The Ninth Circuit recently found that Newport Beach’s regulation of sober living homes violated the Fair Housing Act, the Americans with Disabilities Act, the California Fair Employment and Housing Act, and the Equal Protection Clause of the U.S. Constitution because the ordinance practically prohibited new group homes for recovering alcoholics and drug abusers from opening in residential neighborhoods. Pacific Shores Properties, LLC v. City of Newport Beach is an important decision for sober living home operators, neighbors of sober living homes, and local governments looking to regulate sober living homes in their communities.
Newport Beach Ordinance and Sober Living Homes in the City
Prior to 2008, group homes were allowed to freely open in Newport Beach. Group homes consist of homes for recovering alcoholics and drug abusers to live in a communal setting in order to mutually support each other’s recovery. In 2007, there were 73 group homes operating in Newport Beach – 48 were licensed treatment facilities and 25 were not licensed. In 2008, in response to widespread public outrage over the number of group homes opening in Newport Beach, the City enacted an Ordinance that practically prohibited group homes from opening in residential neighborhoods.
The Ordinance did not single out group homes for recovering alcoholics and drug abusers because it also prohibited other group living situations; however, it did not address the situation of homeowners renting out to vacationers on a weekly or other short basis. In 2007, the City had 801 outstanding short term lodging permits. In response, several sober living home operators who were required to apply for a permit sued the City.
The Ordinance distinguished group homes by defining a single housekeeping unit as having a single, written lease and that the residents of a single housekeeping unit must decide who will be a member of the household. All group homes were lumped together as “residential care facilities” which required a permit to open and operate. An extensive process was enacted for the permit process, which included a hearing and a hearing officer to make findings that the residential care facility would be within the character of a neighborhood. Currently operating group homes were required to receive a permit or a reasonable accommodation permit.
By 2009, 25 group homes had closed, while only four had received a permit and five a reasonable accommodation permit. No new group homes had been opened in Newport Beach since 2008. Revenues for all group homes had significantly declined.
The Court found that the City enacted the Ordinance primarily to close down currently operating group homes and to prohibit new ones from opening.
Fair Housing Act
The Fair Housing Act prohibits discrimination based upon disability in the sale or rental of housing. A person recovering from alcohol and/or drug addiction is considered disabled and protected under the Fair Housing Act.
Under the Fair Housing Act, zoning procedures can be considered discriminatory if they contribute to making housing unavailable to disabled persons.
Americans with Disabilities Act
The Americans with Disabilities Act provides “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 42 U.S.C. § 12132. Similar to the Fair Housing Act, the Americans with Disabilities Act prohibits government entities from discriminating against disabled persons through zoning.
Disparate Treatment
Both the Fair Housing Act and Americans with Disabilities Act are interpreted similarly to determine whether there is a disparate impact against disabled persons. The Ninth Circuit relied heavily on the intent of Newport Beach’s Ordinance in finding there was disparate impact against recovering alcoholics and drug abusers when it enacted its Ordinance. Many of the issues brought by local residents related to the group home residents’ prior use of drugs or alcohol and that they did not want those type of persons in their neighborhood. There were comments made that the Ordinance would effectively prohibit all group homes in the City. In addition, short term rentals, which have many of the same issues arising from them, were not treated similarly to group homes.
The Ninth Circuit also relied on the odd methods that were used by Newport Beach to enact the Ordinance. An ad hoc committee had met privately with counsel in order to the draft the Ordinance, which had never been done before. Second, City conducted a survey among people mostly opposed to group homes in order to justify regulating group homes differently from short term rentals. Third, the City had already created a task force to attempt to shut down group homes prior to enacting the Ordinance.
Damages
The Court also found that the Plaintiff group home operators and residents who lived in group homes suffered an adverse impact caused by Newport Beach’s Ordinance. The group homes spent substantial time, effort, and resources to apply for special use permits as required by the Ordinance. Second, approximately a third of all group homes closed in Newport Beach after the Ordinance was enacted.
Conclusion
This decision is important as it is one of the first cases in the Ninth Circuit to address sober living homes. As sober living homes gain popularity throughout Southern California, many cities and other local government entities have attempted to regulate them or prohibit them. This decision will have an important effect on these regulations.
A copy of the decision can be found here.
Attorney Anthony Marinaccio has represented a number of group home operators, including sober living homes that are unlicensed. California and Federal law provides an array of regulations and laws that address sober living homes. Please contact Anthony at (818) 839-5220 to set up a free initial consultation if you are facing issues in regards to a group home or sober living home.
