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Ohio Recovery Housing Operators Beware: House Bill 58 Seeks to Make Major Changes

Client Alert
February 26, 2025

On February 18th, Ohio State Representatives Justin Pizzulli (R-District 90)  and Dontavius Jarrells (D-District 1) introduced House Bill (HB) 58, which proposes sweeping changes to Ohio’s current recovery housing landscape. HB 58 gives local Alcohol, Drug Addiction, and Mental Health (ADAMH) Boards (and their designees) authority to inspect recovery residences and investigate complaints levied against recovery residences (by residents, staff, or the public).

HB 58 also requires the Ohio Department of Mental Health and Addiction Services (OMHAS) to begin to issue Certificates of Need (CONs) to recovery homes seeking to engage in a “reviewable activity”.

Reviewable activities include but are not limited to:

    • Establishment, development, or construction of a new building that will be operated as a recovery housing residence;
    • Replacement of an existing building that is operated as a recovery housing residence or purchase or any other form of acquisition of an existing building that will be operated as a recovery housing residence;
    • Renovation of or addition to an existing building that is operated as a recovery housing residence that involves a capital expenditure of $500,000 or more, not including expenditures for equipment, staffing, or operational costs;
    • An increase in bed capacity at a recovery housing residence; and
    • Relocation of recovery housing residence beds from one physical building or site to another.

Under HB 58, as proposed, OMHAS will administer the CON program for recovery housing residences, approving or denying reviewable activities and issuing CONs if the reviewable activity is approved.

OMHAS will consider the following criteria (among others) when deciding whether to issue a CON to an operator:

    • The impact of the reviewable activity on the cost and quality of recovery housing in the relevant service area, including the historical and projected utilization of the services to which the application pertains and the effect of the reviewable activity on utilization of other providers of similar services;
    • The quality of the services to be provided as a result of the activity, as evidenced by the historical performance of the persons that will be involved in providing the services;
    • The impact of the reviewable activity on the availability and accessibility of the type of services proposed in the application to the population of the relevant service area;
    • The activity's short-term and long-term financial feasibility and cost-effectiveness; and
    • The impact of the activity on all other providers of similar services in the relevant service area, including the impact on their utilization, market share, and financial status.

To obtain a CON, operators will be required to submit an application and pay a non-refundable application fee to OMHAS. Further, when OMHAS grants a CON, it will monitor the activities of the recovery residence for up to five years after implementation of the reviewable activity for which the certificate was granted to ensure compliance.

Last, HB 58 requires establishment of a recovery housing residence fund funded by CON application fees and penalties assessed against operators. Alcohol, Drug Addiction, and Mental Health Boards will use the fund to pay for conducting inspections and investigations of recovery residences.

If you have questions about HB 58 or Ohio’s current regulations surrounding recovery homes, please contact BMD Member Daphne Kackloudis at dlkackloudis@bmdllc.com

or BMD Attorney Jordan Burdick at jaburdick@bmdllc.com.

Ohio Recovery HousingOhio Department of Mental Health and Addiction ServicesDaphne KackloudisJordan BurdickHealth Law
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