This site is for information purposes only. Originally established for a local issue in McLean, VA – it has since developed to focus not only on Newport Academy and The Carlyle Group, but hopes to build awareness of a larger, related topic:
for-profit treatment centers operating in residential zones at any scale and in any number without any oversight.
Corporate-owned, for-profit treatment facilities (many backed by private equity firms like The Carlyle Group) are moving into residential neighborhoods across the country under the guise of by-right “group homes.” Insurance companies, Federal & State Representatives, local municipalities, and local and national press are all beginning to identify and address the issue.
The FHA, ADA, and ACA
Testing the Elasticity of the Fair Housing Act
The Fair Housing Act (FHA), Titles XIII-IX of the Civil Rights Act, was signed into law by LBJ in 1968 (and updated in 1988) to help keep “protected classes” from experiencing housing discrimination. Under the Americans with Disabilities Act (ADA), signed into law by George H.W. Bush in 1990, those recovering from addiction and those suffering mental illness are lawfully categorized as disabled persons; one of several “protected classes” deservedly served by the FHA.
Add to this the Affordable Care Act (ACA) (2010), and the Mental Health Parity Act (2008), which brought a welcomed increase in access to mental and behavioral health care. With this new access to insurance-coverage for treatment, however, came a growing wave of entrepreneurs who realized enormous sums could be made in the big business of for-profit facilities treating a wide range of behavioral and mental health disabilities (e.g. drug and alcohol addiction; eating disorders; anxiety; depression; etc.) The opioid epidemic , a behavioral health crisis, is especially lucrative to those industrializing treatment.
Municipalities have been left to scramble, with zoning codes ill-equipped to limit or even put a name to this explosion of for-profit facilities and with local leaders hesitant to take on a multi-billion dollar industry claiming protections from the FHA and ADA.
Zoning ordinances, federal and state laws, and equitable access to human services are all challenged by the entry of private equity firms and corporations into the residential treatment industry.
Group homes, or “group residential facilities,” provide a much-needed service, allowing those vulnerable to discrimination access to equitable housing and support in residential settings as an alternative to institutionalized treatment options.
Group homes come in government-run, non-profit, or for-profit varieties. Not only are they permitted and protected by federal law but they are a welcome resource for any community.
There is an argument to be made, however, that corporate-owned, for-profit, short-stay treatment facilities are NOT group homes but rather businesses testing the limits of the FHA and ADA. Because of their large-scale of operations, the inpatient services they provide, and the sequestered, temporary stay of its patients, these facilities fundamentally alter the character of R-zoned neighborhoods not only to the displeasure of neighbors, but to the detriment of those seeking treatment.
Corporations & Private Equity in Residential Zones
A hot trend in private equity right now is to invest in the treatment industry (Google “Private Equity and Rehab,” and see links below to learn more). Billions are being made and there exist few barriers to scalability. If a corporation believes the market can support 10 treatment facilities on one neighborhood block, there is currently nothing in most zoning ordinances to prevent them from operating. In links below, you can read about entire cities and county’s that have become America’s “rehab capitals” thanks to clustering, a business-savvy model to maximize profits and streamline operations. This practice encourages concentrating services in one location rather than dispersing them to meet needs where they exist, e.g. in one city rather than throughout a county (McLean), or in one county rather than throughout a state (Palm Beach County, FL), or in one state rather than throughout the country (Arizona).
Clustering is just one reason large corporations and private equity firms should not be allowed to invest and operate in R-Zones without oversight. There are many others, as residents in McLean, VA are finding out.
One Town Working to Stop the Trend
Residents in McLean, VA have been working to stop the corporatization of their neighborhoods since it became public in late-March 2019 that a luxury treatment provider, doing business as Newport Academy and backed by the world’s wealthiest private equity firm, The Carlyle Group, had purchased a cluster of four homes using non-disclosure agreements with plans to operate them as by-right “group living facilities.” The “by right” and “group living” designations would have allowed the company to house and treat patients without any zoning oversight (for e.g. traffic, environmental impact, etc.)
Three of the four homes were contiguous (Davidson Rd.) and the fourth (Kurtz Rd.) was just under a mile away.
This four-house complex would have been capable of temporarily housing 32 clients for a duration of 6-10 weeks each, (roughly 166 to 277 new residents in the neighborhood each year). In addition to clients, the complex would require several dozen staff, coming and going for three shifts a day, to operate. Those numbers climb further when accounting for all the additional support coming in and out of the facilities on a daily basis: counselors, “youth mentors,” nurses, therapists, tutors & teachers, chefs, housekeepers, security, family & friends, deliveries, yoga instructors, gardeners and likely much more.
The wave of people, vehicles, and commercial activity in residential neighborhoods immediately adjacent to schools (McLean High and Franklin Sherman Elementary), a community swim club, and a public park, would undoubtedly disrupt the character of the neighborhood, threatening students on their way to and from school, putting a strain on residential roads and resources, parking, and essentially bringing commercial activity to narrow neighborhood streets already stressed by school traffic. At the three-house campus front lawns were paved over and French drain system damaged to create parking lots and to fence in the property, causing roadway flooding on one of only two roads leading into the high school. It was severe enough that school buses had to turn around:
Even one large-scale treatment facility causes problems. At the Kurtz Rd. facility, which has not yet been granted a license or begun operations, already between 6-11 cars have been parked daily at the site.
In the image above, a neighboring single family home’s kitchen window is only about ten yards away from the cars parked on the extended parking apron at the right-hand frame.
Why clusters in such tight neighborhoods (R-2 and R-3 zones)? A recent report by a local news outlet (WUSA9’s Peggy Fox, linked below) revealed that the company charges $2,000 dollars a day for treatment. With 8 patients per facility that’s nearly half a million dollars earned EACH MONTH the facility operates. Clustering allows each home to share staff and resources more easily, further maximizing already huge profits.
Initially mischaracterized as a NIMBY protest, it is now clear that McLean is standing up to an industry, not the right of group homes to exist.
Land-Use and Zoning
McLean’s residents and local leadership have had some success in pointing out land-use problems related to Newport’s proposed facilities. Because three of the homes Newport purchased were contiguous, and subsequently fenced-in as a single compound, the Fairfax County Zoning Office was asked to examine the sites and make a determination as to whether the homes constituted separate “group living facilities” or a single “Congregate Living Facility”; the former being “by right” and the latter requiring a special use permit to operate in a residential zone.
In May, 2019, upon reviewing requests for determination submitted by knowledgeable and concerned residents, the Fairfax County Zoning Office officially re-designated three of the four properties as a single Congregate Living Facility (CLF), which requires a special use permit to operate.
Newport Academy has the option to apply for this permit, as a CLF allows for short-term treatment of patients, including minors. CLF permits include, among other accountability measures, facility set back requirements and a traffic impact study. Instead, a statement was released on 5/28/2019 announcing the company’s intent to sell the three properties.
UPDATE 8/19/19: While it is hoped that Newport will uphold its word regarding its intent to sell the Davidson Rd. properties, the corporation filed an appeal of the zoning decision on 6/14/2019. A public hearing has been scheduled for 10/30/19 (starting at 9am) and citizens can register to make a statement of no more than 3 minutes. To sign up, click here, and use application number A 2019-DR-009 in the sign up form. Please keep your comments relevant to the determination letter and Newport’s appeal, which are available under the documents tab.
The McLean Citizen’s Association (MCA) has publicly issued a resolution affirming support for Leslie Johnson’s Determination and urging that a special use permit not be granted. It is unclear at this time how the MCA will respond to news of the appeal.
The fourth home, at Kurtz Rd., is in the process of obtaining a license from the Virginia Department of Behavioral and Developmental Services and is also under review for a determination. McLean residents question whether this license should be granted and have brought land uses issues to Fairfax County’s attention. To follow this topic and for ideas on how to help, please regularly visit the Kurtz Rd. Portal.
Residents vs. Short-Stay Clients
Newport Academy’s founder and CEO, Jamison Monroe, Jr., stated during a community meeting on 4/24/19 that its patients typically stay at their facilities between 6-10 weeks at a time (conveniently the amount of time most insurances will pay for mental health and addiction treatments) and could not guarantee that clients would be local members of the community.
Virginia tax law defines residency as of-age persons staying a minimum of 183 days in the state. The prospective clientele would be minors residing in facilities for only 6-10 weeks at a time, no more “residents” than children attending an out-of-town summer camp. Further, no permanent resident would reside in these facilities. They are instead operated by a staff that rotates across three shifts. While tax law cannot be cited as a binding definition for issues like zoning or licensing, it does help to illustrate that perhaps the “residential” aspect of these treatment facilities is not clear-cut.
National: These are general articles on the treatment industry boom and only tangentially relate to the issue in McLean, VA.
McLean & Fairfax County Specific:
RELATED : “Overdoses, bedsores, broken bones: What happened when a private-equity firm sought to care for society’s most vulnerable.” Washington Post article about The Carlyle Group’s ownership of The HCR ManorCare nursing-home chain in PA that went bankrupt in March.
In Fairfax County and beyond we must continue to contact our elected officials and insist that this industry be regulated; that existing zoning codes be enforced; property rights upheld; and importantly, that equitable access to human services be provided to communities through partnerships with non-profit and government-run providers.
If a market exists for luxury, for-profit, temporary-stay treatment centers (as corporate interest in the treatment industry suggests there is) – legislators at every level of government must pay attention and demand that facilities run by corporations are not bringing corporate problems to American neighborhoods. Visit the Kurtz Rd. Portal for more ways to help and to follow the local issues.
Supervisor John Foust
State Senator Barbara Favola
Delegate Rip Sullivan
Delegate Kathleen Murphy