This AIDS nonprofit lost a political battle over housing and development. Now it's fighting a new way

The AIDS Healthcare Foundation has spent roughly $8 million to purchase the Madison Hotel, a single-room-occupancy building on Seventh Street that it plans to spruce up and rent out, giving priority to people with HIV and other chronic illnesses.

Oct. 6, 2017 5 AM PT

When the AIDS Healthcare Foundation campaigned unsuccessfully this spring for a ballot measure to crack down on “mega projects,” affordable housing developers argued the proposal would hurt poor renters and thwart sorely needed construction.

Now the huge nonprofit is getting into affordable housing itself, saying it can provide it quicker and cheaper than such groups.

“The current model does not work,” said its top executive, Michael Weinstein. “It takes too much time. It costs too much money. And in a lot of cases, it excludes the people that need the most help.”

AHF is forming a new division called the Healthy Housing Foundation and has already purchased a skid row building in an effort to provide apartments for hundreds of poor tenants. It is also buying a Hollywood motel and says it plans to break ground on hundreds of new units next year in Florida.

“We’re in the market for more properties,” Weinstein added. “We don’t want to see them turned into techie apartments for $2,500 a month.”

We’re in the market for more properties. We don’t want to see them turned into techie apartments for $2,500 a month.

— Michael Weinstein, head of AIDS Healthcare Foundation, on the nonprofit’s plans for affordable housing

The new push brings the foundation, an outspoken critic of how real estate development has shaped Los Angeles, even farther into the simmering debate over how to ease its housing crisis. If it succeeds in providing affordable housing to Angelenos in need, it could gain new credibility in that debate, said Jaime Regalado, professor emeritus of politics at Cal State L.A.

“It’s obvious that they want to be a force to be reckoned with — and I think they already are,” Regalado said.

That troubles critics such as state Sen. Scott Wiener (D-San Francisco), who has repeatedly been at odds with the group during his political career. Wiener is an advocate for a pill that can prevent HIV infections, which Weinstein has viewed with skepticism, fearing that patients won’t take the medicine properly and then fail to use condoms.

“It’s just more empire building by Michael Weinstein,” Wiener said, arguing that it was hypocritical for the group to bill itself as an affordable housing provider when its ballot measure “would have shut down a lot of housing development in L.A.”

“Why can’t they focus on actually providing treatment to people living with HIV?” Wiener asked.

The nonprofit is a philanthropic powerhouse that operates a global network of clinics and pharmacies and plasters cities with provocative billboards for HIV and STD testing.

It has also become a polarizing player in local and state politics, bankrolling ballot measures on drug pricing, condoms in adult films, and Los Angeles real estate development. It poured millions of dollars into the campaign for Measure S, which would have imposed a moratorium lasting up to two years on L.A. building projects that require zone changes and other alterations in city rules.

Earlier this year, Weinstein argued that Measure S would help combat gentrification that displaces the poor, including people with HIV and AIDS. He also fired back at critics who said the measure was a NIMBY crusade that had little to do with its nonprofit mission, countering that housing was a pressing need for its patients.

Now the group says it is trying to fill that need: It has spent roughly $8 million to purchase the Madison Hotel, a single-room-occupancy building on Seventh Street that it plans to spruce up and rent out, giving priority to people with HIV and other chronic illnesses. The nonprofit says existing tenants will be able to stay, and it aims to keep monthly rents under $400.

“Part of our goal is to show that this is financially viable and sustainable in the long run,” Weinstein said.

Alice Callaghan, who heads a community center near the Madison, applauded the effort. “We’re losing so much housing every year,” said Callaghan, director of Las Familias del Pueblo. “We need to encourage another set of players to fix up places and rent them out as clean, safe housing for the very poor.”

The high cost of creating affordable housing has been a persistent concern for policymakers: New affordable units in California cost an average of $332,000, which limits the amount of housing that can be built, Gov. Jerry Brown noted in a budget summary this year. In an earlier study, state agencies found that costs were driven upward by a wide range of factors, including regulatory requirements for construction tied to public funds, local government requirements that spur changes in building design, and delays caused by community opposition.

“If they bring a fresh perspective, I welcome them,” said Alan Greenlee, executive director of the Southern California Assn. of Non-Profit Housing, which opposed Measure S. “If they hit on something that’s new and innovative, by all means we should rush to adopt that.”

However, “it’s not like our members haven’t been looking for ways to cut costs,” said Greenlee, whose group includes affordable housing providers. “I’m not saying it’s impossible — but it’s not easy either.”

Mark Vallianatos, another opponent of the ballot measure and an advocate for rules that make development easier, welcomed the new effort from the foundation.

“This is how you solve the problem,” said Vallianatos, director of the LAplus think tank. “Not by trying to stop new housing.”

The foundation, which has sued over planned developments in Hollywood, has continued to speak up on development issues after Measure S was heavily defeated this spring. The Coalition to Preserve L.A., whose director headed that campaign, is still being funded by the nonprofit and has been raising concerns about how L.A. is updating rules that govern development.

Its efforts have sometimes been at odds with groups that build affordable housing: AHF opposed a state bill requiring cities and counties to limit environmental, planning and other reviews for some developments, which was recently signed into law by Brown and touted as a way to ease housing construction.

Backers of SB 35, which was authored by Wiener, included the California Council for Affordable Housing and Mercy Housing California.

The bill was opposed, however, by a long list of cities and had also raised concerns among renter rights groups such as Tenants Together, which argued that it would fuel displacement in gentrifying areas. Weinstein contended that the state restrictions would “limit the ability of local communities to control their destiny.”

[email protected]

Twitter: @LATimesEmily