Housing and the AIDS Healthcare Foundation (full series)
Pharmaceuticals and Propositions | Housing the Homeless?
The Ideology of Homelessness | Thoughts and Questions
Key Points
- The vast majority of the AIDS Healthcare Foundation’s nearly $2.3 billion in annual revenue comes from pharmacy operations that are subsidized through the federal 340B drug pricing program.
- In 2024, voters in California narrowly passed Proposition 34, which requires 340B program participants to spend at least 98 percent of their associated revenue on direct patient care.
- The AIDS Healthcare Foundation has become deeply (and controversially) involved in housing, including operating low-income multifamily housing units for the homeless and spending over $100 million to bankroll three separate ballot measures to expand rent control in California.
- The AIDS Healthcare Foundation is one of a number of advocacy groups that view homelessness through a left-of-center ideological lens, which may limit the effectiveness of their efforts to address the issue.
In 2024 voters in California narrowly approved a complex ballot initiative dealing with an obscure federal pharmaceutical program. As written, the measure appears applicable to only a single charity—the AIDS Healthcare Foundation—whose forays into low-income housing and (especially) associated public policy have become highly controversial within the state. The passage of what was known as Proposition 34 provides an opportunity to examine how federal funding and programs intersect with left-wing activism, against the broader backdrop of the country’s ongoing homelessness crisis.
Pharmaceuticals and Propositions
California is well known for its struggles with homelessness. The U.S. Department of Housing and Urban Development (HUD) estimated that 187,084 people were homeless in 2024 in the state, two-thirds of whom were considered unsheltered. That same year, the department awarded $10 million to the Los Angeles–based AIDS Healthcare Foundation, alongside a partner group located in Massachusetts. The money was to be sub-awarded over a two-year period to “approximately 30 eligible tenant advocacy organizations…with the goal of building the capacity of tenants as active partners in the preservation of affordable rental housing for low-income residents.” These funds could be used for “training tenant organizers and technical assistance to tenant organizations, as well as legal services to establish and operate tenant organizations.”
The AIDS Healthcare Foundation is the self-described “largest provider of HIV/AIDS medical care in the world,” serving more than two million patients globally. But as the federal funding indicates, it has recently become deeply involved in low-income housing and homelessness—two issues that it sees as inextricably linked. It may seem like a strange undertaking for a health care provider, but the AIDS Healthcare Foundation is no ordinary provider. For one, it is enormous, with total revenues in 2023 of nearly $2.3 billion. Over 92 percent of this came from its extensive pharmacy operations. The foundation ended the year with just under $1.15 billion in net assets.
These massive pharmaceutical revenues are largely a function of the foundation’s extensive participation in the federal 340B Drug Pricing Program, which allows certain health care providers to purchase discounted medications directly from manufacturers, charge insurance the full price when distributing the drugs to patients, and keep the difference to help fund their operations. A 2017 New York Times profile of the foundation and its “ex-Trotskyite” president Michael Weinstein described the 340B program as “a roundabout way of subsidizing health care for the poor,” but also observed that it “subsidizes [the AIDS Healthcare Foundation’s] expansion and advocacy as well as the group’s political activities.” Reportedly, only about 70 percent of the foundation’s 340B program revenues are spent on direct care for patients.
Those “political activities” have conspicuously centered on housing, to such a degree that Politico recently characterized Weinstein as having “cast himself as an anti-MAGA progressive savior who can singlehandedly reshape the rental economy through the ballot box”—a reference to the AIDS Healthcare Foundation’s repeated efforts to expand rent control in California via state ballot measures. Weinstein believes that rent should be regulated like public utilities. According to Ballotpedia, the foundation spent over $113 million total (in both cash and in-kind contributions) to bankroll three separate rent-control ballot measures in 2018, 2020, and 2024—none of which came close to passing. Indeed, each was rejected by a progressively larger margin of voters.
That is a tremendous amount of charitable resources to expend on an unpopular left-wing public policy initiative that even voters in one of the bluest states in the country clearly oppose. What’s more, the great irony—at least for a group that believes that homelessness is directly linked to a lack of affordable housing—is that rent control has consistently been found to depress housing supply. This supply/demand imbalance is in turn one of the chief drivers of high housing costs. In 2017, the AIDS Healthcare Foundation virtually singlehandedly backed proposed Measure S, an unsuccessful city ballot initiative that would have restricted the construction of new high-density housing developments in Los Angeles, and it has filed lawsuits to block large residential buildings near its Hollywood headquarters.
Much of this could soon change dramatically. In a development that Politico termed Weinstein’s “nightmare scenario,” California voters narrowly passed Proposition 34 last year, which requires—under very specific circumstances—340B Drug Pricing Program participants to spend at least 98 percent of their associated revenue on direct patient care. Failure to do so could risk the loss of state tax-exempt status and certain health care licenses. The proposition’s conditions were such that the AIDS Healthcare Foundation is seemingly the only organization to which it will apply. If Proposition 34 survives legal challenges, it could ultimately prove to be “equivalent to [the AIDS Healthcare Foundation’s] death warrant.”
In the next installment, the AIDS Healthcare Foundation argues that homelessness is largely the product of greedy developers and corporate landlords.
