Once upon a time – a couple of decades ago – one of California’s sweetest deals was the creation of a supposedly nonprofit corporation to operate “group homes” for at-risk youths.
Someone could create such a corporation, get it licensed as a group home operator, then buy one or more houses and lease them to the corporation.
It was a license to print money.
A three-bedroom home could house six kids, each drawing several thousand dollars a month in payments. The operator could claim a salary, cover food, staff and other overhead and siphon off the remaining income as lease payments.
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Some would even set up “classrooms” in garages to get extra payments from local school districts.
The state was paying group homes several times what it would pay foster parents, who could provide real home environments for troubled or neglected youngsters.
It might not have been a racket in a legalistic sense, but it certainly was in moral terms, and everyone knew it. And whenever the state licensing agency would try to crack down on those who treated young unfortunates as cash cows, they would pull political strings.
Eventually, the scandalous group home situation generated a political backlash. In 2003, the Legislature cracked down on what were called “self-dealing transactions,” such as operators leasing facilities to nonprofit corporations they controlled.
Since then, there has been a concerted effort to reduce the number of kids in group homes and use them sparingly as temporary shelters, rather than semi-permanent residences. Nevertheless, serious issues remain.
One is cost. According to a state Senate analysis, placing a youngster in a group home costs an average of $8,300 a month, about twice the cost of a state prison inmate or a student in a private college – and many times more than a foster care stipend.
Another is that group home residents are very likely to fail in school and wind up in the criminal justice system.
A third is the apparent overuse of psychotropic drugs to control kids. The National Center on Youth Law says the use of such drugs in California group homes has “risen from near-zero in 1999 to more than 50 percent in 2011.”
There are about 60,000 California children in what’s termed “out-of-home care” overseen by child welfare and probation officials, and judicious use of group homes plays a role in that care. But a better goal, which state and local agencies are now pursuing, is to have as many as possible living with their immediate or extended families or in well-managed foster homes.
Dealing with troubled children should be a humanitarian mission, not a lucrative industry.
Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.