How to start a sober living home

What a sober living home is, and isn't

Federal law gives a useful working definition. The Eliminating Kickbacks in Recovery Act (EKRA) defines a recovery home as "a shared living environment that is, or purports to be, free from alcohol and illicit drug use and centered on peer support and connection to services that promote sustained recovery from substance use disorders." Texas uses nearly the same words in its recovery housing law. Three things follow from it:

• It's housing, not treatment. Residents get treatment, if they need it, from providers they choose. If you want to provide counseling, detox or medical care on site, that's a treatment program, which most states license separately.
• Peer support is the core. Residents hold each other accountable through house meetings, shared chores and recovery activities. SAMHSA's 2023 Best Practices for Recovery Housing builds on this "social model": recovery-centered, resident-driven, connected to the community.
• The rules and the money must be clean. EKRA already covers you the day you open (more below).

1. Choose the model

Decide who the house is for, how many beds, and how it will be run, before you look at a single house. The National Alliance for Recovery Residences (NARR) describes four levels of support, and certifiers across the country use them (NARR levels of support):

Level	Who runs it	What residents get	Good fit when
Level I: peer-run	The residents, democratically; officers are elected	Peer accountability, house meetings, drug-free living	Residents are further along and self-directed. Oxford House is the best-known model.
Level II: monitored	A house manager or senior resident, often paid or with reduced rent	Peer support plus house rules that someone enforces, drug testing, house meetings	You're an owner-operator opening a first house and want someone on site enforcing the rules.
Level III: supervised	Paid staff, with an organizational structure	More structure: life-skills work, case management, scheduled activities	Residents are early in recovery or stepping down from residential care.
Level IV: service provider	Credentialed staff, usually tied to a licensed provider	Clinical services in the home or an affiliated program	You are, or work with, a licensed treatment provider. State licensing rules usually apply.

Also decide now:

• Who you'll serve: men, women, a specific population (veterans, people leaving incarceration, parents). Single-sex houses are common, but ask your attorney how your state's fair housing law treats them, and whether children can live in the house.
• Medications for addiction treatment. Write now that residents taking prescribed medications for opioid or alcohol use disorder are welcome. It's what SAMHSA's best practices and NARR's guidance expect, it's often a condition of public funding, and turning people away for it can be disability discrimination (see house rules: MAT).
• Bed count. More beds spread the fixed costs, but your city's occupancy rules and the bedrooms you can find set the ceiling.

2. Check your state's and city's rules first

Recovery housing law is a patchwork. Before you commit money, find out which of these describes your state:

How the state treats sober homes	Example
No license; voluntary certification, required for state money	Texas: certification under Health and Safety Code chapter 469 is voluntary to operate, but since September 1, 2025 a house that isn't accredited can't receive state money. See our TROHN certification guide.
License required if you take public money or public referrals	Pennsylvania: houses that receive federal or state funding, or referrals from publicly funded facilities, must be licensed by the Department of Drug and Alcohol Programs (PA DDAP).
Treatment providers may refer only to certified homes	Florida: licensed service providers generally can't refer patients to, or accept them from, a recovery residence unless it's certified and run by a certified administrator (Fla. Stat. 397.4873).

Rules change, so check your state's current law and its behavioral health agency's page rather than relying on an old list. Then the city:

• Ask the city in writing what applies to a home for unrelated adults in recovery at the address you're considering: zoning for group living, occupancy limits, parking, registration or spacing rules, and fire code for your bed count. Get the answer before you sign.
• Homeowners' associations and deed restrictions can also limit use. Read them, and have your attorney read the lease.

3. Fair housing: your protection and your duty

• Residents are generally protected. The federal Fair Housing Act protects people with disabilities, and courts have held that people in recovery who aren't currently using illegal drugs qualify (United States v. Southern Management Corp.). The Act's definition excludes "current, illegal use of or addiction to a controlled substance" (42 U.S.C. 3602(h)), and it doesn't protect someone whose tenancy would be a direct threat to others.
• That shapes city rules. In their 2016 joint statement, HUD and the Justice Department said local rules that treat groups of unrelated people with disabilities less favorably than similar groups without disabilities violate the Act, and that cities must consider requests for reasonable accommodation (HUD and DOJ joint statement). The same statement also leaves cities room to apply neutral health and safety rules, so it isn't a blank check.
• It binds you too. Screen every applicant the same way using written criteria, answer reasonable accommodation requests (log them), and don't make rules that single out a protected group.
• If the city pushes back, call your attorney before you argue. These disputes turn on the local code and the facts. A request for reasonable accommodation, made properly, is often the first step.

4. Find the house

Once the model and the rules are clear, you know what to look for:

Check	Why it matters
Bedrooms that meet fire and occupancy rules for your bed count, each with a window or second exit	Occupancy sets your revenue; exits are a certification and safety basic.
Enough bathrooms and kitchen space for everyone, with room for a house meeting	Crowding is where conflict starts. Common space is part of a home-like setting in the NARR standards.
Near transit, jobs and meetings	Residents need to get to work, treatment and support meetings without a car.
Parking that won't crowd the street	The most common neighbor complaint.
The owner's written OK for sober-living use, if you lease	Without it, the owner can end the lease when they find out. Have your attorney read the lease.
An insurance quote before you sign	Some carriers won't write recovery housing; know the cost first (see insurance).

Then make it ready: working smoke alarms in every bedroom and hallway, carbon monoxide alarms if there's gas, an extinguisher on each floor and in the kitchen, clear exits, a posted evacuation plan, locking storage for each resident, a lockbox for medications, and naloxone where everyone can reach it.

5. Budget and rent

Most new homes fail on money, not mission. Build the budget before you sign anything.

• Opening costs: deposit or down payment, beds and furniture, alarms and extinguishers, locking storage, kitchen and cleaning supplies, insurance, business formation, attorney review of your documents, software, certification fees, and the house manager's pay before the first rent comes in.
• Monthly costs: rent or mortgage, utilities and internet, insurance, house manager, drug-test supplies, household supplies, repairs, software, and a reserve.
• Break-even: divide monthly costs by the rent per bed to get the beds you must fill. Then plan for empty beds, because a house is rarely full every week.

Our planning model's example shows why this matters: an 8-bed leased house costing about $5,400 a month, at $175 a week per bed and 85% full, collects about $4,744 and loses about $650 a month. The same costs with 10 beds make about $530. These are example numbers, not market rates; our sober living startup cost guide lists every line and has a calculator for your own.

• Write the rent policy: weekly or monthly fees, what's included, deposits, late fees within your state's limits, refunds and move-out balances. Give a receipt for every payment.
• Never hold a resident's ID, medication or belongings to force payment, and never waive or discount rent in exchange for a resident attending a particular treatment program.

6. The house manager

In a Level II home, the house manager makes or breaks the house (our house manager guide has a full job description and training checklist). They welcome new residents, apply the rules the same way for everyone, collect drug tests, lead the weekly house meeting, keep the house log, respond to emergencies and are the neighbors' contact.

• Hire for judgment: calm, fair and firm. If they're in recovery, set a minimum length of sustained recovery in the job description.
• Train before day one: CPR, first aid and naloxone, the house rules and relapse policy, de-escalation, testing procedure, privacy and fair housing.
• Set clear boundaries: no romantic or financial relationships with residents, no lending or borrowing, and never anything of value for referring a resident to or from a program, lab or other home.
• Pay it right. If the manager lives in and gets reduced rent as part of pay, have your CPA or attorney set it up so it meets minimum wage and overtime law. Run background checks as your policy requires.

7. Policies and paperwork

A home with good intentions and no written policies is hard to run fairly and hard to certify. You need:

• House rules and a resident agreement. Sobriety, testing, curfew, chores, guests, meetings, medications, safety, fees and what happens when a rule is broken. Our guide to sober living house rules and resident agreements walks through each with an example outline.
• A drug testing policy and a relapse and safe-discharge policy, written so a return to use leads to help and no one is put out without a safe place to go.
• Intake screening: who the house can safely serve (for example, medically stable and not needing detox), the same questions for everyone, and when you refer someone to treatment instead.
• An overdose plan: naloxone in reach, everyone trained, the steps posted (call 911, give naloxone, support breathing, stay until help arrives).
• Records and privacy: each resident's agreement, intake, test results, incidents, payments and move-out in a locked file or secure software, shared only with the resident's written permission.
• A grievance process residents know about, and a good-neighbor policy: parking, noise, smoking areas, trash, visitors, and a name and number neighbors can call.

8. Insurance

• Property or renter's coverage and general liability at a minimum. Ask for a policy written for recovery residences: standard landlord and homeowner policies may exclude them, and a claim on the wrong policy can be denied.
• Professional liability if staff provide any services beyond housing.
• Workers' compensation and employment practices coverage once you have employees; check your state's rules.
• Commercial auto if anyone drives residents in a house or personal vehicle.
• Check what your lease, lender and certifier require, and keep the certificates on file.

9. Certification: find your state's NARR affiliate

Most homes that certify do it through their state's NARR affiliate, which checks the house against the NARR Standard (version 3.0): 31 standards organized in four domains, administrative operations, physical environment, recovery support and good neighbor, tailored to each level (NARR Standard 3.0). Peer-run homes may instead be chartered by Oxford House.

1. Find the affiliate. Go to narronline.org and open its list or map of state affiliates. The U.S. Department of Labor reported 30 operating affiliates as of January 2023, with more in development (DOL). If your state has none yet, NARR says it can help a group develop one; ask NARR and your state's behavioral health agency what certification options exist in the meantime.
2. Read your affiliate's standards and process. Most review your documents, interview the operator and inspect every property; fees, renewal cycles and timelines vary.
3. Check whether certification is required for anything you need: state funding, referrals from treatment providers or courts, or local registration.
4. Run the house the way the standards describe, with records to prove it, then apply.

In Texas, the affiliate is the Texas Recovery Oriented Housing Network. Our TROHN certification guide walks through it step by step.

10. Funding

• Most homes start on the owner's capital or a business loan and pay their way on resident fees. Lenders will want the budget and break-even you built in step 5; the house model and budget are the first thing we build in the Recovery Residence Launch.
• Public money usually comes with standards. In Texas, a house must be accredited under chapter 469 to receive state money; in Pennsylvania, publicly funded referrals and funding require a state license. Expect grant programs to require certification, written policies and, often, access to medications for addiction treatment.
• Grants and contracts run through your state's behavioral health agency, local governments and foundations. Ask your state agency and your NARR affiliate what's open.
• Never take money from a treatment program, lab or marketer that's tied to residents. "Sponsorships," "scholarships" or free rent paid by a program for the residents it sends you are exactly what EKRA prohibits.

11. Referrals and marketing, legally

This is where recovery homes get into the most serious trouble.

• EKRA applies to recovery homes. 18 U.S.C. 220 makes it a federal crime to pay or receive anything of value for referrals to a recovery home, clinical treatment facility or laboratory, for any payer, including private insurance. Each violation can bring up to $200,000 in fines and 10 years in prison.
• In practice: no payments, gifts or free rent for referrals to or from treatment programs; no discounted rent tied to attending a particular program; no per-resident payments to marketers or "body brokers"; and nothing from a lab for sending it your drug tests.
• State laws add more. Texas, for example, bans offering or accepting anything of value for securing patients for a licensed provider (Occupations Code chapter 102), and Florida restricts referrals between providers and uncertified homes.
• Residents choose their own treatment. Market the house on what it is: list it on Google and recovery housing directories, including your NARR affiliate's, and build relationships with courts, programs and community groups on how residents do. Run any marketing deal past your attorney.

How long it takes

On our Texas roadmap, a house can open in about 11 weeks, with certification following once it's running. Other states follow the same steps, with their own licensing or certification in place of TROHN:

Step	Typical timing
Kickoff and your dated roadmap	Week 1
House rules and drug-testing policy written	Weeks 2–3
Business formed with the Texas Secretary of State (you or your attorney file)	Week 4
House leased or bought, with the owner's written OK	Weeks 4–9
House furnished and fire-safe	Weeks 9–11
TROHN certification application	Months 3–5
The house opens: first resident moves in	Week 11

From the kickoff, on the earliest path through our 46-step Texas roadmap. Agencies and insurance plans set their own pace, so treat these as typical, not promised.

If you'd like help with all of it, our Recovery Residence Launch runs this roadmap with you for a flat fee, from the house model and budget to the certification application.

Not sure yet? Book a free 30-minute call and we'll talk through your house, your state and what it really takes.

Questions

Do I need a license to open a sober living home?

It depends on the state. Many states don't license sober homes at all; some require a license or certification only if you take public money or public referrals (Pennsylvania); some limit which homes treatment providers can refer to (Florida); and Texas makes certification voluntary but requires it for state money. Your city may also have registration or zoning rules. Check both before you sign a lease.

How much does it cost to start a sober living home?

It depends on the house, the market and the bed count, so build your own budget: the deposit or down payment, furniture and beds, safety equipment, insurance, attorney review, software, certification fees, and several months of operating costs before the house fills. Then work out the number of filled beds you need to break even.

Is a sober living home profitable?

It can cover its costs and pay the owner when occupancy is steady, fees are collected, and expenses are controlled, but nobody can promise that. Empty beds are the biggest risk. Never try to fill them by paying for referrals; that's a federal crime under EKRA.

Can I accept residents who take Suboxone or methadone?

You should. SAMHSA's best practices and NARR's guidance expect recovery homes to support medications for addiction treatment, public funders often require it, and refusing people because they take prescribed medication can be disability discrimination. Store medications in locked boxes and test so prescribed medications are read correctly.

Can a treatment program own a sober living home?

Some do, but keep the two businesses separate and talk to a health-care attorney first. The home can't require residents to attend the program, can't discount rent for attending it, and neither side can pay the other for referrals.

Can I require residents to attend my preferred IOP?

No. You can require residents to be engaged in recovery (meetings, work, school, treatment of their choice), but residents choose their own treatment provider. Steering them to one program, especially one you have a financial tie to, invites EKRA and state patient-brokering problems.

Sources

• National Alliance for Recovery Residences, Levels of support and NARR Standard 3.0; NARR guide on medication-assisted recovery for state agencies
• SAMHSA, Best Practices for Recovery Housing (PEP23-10-00-002, 2023)
• U.S. Department of Justice and HUD, Joint statement on state and local land use laws and practices and the Fair Housing Act (November 10, 2016)
• United States v. Southern Management Corp., 955 F.2d 914 (4th Cir. 1992); Fair Housing Act definition of handicap, 42 U.S.C. 3602(h)
• 18 U.S.C. 220 (EKRA); Dorsey & Whitney, The Eliminating Kickbacks in Recovery Act of 2018
• Texas Legislature, HB 299 (2023), enrolled text, adding Health and Safety Code chapter 469; Occupations Code chapter 102
• Pennsylvania Department of Drug and Alcohol Programs, Apply to become a licensed recovery house
• Florida Statutes, 397.4873, Referrals to or from recovery residences
• U.S. Department of Labor, Community-based recovery support resources (NARR affiliates)

Cima Consulting isn't a law firm or an accounting firm. This guide is general information; confirm the current rules with your state agency, your city and your attorney.