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I'm sure many people won't believe me...but my first year or so in college I was really frustrated with the fact that SF State didn't have greek houses, so I heard about that law, and decided to look it up. Now, i'm sure it may not be to prevent brothels or anything like that, but I found some civic code (or law or whatever it was) that DID state no more than X number of men/women with different last names could inhabit one household. Then it listed examples, including fraternity houses. So, it doesn't seem like a myth to me. At least not in San Francisco.
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