Affordability and Sustainability
Affordability is the biggest challenge to individuals seeking a quality recovery residence. This is typically not because the provider is making a huge profit. Actually, recovery residences face sustainability challenges because:
- Persons in recovery oftentimes do not have the financial resources to afford the level of support they need; and
- Third-Party funding policy has historically excluded recovery housing and/or prioritized other housing models.
Most recovery residence startups are funded by Angel Investors, who are often persons in recovery who want to give back. The Anti-Drug Abuse Act of 1988 established state-administered revolving loan funds that Oxford House ™ used to open new homes. While many states ‘sunsetted” this program, several have maintained it. In 2019, the federal government allowed states to use the State Opioid Response (SOR) block grants to increase recovery residence capacity.
Most recovery residences require residents to work and pay rent, which funds operational costs. Since persons in early recovery may need to work low stress initially, minimum wage “recovery jobs” recovery homes are capped as to what they can charge. Many applicants are forced to choose what they can afford rather than what would best support their recovery.
A handful of nonprofit recovery residence providers have raised enough money through donations to offer no to low-cost recovery residences to target populations.
Since clinical services are reimbursed, many providers evolved into treatment programs and/or add a treatment component to generate revenue while viewing the recovery residence as an accounting cost center. While this can be done well, there are several ethical and legal pitfalls. Before pursuing this, a provider should seek legal counsel.
There are examples of current and former government funding opportunities for recovery residences. Currently, some states are using general revenue and/or federal SOR dollars to fund recovery housing vouchers. In the past, SAMHSA’s Access-to-Recovery program could fund faith-based recovery residences, but that funding opportunity has since been retired. When providers utilize government funding, they should realize that funding policies often change over time.