California voters approve measure aimed at restricting AIDS Healthcare Foundation spending

California voters have approved Proposition 34, a measure from an apartment trade group that aimed to restrict spending by the AIDS Healthcare Foundation, which has bankrolled several rent control initiatives and criticized the measure as unconstitutional revenge. As written, Proposition 34 applies to healthcare providers that have spent more than $100 million in any 10-year period on things besides direct patient care and have run multifamily housing with more than 500 “high-severity health and safety violations.” If a healthcare provider meets that standard, they would be required to spend 98% of their revenues from a federal prescription drug program on direct patient care. According to California’s nonpartisan Legislative Analyst’s Office, the program is supposed to enable providers such as AHF to serve more low-income patients, but the law “does not directly restrict how providers spend their revenue from federal drug discounts.” Proposition 34’s restrictions could hamstring AHF’s ability to fund additional rent control measures or operate apartments it owns in and around Skid Row, which have been beset with vermin infestations, elevator failures and other problems, according to a Times investigation published last fall. The Yes on 34 campaign declared victory last week, before the race was called by the Associated Press, saying voters took action to close a “loophole” that allowed healthcare organizations to spend money meant for patients on “luxury condos, CEO bonuses, naming rights on sports stadiums, and political campaigns.”