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Newport Beach battles California over group homes, claims ‘overconcentration’

October 22, 2023

Screams in the night. A gunshot. Ambulance sirens. These sounds still haunt the little neighborhood of Santa Ana Heights.

It happened in the wee hours of the morning on a warm August night in 2021, when a delirious 23-year-old (who should have been in something more like a hospital) bolted from a licensed Newport Beach detox — which sounds fancy, but is just a tract home in a residential neighborhood — and forced his way into a neighbor’s home, trying to evade the demons that plagued him. The terrified homeowner inside had a gun. In minutes, Henry Lehr was dead.

The company that runs that detox — Gratitude Lodge — has three licensed addiction treatment facilities in that little neighborhood. There’s one licensed care home for seniors. There’s a sober living home — those don’t have to be licensed by anyone — and now, a “social rehabilitation facility” has an application pending with the state to open there as well.

How much is too much? Who makes the rules? Who’s really protecting vulnerable people?

These questions arise in the latest skirmish between local governments and the state of California over the quantity and quality of mental health care — a front that may vastly expand as the state asks voters to approve $6 billion to expand treatment.

That treatment will happen in local neighborhoods. As things stand, local neighborhoods will have precious little input.

Too much?

This skirmish involves Newport Beach and the California Department of Social Services. The pending application at issue is from Pacific Coast Mental Health LLC, which seeks to operate a “social rehabilitation facility.”

Social rehabs are a new front here on the Rehab Riviera. In 2013, there were just 96 in the entire state, and only two of them were in Orange County. A decade later — after Orange County was declared the nation’s center of addiction industry fraud, and after new laws were passed to improve treatment quality — the number of addiction treatment facilities dropped and the number of social rehabs tripled, to 286, with another 34 licenses pending.

Social rehabs are expressly non-medical, just like licensed addiction treatment homes. They operate largely in tract houses, just like licensed addiction treatment homes. They can bill private insurers, just like licensed addiction treatment homes.

They say they can treat the very serious behaviors that often accompany addiction — depression, anxiety, trauma, grief, schizophrenia, bipolar disorder, suicidal ideation, psychotic disorder, personality disorder, “dual diagnosis and co-occurring disorders,” etc. — just like many licensed addiction treatment homes. But they’re not bound by the toothier laws that govern addiction treatment homes.

Why? They’re, technically at least, a different beast, licensed by different state departments. Addiction treatment facilities are licensed by the Department of Health Care Services. Social rehabs are licensed by the Department of Social Services. Their missions are, again technically, somewhat different.

Newport Beach has asked the DSS to deny a social rehab license to Pacific Coast Mental Health. Pacific Coast’s facility is within 300 feet of a Gratitude Lodge home, the city argues: Because they’re so close, the state cannot issue Pacific Coast a license without Newport Beach’s consent.

“(I)ssuance of a license to Pacific at this location violates the overall intent of the laws that prevent overconcentration,” Seimone Jurjis, Newport’s assistant city manager, wrote to DSS on Oct. 5. “When the legislature adopted Health and Safety Code Section 1502(a), the legislature specifically declared that it is ‘the policy of the state to prevent over-concentrations of residential facilities that impair the integrity of residential neighborhoods.’

“Here, there are already four existing licensed facilities in the neighborhood. Approval of another facility … will only contribute to the institutionalization of this neighborhood, negatively impacting the recovery of the residents of these facilities. … Ensuring proper spacing between similar facilities is crucial for the welfare of the individuals receiving services and for maintaining the integrity and effectiveness of the services provided.”

Incorrect, the state said.

“Thank you for relaying your agency’s concerns regarding potential overconcentration of licensed residential care facilities in Santa Ana Heights,” wrote Hao Nguyen, a bureau chief with DSS, that same day.

“While we understand the concern and support overconcentration protections afforded in statute, we also are charged with protecting the rights afforded to each community member to live in their home communities. The individuals to be served at (Pacific Coast) need care and supervision due to their disabilities and are protected from discrimination under the Americans with Disabilities Act and their housing choices are additionally protected under the Fair Housing Act.”

There’s no overconcentration problem, Nguyen continued. Gratitude Lodge is licensed by DHCS, not DSS. And DHCS facilities don’t count toward the overconcentration protections spelled out in Health and Safety Code 1520.5 are not applicable.” Neither does the elderly care home, which is licensed via a different pathway.

Doesn’t count

The “They’re licensed by different state departments so it doesn’t count” argument strikes folks living in these neighborhoods as absurd. These are businesses, they argue — businesses that often charge by the bed and have highly transient residents who can change within days or weeks.

Newport Beach Police investigate the scene where the occupant of a home shot and killed a man on Aug. 26 2021, after the man forced his way into the residence, police said. (Photo by RICHARD KOEHLER,CONTRIBUTING PHOTOGRAPHER)

Those neighbors don’t give a rat’s patootie which branch of state government licenses a facility. All these facilities mean more deliveries, more cars, more trash, more ambulances, more noise, more people.

Newport is trying not to take no for an answer.

“We acknowledge the distinction made between community care facilities and DHCS facilities,” Newport’s Jurjis wrote back to Nguyen on Oct. 9. “However, the overarching goal of the legislation is aimed at preventing overconcentration and to maintain the integrity of residential neighborhoods. It’s vital to consider the spirit of the law in making determinations related thereto.

“As we previously mentioned, there are already four licensed facilities in the neighborhood. This raises not only concerns about overconcentration, but also about the impact on the residents’ recovery process, neighborhood infrastructure, and resources…. (I)t is our opinion that the broad definition of ‘residential facility’ … encompasses DHCS facilities and is not limited to CDSS facilities. While not directly under the purview of the CDSS, the implications of such facilities in residential areas remain similar, warranting a comprehensive evaluation and reconsideration.”

Given Newport’s “strong disagreement and the potential implications for our community,” the city asked to appeal the DSS’s determination and forward the dispute to its legal counsel, “as we believe our interpretation of this legislation is correct.”

Seems like, by DSS’s logic, there could be several more DSS facilities in this neighborhood, several more senior homes, several more DHCS-licensed addiction treatment facilities, and it wouldn’t be considered over-concentration because they’re licensed by different state departments and pathways.

That can’t be right, can it?

Apparently, yes.

The California Health & Safety Code section that the city invokes refers specifically to residential facilities licensed by DSS, and only those licensed by DSS, spokesman Jason Montiel said by email.

“The City of Newport Beach appears to apply the term ‘residential facilities’ broadly and that it should be used for all types of facilities, including those licensed by DHCS, in determining the overall potential overconcentration of facilities in a given neighborhood. This interpretation … does not align with the statutory definition of ‘residential facility.’”

The Legislature specifically defined residential facilities as “any family home, group care facility, or similar facility determined by the department, for 24-hour nonmedical care of persons in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual.”

DSS may not license DSS facilities within 300 feet of one another. But they apparently can set up right next door to an addiction treatment facility licensed by DHCS, no problem.

The law does allow local governments to request license denials, Montiel said. DSS “will be examining the facts to see if there is an overconcentration violation of HSC §1520.5.”

Is a lawsuit brewing?

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News Details

Newport Beach battles California over group homes, claims ‘overconcentration’

Too much?

Doesn’t count

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