Submitted:   September 12, 1995

                       Filed: February 23, 1996
                            _____________

Before FAGG, HENLEY, and HANSEN, Circuit Judges.
                          _____________


FAGG, Circuit Judge.


     In this handicap discrimination case, we consider whether the
City of St. Louis violated the federal Fair Housing Act and
Rehabilitation Act by enforcing the City's zoning code to limit the
number of residents in two group homes for recovering substance
abusers. We conclude the City acted lawfully.


     Oxford House-C and Oxford House-W are self-supporting, self-
governing group homes for recovering alcoholics and drug addicts in
the City of St. Louis. The Oxford Houses provide a family-like
atmosphere in which the residents support and encourage each other
to remain clean and sober, and immediately expel any resident who
uses drugs or alcohol. The Missouri Department of Mental Health,
Division of Alcohol and Drug Abuse (DMH/ADA), helped establish the
Oxford Houses and provides them with technical support. The houses
also receive assistance from Oxford House, Inc., a national
organization of Oxford Houses across the country.


     Oxford House-C and Oxford House-W are located in St. Louis
neighborhoods zoned for single family dwellings. The city zoning

                                  -2-
code's definition of single family dwelling includes group homes
with eight or fewer unrelated handicapped residents. St. Louis,
Mo., Rev. Code tit. 26, § 26.20.020(A)(1) (1994).     After city
inspections revealed that more than eight recovering men were
living at each Oxford House, the City cited the houses for
violating the eight-person limit.


     Rather than applying for a variance excepting them from the
eight-person rule, the Oxford Houses, the DMH/ADA, and Oxford
House, Inc. (collectively Oxford House) brought this lawsuit
against the City, contending the City's attempt to enforce the rule
violated the Fair Housing Act, as amended, 42 U.S.C. §§ 3601-3631
(1988), section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a)
(1994), and other federal laws. The City brought a counterclaim
asking the district court to enjoin the Oxford Houses from
violating the City's ordinances. Holding the City had violated the
Fair Housing Act and the Rehabilitation Act by enforcing the eight-
member limit against the Oxford Houses, the district court enjoined
the City from using its zoning code to prevent the Oxford Houses
from operating with their existing number of residents, ten in
Oxford House-C and twelve in Oxford House-W. The district court
also denied the City's counterclaim. Oxford House-C v. City of St.
Louis, 843 F. Supp. 1556, 1584 (E.D. Mo. 1994). The City appeals.
We reverse the judgment for Oxford House, vacate the injunction,
and remand the counterclaim for further consideration.


     We first review the district court's decision that the City
violated the Fair Housing Act.     Attempting to avoid the Act's
requirements altogether, the City contends Congress exceeded its
authority under the Commerce Clause by prohibiting handicap
discrimination in the 1988 amendments to the Act. We disagree.
Congress had a rational basis for deciding that housing
discrimination against the handicapped, like other forms of housing
discrimination, has a substantial effect on interstate commerce.
See Morgan v. Secretary of Hous. & Urban Dev., 985 F.2d 1451, 1455

                               -3-
(10th Cir. 1993). We also reject the City's contention that under
42 U.S.C. § 3607(b)(1), the City's limits on the number of
unrelated people who can live together in a single family
residential zone are exempt from the Act's requirements.       The
Supreme Court recently held § 3607(b)(1) only exempts total
occupancy limits intended to prevent overcrowding in living
quarters, not ordinances like the City's that are designed to
promote the family character of a neighborhood. City of Edmonds v.
Oxford House, Inc., 115 S. Ct. 1776, 1779 (1995). In short, the
City must comply with the Act.


     The Act prohibits the City from making a dwelling unavailable
to handicapped people on the basis of their handicap. 42 U.S.C. §
3604(f)(1). In fact, the Act requires the City to make reasonable
accommodations in its generally applicable zoning ordinances when
necessary to give a handicapped person "equal opportunity to use
and enjoy a dwelling." Id. § 3604(f)(3)(B); Smith & Lee Assocs.,
Inc. v. City of Taylor, 13 F.3d 920, 924 (6th Cir. 1993). The Act
also prohibits the City from interfering with handicapped
individuals' exercise of their equal housing rights. 42 U.S.C. §
3617. The City does not contest the district court's conclusion
that the Oxford House residents are handicapped within the meaning
of the Fair Housing Act because they are recovering addicts. The
issue is whether the City has unlawfully discriminated against,
failed to accommodate, and interfered with the housing rights of
these handicapped men.


     Rather than discriminating against Oxford House residents, the
City's zoning code favors them on its face. The zoning code allows
only three unrelated, nonhandicapped people to reside together in
a single family zone, but allows group homes to have up to eight
handicapped residents.   St. Louis, Mo., Rev. Code. tit. 26, §§
26.08.160, 26.20.020(A)(1) (1994).     Oxford House's own expert
witness testified Oxford Houses with eight residents can provide
significant therapeutic benefits for their members. The district

                               -4-
court nevertheless found the City's zoning ordinances are
discriminatory because the eight-person limit would destroy the
financial viability of many Oxford Houses, and recovering addicts
need this kind of group home. Even if the eight-person rule causes
some financial hardship for Oxford Houses, however, the rule does
not violate the Fair Housing Act if the City had a rational basis
for enacting the rule. Familystyle of St. Paul, Inc. v. City of
St. Paul, 923 F.2d 91, 94 (8th Cir. 1991).


     We conclude the eight-person rule is rational. Cities have a
legitimate interest in decreasing congestion, traffic, and noise in
residential areas, and ordinances restricting the number of
unrelated people who may occupy a single family residence are
reasonably related to these legitimate goals. Village of Belle
Terre v. Boraas, 416 U.S. 1, 9 (1974). The City does not need to
assert a specific reason for choosing eight as the cut-off point,
rather than ten or twelve. "[E]very line drawn by a legislature
leaves some out that might well have been included. That exercise
of discretion, however, is a legislative, not a judicial,
function."    Id. at 8.     We conclude the City's eight-person
restriction has a rational basis and thus is valid under the Fair
Housing Act. Familystyle, 923 F.2d at 94.


     The district court found the City discriminated against the
Oxford Houses by singling them out for zoning inspections and
enforcement proceedings because of the residents' handicap. This
finding is clearly erroneous because Oxford House did not show the
City ignored zoning violations by nonhandicapped people. See Fed.
R. Civ. P. 52(a). Although Oxford House presented evidence that
the City did not take action against certain groups of more than
three unrelated, nonhandicapped people residing together in single
family zones, Oxford House did not show that these other groups
were not entitled to reside in single family zones based on the
zoning code's exception for valid pre-existing uses.      See St.
Louis, Mo., Rev. Code tit. 26, §§ 26.16.050-.060 (1994). At any

                               -5-
rate, Oxford House did not show anyone in the building inspector's
office knew of the alleged zoning violations. The parties agree
the City never received complaints about the groups Oxford House
claims were violating the zoning code.


     Having concluded Oxford House did not show the City treated
the Oxford Houses differently from any other group, we believe the
City's enforcement actions were lawful regardless of whether some
City officials harbor prejudice or unfounded fears about recovering
addicts. Because the district court found the City's actions were
motivated by bias and stereotypes, however, we will briefly discuss
the evidence of discriminatory intent.      At trial, Oxford House
presented testimony that one of the Mayor's assistants stated
Oxford Houses might cause flight from the City. Also, when Oxford
House's counsel asked the City's Zoning Administrator whether he
would want to live next door to an Oxford House, the Zoning
Administrator said no and expressed concern about transiency and
property values. We do not believe these isolated comments reveal
City officials enforced the zoning code against the Oxford Houses
because of the residents' handicap, especially considering the
Oxford Houses were plainly in violation of a valid zoning rule and
City officials have a duty to ensure compliance. Oxford House also
presented evidence that the inspectors who visited the Oxford
Houses were aware of community opposition to the houses and hoped
to discover zoning violations. Because the inspectors do not hold
policymaking positions, their conduct and remarks tell us little
about why City officials decided to take action against the Oxford
Houses. Anyway, the district court took the inspectors' actions
and comments out of context. Overall, we conclude the district
court committed clear error in finding the City enforced the zoning
code against the Oxford Houses because the residents are recovering
addicts. We find no unlawful discrimination under the Fair Housing
Act, either in the eight-person limit or in the City's enforcement
activities.


                               -6-
     Also, the City did not fail to accommodate the Oxford Houses
as the Act requires. See 42 U.S.C. § 3604(f)(3)(B). The Oxford
Houses want the City to let them operate with more than eight
residents.   The City has consistently said it cannot make an
exception to the zoning code unless the Oxford Houses apply to the
City's Board of Adjustments for a variance, see St. Louis, Mo.,
Rev. Code tit. 26, § 26.84.050(D) (1994), and the Oxford Houses
refuse to apply.     Their refusal is fatal to their reasonable
accommodation claim. The Oxford Houses must give the City a chance
to accommodate them through the City's established procedures for
adjusting the zoning code.      See United States v. Village of
Palatine, 37 F.3d 1230, 1233 (7th Cir. 1994); Oxford House, Inc. v.
City of Virginia Beach, 825 F. Supp. 1251, 1261 (E.D. Va. 1993).
The Fair Housing Act does not "insulate [the Oxford House
residents] from legitimate inquiries designed to enable local
authorities to make informed decisions on zoning issues." City of
Virginia Beach, 825 F. Supp. at 1262.   Congress did not intend for
the Act to remove handicapped people from the "normal and usual
incidents of citizenship, such as participation in the public
components of zoning decisions, to the extent that participation is
required of all citizens whether or not they are handicapped." Id.
In our view, Congress also did not intend the federal courts to act
as zoning boards by deciding fact-intensive accommodation issues in
the first instance. Id. at 1261.


     The district court decided the Oxford Houses should not have
to apply for variances because the City is certain to deny their
applications. See Village of Palatine, 37 F.3d at 1234. Oxford
House presented evidence that some neighbors of the Oxford Houses
have concerns and complaints about the houses, and that the
alderman representing the neighborhoods where the Oxford Houses are
located does not want the houses to have more than eight residents.
The record shows the Board of Adjustments has granted variances
despite opposition from neighbors and aldermen, however. Having
carefully reviewed the record, we conclude the district court

                               -7-
committed clear error in finding it would be futile for the Oxford
Houses to apply for variances. Thus, the Oxford Houses must apply
if they want the City to accommodate them. We express no opinion
about whether the Fair Housing Act would require the City to grant
variances for the Oxford Houses if they apply.


     Because the City did not unlawfully discriminate against the
Oxford House residents or refuse to accommodate them, the City did
not interfere with the residents' equal housing rights by enforcing
the eight-person rule against them, see 42 U.S.C. § 3617. Further,
because the City did not limit the number of Oxford House residents
"solely by reason of [their] disability" and the residents did not
request an exception to the eight-person limit, the City did not
violate the Rehabilitation Act. See 29 U.S.C. § 794(a); Lue v.
Moore, 43 F.3d 1203, 1206 (8th Cir. 1994). Having concluded the
City acted lawfully, we remand the City's counterclaim seeking
enforcement of its ordinances for further consideration.


     In conclusion, we reverse the judgment in favor of Oxford
House on the Fair Housing Act and Rehabilitation Act claims, vacate
the injunction prohibiting the City from enforcing its eight-person
zoning restriction against the Oxford Houses, and remand the City's
counterclaim.   Because Oxford House is no longer a prevailing
party, we also reverse the award of fees and costs to Oxford House.
42 U.S.C. § 3613(c)(2).


     A true copy.


          Attest:


               CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




                               -8-
