Facts

Background: The Opioid Epidemic and the Ethical Crisis in the Addiction Recovery Industry 

  • The opioid epidemic is a public health crisis in the US. More than 700,000 people have died of an opioid overdose since 1999 (CDC, 2025). There is an urgent need to destigmatize addiction and make effective treatment available in order to save lives and foster long term recovery. It is imperative to approach this topic with empathy, respect, and compassion. 
  • Well-intentioned federal laws such as the Fair Housing Act and the Americans with Disabilities Act have made it difficult to regulate residential addiction treatment providers. Combined with the Affordable Care Act, which requires health insurance companies to pay for rehabilitation services, federal legislation has led to unintended consequences and created a “Wild West” in the recovery industry, with low regulation and oversight, high profit margins and the proliferation of corruption and malpractice (NPR, 2021). 
  • A peer-reviewed national study found that many residential addiction treatment programs use misleading recruitment tactics, often admitting patients over the phone without a clinical evaluation (Beetham et al., 2021). This raises concerns about whether the patients are receiving the most appropriate care for their needs and about the ability of the programs to effectively treat their admitted patients. 
  • Marylanders have suffered the consequences of this lack of regulation and oversight over the addiction recovery industry as recently exposed in an article from the New York Times and the Banner in January 2025. Their investigation concluded that MD health authorities “barely vetted a flood of new operators and halted most in-person inspections” of addiction treatment centers.  According to the investigation, this lax approach has allowed a Baltimore-based operator to engage in unethical housing practices leading to patient overdose deaths. In relation to this case in Baltimore, 13 people have died since 2022, including a mother and her one-year-old son. 

Concern #1. For-Profit Corporations Are Exploiting Residential Zoning Loopholes 

  • Under current zoning laws, companies are allowed to buy multiple adjacent single-family homes, operate them under a single business, and still be classified as “residential.”
  • This loophole allows large, institutional-style rehab facilities to operate in neighborhoods that were never meant to accommodate them. 
  • The main purpose of these operations is to provide treatment rather than housing.

Concern #2. Potential Disruptions to Patients and Community 

  • FOIA (Freedom of Information Act) data requests regarding police dispatches to residential drug rehab facilities show a pattern of service codes such as emergency evaluations, disruptive behavior, and overdose/poisoning.
    • “An emergency evaluation is a way to get a person who presents a danger to the life or safety of themselves or others to an emergency room to be examined.” (MD Courts, 2025) 
  • The recurrent need for police presence and the occurrence of overdoses in some of these facilities raises questions about the operators’ ability to provide effective treatment and ensure patients’ safety. 
  • Allowing facilities to cluster in residential neighborhoods and failing to properly regulate them is likely to increase these potential problems for patients and communities. 

Community Integration, Not Institutional Clustering 

  • It is absolutely necessary to have high-quality, ethical rehabilitation centers—but this should not mean turning residential streets into institutional campuses. 
  • The Fair Housing Act and Americans with Disabilities Act were meant to support residential  integration, not justify the clustering of institutional care under the guise of housing rights. 

Regulating within the Boundaries of the Fair Housing Act is Possible 

  • The federal Dept. of Housing and Urban Development and the federal Dept. of Justice issued a joint statement on state and local land use laws and practices and application of the Fair Housing Act. 
    • A reflection on the Joint Statement by the HUD and the DOJ by Congresswoman Lois Frankel, representing Florida’s 22nd District, concluded that it is possible to design anti-clustering regulation for group homes that does not conflict with the Fair Housing Act.
  • Maryland’s Attorney General wrote a letter in response to a state Senator’s question related to a similar issue, concluding that counties can impose occupancy limits to group homes to preserve the zoning scheme.

Precedent Exists—Other Cities Have Taken Action 

  • Costa Mesa, Mission Viejo, Fountain Valley, and Laguna Niguel in California have all enacted ordinances regulating sober living and group homes. In California, cities are coordinating their efforts through the California Sober Living and Recovery Task Force. 
  • Many of these cities now require special use permits, minimum separation distances between facilities, and community oversight. 
  • In 2025, the Ninth Circuit Court of Appeals upheld Costa Mesa’s ordinance, affirming the right of local governments to impose distancing rules on group homes to prevent the creation of service campuses and protect people with disabilities from being placed in living environments that resemble institutional living, which the ADA and FHA were designed to provide relief from. See the Court’s Opinion.

Proposed Solutions

In the zoning and health codes, clarify the difference between different types of addiction treatment services that have a residential component depending on whether their main purpose is to provide treatment or to provide housing. This will prevent regulatory loopholes that put patients at risk and produce undue noise and traffic in residential areas.

Require a minimum distance between Residential Care Facilities to prevent recreating the segregated environments for people with disabilities that the Fair Housing Act sought to prevent. Exempt residential care facilities from being considered as residential homes if multiple nearby homes are used for recovery and share the same owner, manager, programs, or services.

Ensure transparent reporting and oversight of congregate living operations. There is an urgent need to increase and clarify regulations over the different components of the addiction treatment industry in Maryland, and increase inspection frequency and accountability mechanisms to ensure patients receive safe and effective services.

References

Bebinger, M. (2021, February 15). As addiction deaths surge, profit-driven rehab industry faces severe ethical crisis. NPR. https://www.npr.org/2021/02/15/963700736/as-addiction-deaths-surge-profit-driven-rehab-industry-faces-severe-ethical-cris

Beetham, T., Saloner, B., Gaye, M., Wakeman, S. E., Frank, R. G., & Barnett, M. L. (2021). Admission practices and cost of care for opioid use disorder at residential addiction treatment programs in the US. Health Affairs, 40(2), 317–325. https://doi.org/10.1377/hlthaff.2020.00378

Brantley, S. B. (2015, July 24). Letter to The Honorable John C. Astle regarding occupancy limits and protections under the ADA and FHA. Office of the Attorney General, State of Maryland.

California Sober Living and Recovery Task Force. (2025). Sober Living Task Force: Collaborative solutions for recovery housing in California. https://www.soberlivingtaskforce.com/

Centers for Disease Control and Prevention. (2025, June 9). Understanding the opioid overdose epidemic. U.S. Department of Health & Human Services. https://www.cdc.gov/overdose-prevention/about/understanding-the-opioid-overdose-epidemic.html

City of Laguna Niguel. (2025). Sober living homes: Local regulations, enforcement, and legislative advocacy. https://www.cityoflagunaniguel.org/804/Sober-Living-Homes

Fenton, J. (2024, December 20). Baltimore’s overdose crisis exposes gaps in drug treatment system. The New York Times. https://www.nytimes.com/2024/12/20/us/baltimore-overdoses-drug-treatment.html

Lurie, J. (2019,). “Mom, when they look at me, they see dollar signs”. Mother Jones. https://www.motherjones.com/criminal-justice/2019/02/opioid-epidemic-rehab-recruiters

Maryland Judiciary. (2025). Emergency evaluations: Petition process and legal standards. District Court of Maryland. https://www.mdcourts.gov/district/emergencyevaluations#what

Miller, L., & Wilson, S. (2024, May 15). Derwood neighbors resist addiction treatment facility. WUSA9. https://www.wusa9.com/article/news/local/maryland/community-at-odds-over-presence-of-drug-and-rehab-facility-derwood-maryland/65-f79ffccd-bd98-43d3-83c3-a1e6c761b9a7

Money, L. (2024, February 9). Fountain Valley passes ordinance to regulate sober living homes. Los Angeles Times. https://www.latimes.com/socal/daily-pilot/news/story/2024-02-09/fountain-valley-passes-ordinance-to-regulate-sober-living-homes

Money, L. (2024, December 5). Costa Mesa notches win in sober living home battle as 9th Circuit rejects Ohio House. Los Angeles Times. https://www.latimes.com/socal/daily-pilot/news/story/2024-12-05/costa-mesa-notches-win-in-sober-living-home-battle-as-9th-circuit-rejects-ohio-house

Money, L. (2025, March 27). Mission Viejo group challenges sober living homes amid zoning tensions. Los Angeles Times. https://www.latimes.com/socal/daily-pilot/entertainment/story/2025-03-27/mission-viejo-group-and-sober-living-homes

Office of Congresswoman Lois Frankel (2016). Summary of key points in new joint statement: State and local land use laws and the Fair Housing Act. https://frankel.house.gov/uploadedfiles/summary_of_key_points.pdf

United States Court of Appeals for the Ninth Circuit. (2025, April 24). The Ohio House, LLC v. City of Costa Mesa, et al., No. 22-56181. https://law.justia.com/cases/federal/appellate-courts/ca9/22-56181/22-56181-2025-04-24.html

United States Department of Justice & U.S. Department of Housing and Urban Development. (2016). Joint statement on state and local land use laws and practices and the application of the Fair Housing Act. https://www.justice.gov/opa/file/909906/dl