Statewide ballot initiative Proposition 34 is a political oddity: It purports to regulate health care, but it’s really about rent control.
Bankrolled by the California Apartment Association, Proposition 34 proposes restrictions on how “certain health care entities” spend their money but takes aim at one in particular: the AIDS Healthcare Foundation — the chief financial backer of Proposition 33, which would let cities expand rent control. The measure is one of 10 statewide propositions on the Nov. 5 ballot.
Yes on 34 committee, primarily funded by the apartment association, said in a statement that unscrupulous health care companies have been using a “legal loophole” to divert money received via a federal prescription-drug program to “pet projects that have done nothing to benefit patients,” including “spending millions on lobbying and dumping millions more into political campaigns.”
Critics call it “revenge of the landlords.” The AIDS Healthcare Foundation said Proposition 34 was “designed specifically to kneecap” the nonprofit foundation “in retaliation for sponsoring Proposition 33.” Landlords funding the measure, the foundation says, want to quash its advocacy for rent control — it backed two similar ballot measures that state voters rejected in 2018 and 2020 — and other tenant protections.
The Los Angeles-based foundation operates HIV care and prescription services, along with affordable-housing apartments across the U.S., including 10 in Los Angeles but none in the Bay Area, intended to address homelessness. The prescription drug program drives most of the foundation’s $2.5 billion annual revenue, allowing it and other groups serving underprivileged people to generate revenue via insurance claims for medicine they obtain at a discount from drug makers.
Shaun Bowles, a political science professor at UC Riverside who studies ballot measures, described Proposition 33 as an extreme example of the “obfuscation and misdirection that are part of politics.”
“It’s an odd way of carrying out a political fight,” Bowles said. “It’s highly misleading. I don’t remember seeing anything like this before.”
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Under the proposition, health care providers that spent more than $100 million in any 10-year period on anything other than direct patient care and which also operate multifamily housing “reported to have at least 500 high-severity health and safety violations” would have to spend 98% of revenues from the federal discount prescription-drug program on direct patient care. Those highly specific requirements point toward the AIDS foundation.
California’s transparency laws on political donations allow voters to follow the money to see who backs ballot measures and understand the intentions behind them.
The California Apartment Association has put $29.4 million toward Proposition 34’s passage. And the California Association of Realtors donated $250,000 to support Prop 34, state data show.
The AIDS Healthcare Foundation has put about $1.2 million toward fighting Proposition 34.
The foundation has spent $37 million supporting rent-control Proposition 33, while the California Apartment Association has contributed $34.5 million in opposition.
In a survey of California residents in late August and early September by the Public Policy Institute of California, 53% of respondents said they would vote yes on Prop 34, and 43% said they would vote no.
But Bowles said the confusing nature of a measure that addresses both prescription drugs and multi-family housing could lead some voters to reject it.
“There’s a bit of a tendency,” Bowles said, “for people to say, ‘No, I don’t know what I’m voting for.’ “