As the calendar has turned to December, it is time to again review the law concerning holiday displays at apartment communities.  Management is required to balance the religious requests of all, while showing a preference to none. What might be benign to some can be perceived as offensive to others. HUD has made clear that while the Fair Housing Act (“FHA”) does not prohibit religious expression, all residents (and applicants) must be treated equally and without regard to their particular religion.
The FHA makes clear that management cannot publish any notice, statement, or advertisement with indicates a preference, limitation, or any type of discrimination based on religion. 42 U.S.C. 3604(c). Furthermore, the applicable regulations prohibit management from engaging in “inherently religious activities” when participating in any activities funded by HUD. 24 C.F.R. 5.109(c). “Inherently religious activities” include worship, religious instruction, or proselytism. 24 C.F.R. 5.109(c). To be sure, this prohibition is tempered by the qualification that these types of “inherently religious activities” may be offered separately “in time or location” from the programs, activities, or services supported by HUD funds and that participation in these programs must be voluntary for the beneficiaries of the program. 24 C.F.R. 5.109(c). As such, management is tasked to protect the rights of those residents who wish to participate in certain activities as well as the rights of those residents who are of a different faith (or those who have no religion).  
Simply banning all holiday displays is one choice — but many residents are unhappy because it seems like overkill.  Yet others may complain that their specific religion is omitted or another display is perceived to receive preferential treatment.  To solve this issue, some communities have a designated area in which holiday items from various faiths are displayed.  Additionally, there is guidance that notes references to Santa, Christmas trees and the North Pole are far enough away from religion so as to lose any prohibited inference.  Another option is to remind residents that they can absolutely permitted to decorate their interior apartments, their doors, (and if appropriate at your specific community) alcoves or areas next to their doors with more overtly religious displays.  
As management, we are looking for a policy which appropriately balances the beliefs of all while ensuring we are not perceived to favor one religion over another.  And whatever decision you make, just know that someone may not be happy about it.  Which may require you to speak with a lawyer like me.
Just A Thought.