The dull thud of a hammer reverberates somewhere in the house, a sound quite familiar to Steve Jordan. On a steep hill above San Clemente, in this ramshackle house Jordan is renovating, each thud brings thousands of dollars in profits a little closer.
The thuds also bring Jordan a little closer to another tussle with the neighbors. For Jordan doesn't merely restore run-down houses; he leases them, at far higher rates than he could get from most renters, as group homes for recovering alcoholics, drug users and women with eating disorders such as bulimia.
What's more, he wants to build a chain of group homes across Southern California, a profit-making operation that would offer franchises across the nation and eventually sell stock to the public.
But right now, Jordan has a problem to solve. While he dreams, some of the neighbors are having nightmares after discovering that the house next door is home to 10 or so recovering alcoholics or drug addicts. Jordan never tells neighbors beforehand about the homes, and San Clemente homeowners have gone to city officials to see if they can force Jordan out.
Group homes and halfway houses ease recovering alcoholics back into normal lives, usually after they've been treated at a hospital or clinic. Traditionally, the homes are small, local, often money-losing operations. For that reason, experts say, there aren't nearly enough of them.
By making the homes a paying proposition, Jordan said, he can open enough of them to fill the void--and make a tidy profit, too.
"We're a for-profit company," he said, "and we're very proud of that."
At 45, in his third career, Jordan is talking franchises. Getting the hospitals and the health maintenance organizations interested in buying those franchises. Going public.
Altogether, his company--Property Recycling Co. of El Toro--owns 10 such homes in Orange County in partnership with other investors. He will open five more in January.
"There are 18 million people out there with drinking problems," Jordan said. "That's a big market."
And it's not just alcoholics. Jordan dreams of group homes for AIDS patients and others with terminal diseases, for stroke victims and patients with head injuries who are facing long recoveries, and, of course, for people kicking the drug habit.
That sort of talk makes some experts "a little queasy," said Ernest Noble, a former director of the National Institute on Alcohol Abuse and Alcoholism, who is concerned about the idea of group homes becoming big business.
A hospital or clinic with a group-home franchise might be tempted to run the alcoholic back through its hospitalization program--at great expense--if the alcoholic falls off the wagon while in the group home, says Noble, who is now director of the Alcoholism Research Center at UCLA.
"You have the potential for a revolving door, where if the alcoholic falls on his face in the group home, you put him back in the hospital for more treatment," Noble said.
"I get a little nervous when people want to make a business out of this."
What Jordan is selling, experts generally agree, is a relatively efficient, cost-effective way of combatting alcoholism.
Here is a testimonial from someone who says he should know: Jordan himself, an alcoholic who swore off booze 12 years ago, when he was vice president of a scrap metal recycling company. Jordan describes himself as blacking out for days at a time from binges, only to wake up and find himself in another city.
"I'm not a doctor, I'm not a psychologist. I'm an ex-drunk," he said.
"But I know you have to take these people out of the environment in which they drank and give them a structured, supporting environment when they come out of detox. Otherwise, three or four weeks later, some of them are going to be drinking again."
Jordan started in business as a contractor in Colorado, and he uses a practiced eye in looking at as many as 400 houses to pick one suitable for a profitable renovation.
The house in San Clemente is an example: With a panoramic view of the ocean and three bedrooms, the house cost him $150,000. Only 20 years old, its floors were warped and cracked by shifts in the foundation. Jordan will spend another $35,000 having his own construction crew renovate the house. When finished, the house could be appraised for up to $250,000, Jordan estimates.
That's approximately the worth of the neighboring houses clinging to the side of the hill in this pleasant, upper-middle-class subdivision. And Jordan owns two more of them: the house across the street, a home for women with eating disorders and alcohol problems; and the one next door, a home for men recovering from alcoholism, where the garage has been fixed up as a meeting room for all three houses.
The houses are sold to another Jordan corporation at a profit. They are then operated as group homes or leased to others, such as James Nugent of Laguna Beach's Residential Support Group Institute, which runs five of the houses.