This is a pretty stupid interpretation. Loving is the father of two of the children, and Shelltrack is the mother of all three children. Therefore, she has blood ties to all three children and can thus live with all three of them. Loving has blood ties to the two younger children and can thus live with them. The fact that he is not the father of the oldest child is irrelevant. This should take about 15 seconds for the judge to rule against the city board.
If I'm reading the ordinance correctly (and, of course, I'm basing it only on what the newspaper articles said), you can't have more than 3 people living together unless they are *all* related by blood, marriage or adoption. It doesn't seem to permit, for example, a guy and his wife and his wife's cousin and his wife's cousin's husband and his wife's cousin's husband's sister to all live together. And I think that even if the man and the woman got married, they couldn't all live together, since there's more than 3 of them and not all of them would be related by blood, marriage or adoption (the husband and the oldest boy wouldn't be related). I think that the couple would need to get married *and* the husband would need to adopt the oldest boy.