Recovery is work that Terrance Streeter knows.

At 56, he is clean. No more drinking, no more drugs. After graduating from an alcohol recovery program two years ago, he went looking for a home. In New York City, his $855 monthly disability check doesn't go far.

Despite the distance he traveled from addiction, Streeter in late 2012 found himself homeless and suicidal.

He checked himself into the psychiatric ward of a city hospital, where a social worker eventually found him somewhere she said was safe and drug-free: a residence run by a substance abuse treatment program called Narco Freedom.

When he walked through the door of that home, a rundown former hotel on Beach 116 St, in the Rockaway neighborhood of Queens, NY, Streeter was shocked.

Cockroaches skittered across the floor. The plumbing was bad, the bathroom moldy.

“Are you kidding me?” he remembers saying to himself. “This is recovery?”

Streeter had entered the largely unregulated system of group homes that has emerged in cities throughout the country, often catering to poor people struggling with substance abuse, homelessness, or returning from prison.

In New York City, where the demand for affordable housing is especially high, these houses have become a little discussed, but deeply ingrained, piece of the recovery and reentry landscape.

Unlike government-sanctioned halfway houses, these homes don't operate treatment programs on-site, but they do often require residents to attend outpatient therapy.

The New York City facilities, variously known as “three-quarter houses,” “sober homes” and “transitional housing” bring in millions of dollars each year in taxpayer funds for landlords and operators, largely through welfare, Medicaid and disability payments.

Yet no city or state agency licenses or oversees the homes, creating a system in which some houses institute rules that advocates say violates tenant laws and patient rights.

Housing and tenants' advocates estimate there are more than 300 of these buildings in New York alone. Most are located in the city's poorest neighborhoods, and many have been slapped with violations of city code.

Road to Recovery

From Los Angeles to Long Island, NY, “sober homes” have emerged as part of the road to recovery.

Well-run homes can be a positive step for those trying to turn their lives around, according to Dr. Leonard A. Jason, director of the Center for Community Research at DePaul University.

Jason says he has visited many homes that live up to their stated goals, helping residents develop a sense of responsibility and giving them the skills and confidence to pursue productive lives.

“If it's a really well-run sober living home, that house could be a place of real health,” says Jason, who recently put out a policy statement aimed at helping to develop research and best practices.

“It can be done right, but it can just as easily be done very wrong.”

And when it has gone wrong, authorities have raised doubts about the entire industry.

A spike of private sober homes in Los Angeles, where residents may pay $500 each month for a bed, has prompted the city to propose an ordinance to shut them down.

Long Island and suburban Boston have also had a slew of complaints and safety issues.

In Massachusetts, problems extended to relationships between the homes and medical providers. In 2007 and 2010, the Massachusetts Attorney General accused two medical labs of engaging in kickback schemes, receiving referrals from sober homes with which the labs had a financial relationship.

After more than $20 million in settlements and restitution, the state proposed legislation to stop the practice.

In New York City, people arrive at the homes from hospitals, social service agencies, prison, the street and by word of mouth.

Advocates claim that some of the estimated 300 houses are simply boarding houses, stuffed with bunks leased to poor individuals.

Others offer those with few options a hard-to-refuse tradeoff: a bed, in return for a commitment to attend a treatment program associated with the house. While the system serves women, most residents are men.

Some residents kick their habits and move on with their lives. Their beds are quickly filled.

Half a dozen people interviewed by The Crime Report said they attended treatment they did not need in order to have a place to sleep.

“It is very hard to get housing if you do not have a substance abuse problem,” said Debbie Boar, Deputy Director of Reentry Initiatives at Harlem Community Justice Center, which works with people returning from prison. “Besides the shelter system, if you don't say you have a drug problem, there's no housing.”

Falling Through the Cracks

Terrance Streeter had graduated from an addiction program in 2011, and stayed clean, but he knew that agreeing to go back to treatment meant a bed to sleep in.

“I ended up at Narco Freedom because I fell through the cracks,” said Streeter. “I didn't need treatment for drugs. I needed a home. I didn't want to be on the streets.”

In 2010, city homeless advocates successfully petitioned the city to stop referring homeless people to pay-by-the-bunk homes with a history of buildings complaints.

Advocates have also raised questions about the programs tied to sober homes.

It is not illegal for a certified substance abuse treatment provider to also operate uncertified housing, according to a spokesperson with the state Office of Alcohol and Substance Abuse Services (OASAS), which certifies drug programs.

But the agency has raised concerns about relationships between the two.

In a 2011 letter to the executive director of CIS Counseling Services, a now-closed substance abuse clinic that also ran sober homes, an OASAS administrator questioned whether rules at the homes constituted “coercion and undue influence.”

“Patients reported the practice of mandatory outpatient treatment as a requirement for admission into a sober home residence,” wrote Charles Monson, OASAS associate commissioner for the Division of Quality Assurance and Performance Improvement.

“This practice violates Patient Rights regulations,” the letter said, adding it “should be immediately ceased.”

CIS Counseling shuttered soon after, but others appear to use a similar model.

The Rockaway building, for example, is part of a network of houses associated with Narco Freedom, a non-profit founded in the 1970s, which is now one of the largest treatment programs in the city.

Property records and interviews with tenants and employees confirm that the organization operates at least twenty homes.

Interviews by The Crime Report with more than two dozen residents, treatment advocates and employees of Narco Freedom houses, as well as a review of hundreds of public records and agency documents, showed how real estate developers partnered with Narco Freedom to turn dilapidated buildings into a sober home network using a similar model as CIS Counseling.

(Narco Freedom did not respond The Crime Report's repeated requests for interviews.)

Rent of $215 a Month

It works like this: a landlord leases the building to an outpatient drug treatment program, which offers its clients a bed for the tenure of their treatment. The client typically pays rent of $215 a month through a welfare shelter subsidy from the city's Human Resources Administration (HRA).

In turn, the treatment programs, generally funded almost entirely by Medicaid, a public health care program for the poor, pay the landlords a monthly rent, generally much higher than what landlords would make by collecting $215 a month per tenant.

In New York, Medicaid generally pays about $70 for each group session that its beneficiaries attend, sometimes up to five times per week.

Residents said missed sessions must be made up on weekends, a mandate echoed in signs posted in one Narco Freedom house The Crime Report visited. Those who miss too many sessions, or who exhaust their treatment funding, are “discharged,” or evicted.

Ann Jacobs, director of the Prisoner Reentry Institute at John Jay College, has been studying the role that these houses play in New York City's post-incarceration system. The housing has become essential for those returning from prison and in need of a bed, Jacobs said.

But she questioned the strings attached, including whether building managers have the right to mandate drug treatment to specific providers.

“Where do they get the authority, or the ability to provide that kind of oversight?” she said, referring to the clinical training required to prescribe substance abuse treatment. “Who authorized or deputized them?”

While various agencies provide the taxpayer dollars that help the homes run, none appears to certify or oversee New York's growing number of sober homes.

OASAS certifies drug treatment programs, but despite the agency's concerns about the sober homes associated with CIS Counseling, OASAS Communication Director Jannette Rondo told The Crime Report that sober houses are out of the agency's purview.

“The scope of our legal authority is related to services provided in OASAS certified treatment programs which does not include housing,” she wrote in an email. “When those types of issues are raised we will make referrals to the appropriate state and local authorities.”

Rondo declined to name those authorities “as the matters are still likely the subject of ongoing investigations.”

HRA issues welfare shelter payments on behalf of residents, but a spokesperson said HRA “does not place people receiving cash assistance in apartments” nor does it certify or inspect the housing.

The New York State Department of Correction and Community Supervision, or DOCCS, officially has a five-year, $866,250 contract with Narco Freedom for 20 beds meant to help parolees transition back into the community.

This gives the agency some authority over those beds, yet they are only a fraction of those used by parolees. DOCCS records show that as of May 2013 more than 425 parolees lived at addresses identified by The Crime Report as Narco Freedom sober homes, sometimes dozens per address.

DOCCS said that while it refers parolees to treatment programs, and must approve any residence in which parolees live, it does not refer directly to housing, nor does it certify or oversee the housing.

“We're not in charge of finding residences,” said DOCCS spokesperson Thomas Mailey. He could not explain why so many parolees appear to end up at Narco Freedom houses.

The system has grown with few eyes on it, leaving neighborhoods with little say when houses come in, and residents within them little recourse if things go wrong.

Cast Adrift

When James Gregory was paroled from prison, he didn't have much money or a family to take him in.

As a condition of a 2009 drug conviction, his parole officer mandated him to a drug treatment program at Narco Freedom, which, he was told, could also offer him a bed.

On August 2, 2010, he went to Narco Freedom intake in the Bronx. There, he was assigned to “Freedom House III,” a five-story building nearby at E. 152nd Street.

Attending Narco Freedom drug treatment sessions was a house rule.

Like all parolees, Gregory had to have the residence signed off by his parole officer.

DOCCS is familiar with the building. In April 2012, DOCCS records showed 89 parolees lived at that address.

Though DOCCS asserts it does not mandate parolees to specific housing, “sober homes” have come to serve the parole process.

“They’re another set of eyes for us, just to make sure that someone’s reentry into the community is going the way it should,” said DOCCS spokesman Mailey.

When Gregory arrived at Freedom House III, “things were really bad,” he recalled during an interview in April 2012.

A sturdy man carefully dressed in a hat and a thick gold chain, he spoke matter-of-factly about the bedbugs in the house and how, several times during the winter of 2011, there was no heat or hot water, a memory confirmed by public records.

But he said he was most troubled watching his fellow residents tossed out if they missed group or exhausted their treatment funding.

“They were throwing people out left and right,” said Gregory. He described men whose belongings were stuffed in black plastic bags, then put out on the curb with their owners.

“This is what happens when they illegally put you out: you go backwards,” said Gregory. “You get depressed. You start using. When you start using, you commit crimes.”

A few times, he said, residents tried to protest, telling police they had a right to stay under city housing laws, which require landlords to get court orders before evicting tenants.

“But every time the police came, they'd be on the side of Narco Freedom,” he said. “Their excuse is that this is a program.”

Eventually it was Gregory's turn. On February 2, 2012, he came home to the news that it was time to leave. He took Narco Freedom to court.

In court filings, Narco Freedom stated it operates the homes “for temporary use by its program participants during their treatment period.”

Because Narco Freedom holds the lease, and is therefore the tenant, those who sleep in the bunks are not tenants but “licensees,” argued Narco Freedom's attorney.

When that treatment is done, he argued, Narco Freedom had the right to make them leave without formal evictions.

The court did not agree, ruling that Narco Freedom and Gregory had a landlord-tenant relationship.

Gregory returned to Freedom House III.

The case was a victory for others who live in this gray world, said his attorney, Matthew Main of MFY Legal Services, which has brought several suits on behalf of sober home residents, including those who once lived at homes run by CIS Counseling Services.

While Main said he believes three-quarter houses address a desperate need, he thinks the system often harms the very people it purports to help.

“This system is like a conveyor belt that grabs the most vulnerable people from our communities,” said Main. “It takes people who don't have anywhere else to turn, stuffs them into these dilapidated apartments, and has them stay there to attend a treatment program only for as long as it's necessary to recover.

“And then spits them out.”

Photo by Graham Kates

A Booming Business

Narco Freedom is the “#1 outpatient alcohol and substance abuse treatment program in the city,” according to its website. In 2012, OASAS records show the organization's outpatient and methadone clinics served about 7,770 unique patients.

Narco Freedom's revenue was $46.7 million in 2011, according to its most recent tax filings.

About 90 percent of the organization's revenue typically comes from Medicaid payments for outpatient substance abuse treatment and its methadone program. Filings show CEO Alan Brand earned a salary of $386,000 that year.

Despite a booming business, routine certification reports obtained from OASAS through a Freedom of Information request point to issues at the program.

One routine OASAS review, conducted in March 2012 at the Narco Freedom program at 250 Grand Concourse in the Bronx, found that patients were not responding to treatment or meeting their defined goals.

For example, in 19 of the 20 cases studied, patients had tested positive for illicit drugs twice within three months. Their treatment plans had not been changed to address the continued drug use.

Reviewers also found that Narco Freedom had submitted reports to OASAS with inaccurate admittance and discharge dates. Nevertheless, the program was recertified.

OASAS spokesperson Rondo said the program is “subject to ongoing monitoring.”

A review from one former resident of Narco Freedom's house in Rockaway was more blunt.

“They got low standards,” he said, asking not to be named for fear of retribution. “As long as residents go to group, Narco Freedom doesn't care what they do.”

“Guaranteed Rent”

Narco Freedom's sober housing has proven a successful model for another person as well: Jay Deutchman who, property records show, owns at least six buildings used as Narco Freedom houses, a relationship stretching back about 15 years.

He also owns at least one used as a home by the now-defunct CIS Counseling Services. (MFY Legal Services is currently engaged in litigation on behalf of former tenants at the home).

He maintains an office in that former sober home in Greenpoint, Brooklyn, where last February he puffed through cigarettes, while working both hands to answer calls.

In between, he explained how the city's tenant-friendly laws make leasing to an organization preferable to leasing rooms or apartments to individuals, who may not keep up their end of the rental agreement.

“When you have a not-for-profit there’s good money,” Deutchman said. “When you have a tenant who doesn’t care about anyone or anything, it’s not as good.”

He added that leasing to non-profits has “worked out in my buildings for years.”

Deutchman told concerned residents in Rockaway as much in April 2010, after closing his $2.7 million purchase of the Rockaway Park Hotel, where Terrance Streeter found himself two years later.

“We like guaranteed rentals and therefore we take people that have subsidies from the government,” he told the local paper, The Wave.

Though displeased about the perceived “halfway house” coming to the neighborhood, Danny Russiello, president of the local 100th Precinct Community Council, said the neighborhood had little recourse against a private landlord.

Locals soon learned Deutchman had leased the hotel to Narco Freedom. After repeated complaints to Narco Freedom about residents of the house loitering and bothering passersby, things improved.

“They did want to work with us,” said Russiello.

But he said cleaning things up shouldn't have taken so much on the part of Rockaway residents.

“The responsibility should be up to the people running the program,” he said.

A resident of the Greenpoint, Brooklyn building that was once a CIS Counseling Services sober home. A few tenants have taken the landlord to court in order to remain in the building, which this winter had more than 514 code violations. Photo by Hannah Rappleye.

Finding a Solution

At the Prisoner Reentry Institute, Ann Jacobs wrestles with the quandary these homes present.

“They’re bad and they need to be improved, but it would be a disaster if there was just an enforcement reaction and they were closed wholesale,” she said. Residents could end up at the doors of the shelters they sought to avoid, which are already stretched to meet the needs of nearly 50,000 homeless each day.

“The homeless system isn’t equipped to deal with thousands of more people,” Jacobs said.

Legislators in Suffolk County, NY, are working on a solution with a plan they say will regulate the system without forcing thousands of residents to the street.

The “Suffolk Healthy Sober Home Act” calls for OASAS and the Suffolk County Group Home Oversight Board to monitor and certify all sober homes. If passed, the homes would undergo regular building inspections.

Those operating without certification would be fined $10,000. Operators would also be required to “demonstrate good moral character,” according to a press release by State Sen. Lee Zeldin, the bill's sponsor.

But no such oversight was in place last October when Terrance Streeter arrived in Queens where, three days later, Hurricane Sandy hit.

“On October 29th, the windows blew in,” Streeter remembered. The house went dark. Pipes burst. Men waded through sewage-laden water.

Streeter said residents were told that Narco Freedom would evacuate them, but no one arrived. Instead, on the first Tuesday after the storm, police vans showed up to cart the residents away.

For months, Streeter moved through emergency shelters to temporary hotel rooms for the displaced, unsure of what he would do when the largess of the Federal Emergency Management System ran thin.

In February, Streeter received good news. As a hurricane victim, he qualified for shelter.

At the Frederick Douglass Houses, a public housing complex in Manhattan, Streeter found what he had searched for since getting sober.

It is clean. It is quiet. For one-third of his monthly disability check, it is his.

It took a deluge, but he has a place to call home.

“I have my own apartment,” he said. “It's a studio apartment, but it's okay for now.”

Graham Kates is deputy managing editor of The Crime Report. Lisa Riordan Seville, a former deputy editor at The Crime Report, is an independent reporter. They welcome comments from readers.

See also: Life (and Death) in a ‘Three-Quarter Home’

